Press Release: Fraud Investigator Develops Public Awareness Website Regarding Mary Kay Cosmetics

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Milwaukee, WI November 20 2006 . Tracy L. Coenen, CPA, MBA, CFE, a nationally-recognized fraud examiner and expert witness, has developed a website to educate and inform the public about the Mary Kay Cosmetics business opportunity. Pink Truth (www.pinktruth.com) has quickly become a valued resource to hundreds of thousands of women around the world.

Coenen, a highly credentialed and experienced fraud investigator, is utilizing her expertise on fraud to reach out to current and former independent representatives of Mary Kay. Widely-available internet access has made information and opinions shared by these representatives available to women considering becoming independent beauty consultants.

As a former member of Mary Kay.s independent sales force, Coenen has first-hand experience with the abuses that occur in multi-level marketing companies like Mary Kay. Typical abuses in MLM companies can include incomplete information given during the recruiting process, unsubstantiated earnings claims, and pushing large quantities of inventory on new recruits.

.The site is aimed at putting information in the hands of those who need it most: those who are considering signing up and those who are struggling with their Mary Kay businesses,. said Coenen. .This is a rapidly growing public awareness campaign to give women access to potentially negative information about the Mary Kay business opportunity. Women deserve to know the truth about their chances of success, the typical earnings of a beauty consultant, and the realities related to recruiting new members..

As the visibility of the site expands, Mary Kay.s corporate executives have taken note, even advising high-level members of the independent sales force to discourage members of their downlines from visiting the website. Coenen has received hundreds of emails thanking her for the positive impact the website has had, and she intends to continue providing information about the Mary Kay opportunity so that women around the world can make well-informed decisions.

About Pink Truth:

The site was launched in July of 2006 and moved to its current internet address in October. Pink Truth is owned and maintained by Tracy Coenen, a forensic accountant with Sequence Inc. in Milwaukee and Chicago. Coenen performs financial investigations related to corporate fraud and embezzlement, financial statement fraud, contract disputes, and insurance fraud.

For more information about Pink Truth, please visit www.pinktruth.com.

MySpace is being sued by Universal

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A lawsuit has been filed against News Corp., the owner of MySpace, by Universal Music Group. Universal, the world’s largest recorded music company,claims that MySpace is infringing on copyright by trafficking in “user-stolen” content such as music, videos, and written materials.

Universal is known for aggressively defending its copyrights. The company has been negotiating with MySpace to get MySpace to pay a licensing fee for the use of Universal’s content. Other companies pursued by Universal include YouTube Inc., Grouper Networks Inc. (part of Sony Corp.) and Bolt Inc.

Universal contentds that it adds millions of dollars of value for the owners of MySpace, and should be compensated accordingly.

Top Ten Ways to Prevent Employee Theft

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1. Education . If employees are aware of fraud and how it happens, they will be your best on-the-job sleuths.

2. Surprise Audits . When employees are aware that there will be random checks of their areas, they are more likely to be honest. They also will not feel singled out when it is .their turn. for an audit.

3. Hotlines . A mechanism for anonymous reporting of fraud encourages employees to look out for the best interests of the company, without fear of reprisal.

4. Assessment of Internal Controls . Companies need to take an honest look at what fraud prevention controls they have in place. They also need to be honest about whether or not those procedures and policies are being followed and whether or not they really work.

5. Background Checks . Having the right employees is the first step toward fraud prevention. Avoid employees with criminal backgrounds or dishonest job applications.

6. Open Door Policy . Make employees feel that it is okay to discuss concerns with management. And then when they do discuss their concerns, act accordingly. Ask lots of questions, but be supportive.

7. Perception of Fairness . Pay your employees fairly and try not to show favoritism. When employees feel cheated or devalued, they are more likely to justify stealing in their minds.

8. Employee Empowerment . Give employees the authority and confidence to make decisions and take action. The more involved and empowered employees feel, the more likely they are to look out for the best interests of the business.

9. Continuous Improvement . Management should be constantly looking for ways to improve policies and procedures. Fraud prevention is an ongoing, dynamic process that requires continuous evaluation and improvement.

10. Employee Involvement . Your employees are the people who are most aware of areas vulnerable to fraud. Talk to them and ask for their help in securing the company.s assets. Fraud prevention applies to everyone, from the top down.

Another MLM Under Investigation

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The Texas Attorney General recently announced that it is investigating Mannatech, another multi-level marketing company scam That offers “nutritional supplements.” The company’s main products, Abrotose (formerly known as glyconutritional) is a sugar pill that the company’s representatives claim cure all sorts of illnesses, including cancer. (Someone even claimed it cured Down’s Syndrome!?!?!?!?) Continue reading

The Fall of America’s Meanest Law Firm

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CNNMoney.com has published a recent article from Fortune Magazine about the fall of Milberg Weiss, dubbed the meanest law firm in America.

It’s a long article, but here are the high points.

The law firm of Milberg Weiss, along with Melvin Weiss and Bill Lerach, singlehandedly transformed securities class action litigation. The firm held itself out as helping the little people, and has claimed that they’ve collected $45 billion for cheated investors. Continue reading

Losses and Changes at Merge Technologies

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Merge Technologies went from a $9.6 million profit in the third quarter of 2005, to a $10.8 million loss in the same period this year. The dramatic swing is related to a drop in sales from $35 million to $14 million for the quarter. Company executives say the revenue drop is because of one large contract in 2005.

The company is also recovering from the discovery of an accounting issue that forced Merge to restate its financial statements for 2202 through 2005. Merge reports that employee morale has been affected by the accounting problems, and that the company’s reputation with current and potential cusomers may have been damaged.

The net loss for the first nine months of 2006 totals $231.4 million, which includes a write-down of goodwill of $219.4 million. The prior year’s loss for the same period was far lower, at $5.4 million.

Audit Firms Suggesting Companies Be Required to Have Forensic Audits

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The six biggest accounting firms in the United States have suggested that companies should be forced to submit to forensic audits every three to five years. These types of engagements would be aimed at finding fraud.

The six firms include PricewaterhouseCoopers, Deloitte & Touche, Ernst & Young, KPMG, Grant Thornton and BDO Seidman. They say their proposal is aimed at starting discussions about what investors should expect from auditors when it comes to fraud. (Incidentally, traditional independent audits are not designed to detect fraud, and the users of financial statements are mistaken if they think the audits will detect fraud.)

One accounting educator remarked that audit firms should just change traditional audits to be “done properly” and detect fraud.

Computer Associates Ex-Executive Sentenced to Prison

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Sanjay Kumar, the former chief executive of Computer Associates International (now called CA Inc.) has been sentenced to 12 years in prison and fined $8 million for his guilty plea to charges of securities fraud and obstruction of justice.

Prosecutors say that Kumar created “35-day months” in order to book additional revenue after a quarter ended and the books should have been closed. He then engaged in a cover-up scheme meant to silence a witness to the accounting misdeeds. It is believed that the fraud cause the company to misstate revenue by $2.2 billion Continue reading