Ken Lay considered innocent after his death


A rule in U.S. law called “[tag]abatement ab initio[/tag]” means that [tag]Kenneth Lay[/tag] will have his [tag]conviction[/tag] on [tag]federal charges[/tag] related to the [tag]Enron[/tag] [tag]fraud[/tag] wiped out. A defendant who dies before having the opportunity to [tag]appeal[/tag] the conviction has everything related to the case extinguished, meaning that the record will show that Lay was never indicted or convicted.

The theory behind this law is that the appellate process is a key part of protecting the integrity of the criminal justice system. It is part of the due process afforded to defendants, and since Lay’s death rendered him incapable of participating fully in the [tag]due process[/tag], his conviction must be nullified.

This nullification will also impact the ability of the government to collect money from Lay’s estate. The government announced that it would try to seize $43.5 million in [tag]ill-gotten gains[/tag] from Lay. Now that Lay is dead, the process to collect that money will be affected. The government will ikely have to bring a [tag]civil lawsuit[/tag] against Lay’s estate. Unfortunately, a civil suit will probably require the government to re-prove all the facts already established in the criminal proceedings.

Disaster insurance: demand exceeds supply


According to the Wall Street Journal, the demand for [tag]disaster insurance[/tag] far exceeds the current available supply, and this is affecting our entire economy. Companies and individuals are quickly buying disaster insurance, and the insurance companies themselves are scrambling to buy coverage of their own on the policies they write (known as [tag]reinsurance[/tag]). Reinsurers have significantly raised their rates because of the volume of claims last year, and businesses and homeowners are feeling the effects. [tag]Hurricane Katrina[/tag] caused almost $40 billion in insured losses, and about half of that was covered by reinsurers.

Rates have risen so significantly that companies are opting to cancel projects which require disaster insurance versus paying the extremely high rates. It seems the only people benefitting from the high rates are investors in insurance companies.

Accounting + Criminology = Forensic Accounting


Tracy Coenen: Energetic force behind local firm Sequence Inc.

Accounting Magazine – Marquette University
By Dan Love

A typical workday for Tracy Coenen may start in the early morning hours, or perhaps at 5:00 in the evening, and she may be conducting business from her office in Milwaukee’s Third Ward, or at a second office in downtown Chicago, or at any number of client sites in either city.

Ms. Coenen has thrived on the flexibility of her schedule since she combined her independent and ambitious personality with her strong technical and instinctive knowledge of accounting and criminology to form Sequence Inc., a forensic accounting firm specializing in fraud investigation and litigation. Now, six years into her venture, Tracy is encouraged by her success and continues to be the sole driving force that has put Sequence Inc. in a remarkable position for growth while earning her tremendous respect among her colleagues. Continue reading

Splog Software


I ran across an interesting post about splog software. What’s splog software, you say? Basically, it’s software that creates spam blogs, or splogs.

The splogs are used to link to other sites, so that those other sites can increase their search engine rankings, get more traffic, and also get pay-per-click advertising revenue. The splogs often have gibberish content or use content stolen from other blogs. Continue reading

As seen on TV…


Tonight on Windfall on NBC, and I quote:

“I’m a P.I., not a [tag]forensic accountant[/tag].”

Oh, yeah!

Theft of Coca-Cola trade secrets


Three people were charged in federal court with [tag]theft of confidential information[/tag] from The [tag]Coca-Cola[/tag] Co., which they tried to sell to competitor [tag]PepsiCo[/tag] Inc. The group includes Coke employee Joya Williams, an executive administrative assistant. The other two charged in the case are Ibrahim Dimson and Edmund Dhaney.

On May 19, [tag]Pepsi[/tag] provided to [tag]Coke[/tag] a copy of letter mailed to Pepsi in an official Coca-Cola envelope. The letter was postmarked in the Bronx, and purported to be from “Dirk”, a supposed high level employee of Coke with detailed confidential information. Coke then contacted the [tag]FBI[/tag] and an [tag]investigation[/tag] began.

An FBI [tag]undercover[/tag] agent received from “Dirk” 14 pages of confidential documents from Coke. Representatives from Coke confirmed that the documents were authentic, and did indeed contain highly confidential information considered to be [tag]trade secrets[/tag]. “Dirk’s” fee for the documents was $10,000, but he also agreed to receive $75,000 in exchange for a sample of the confidential new product.

The FBI went even further, offering “Dirk” $1.5 million for other Coke trade secrets. “Dirk” was actually Ibrahim Dimson. Joya Williams was caught by video surveillance cameras putting confidential documents on a new product into a personal bag. She was also taped holding a container with liquid in it, and putting it in her bag. Coke officials verified that it was, in fact, the confidential new product.

The suspects have been arrested on federal charges of wire fraud and unlawfully stealing and selling trade secrets.

Fake bloggers?


I ran across an interesting post yesterday from fellow blogger James Durbin. He’s identified a blog that he thinks is suspect, and suggests that this fake blog may be nothing more than an attempt by the owner of to create fake buzz about his site. I’ve taken a look at the blog in question, and I think James may be onto something. Read his post, peek at the blog in question, and come to your own opinion.

Update on Merge Technologies


In a conference call Wednesday, the chairman of the board and interim principal executive officer of [tag]Merge[/tag] Technologies said that the company is making every effort to meet [tag]regulatory requirements[/tag] related to the company’s [tag]financial statements[/tag].

An independent [tag]investigation[/tag] into the finances of Merge was recently complete by Alvarez & Marsal, LLC of New York. The company is working with the consultants to help expedite the [tag]restatement[/tag] of financial statements for the years 2002 through 2005.

Merge has delayed [tag]regulatory filings[/tag] in order to [tag]restate earnings[/tag] and correct errors in the financial statements. The company does not know if Nasdaq will grant an extension beyond the July 7 deadline for filing relevant financial reports. If the deadline is not extended and the company is delisted, the common stock will trade as pink sheets beginning July 10.

Ken Lay, founder of Enron, has died


[tag]Ken Lay[/tag], the founder and former CEO of [tag]Enron[/tag], was recently convicted of federal felonies related to one of the largest frauds in U.S. History.kenlay.jpg

He died today in Colorado, at the age of 64. Lay was admitted to Aspen Valley Hopsital with a massive coronary at 1:41 am and was pronounced dead at 3:11am.

Lay was awaiting sentencing on the [tag]conspiracy[/tag] and [tag]fraud[/tag] charges he was convicted of in May.

The Houston Chronicle gives this history of Lay and Enron:

Lay and Jeff Skilling, the only two chief executives Enron had before it filed for bankruptcy in December 2001, were convicted May 25 of conspiracy and fraud. Prosecutors said they duped investors about Enron’s balance sheet and the very nature of its business. Continue reading

The Impact of Social Software on Brands


Blogger Gautam Ghosh posted a brief discussion on how social software could affect companies and their brands. I think this is an interesting topic, and I wish Gautam had discussed his views on it a bit more.

Many of us have seen websites dedicated to employee complaints. Some employees and ex-employees post legitimate gripes with the companies, while others appear to merely be trying to stir up trouble or give a company a bad reputation.

At some point, I think companies need to take action to stop untrue and misleading information from being disseminated. However, I don’t know what that point is. With the internet providing a certain cloak of anonymity, I wonder what companies can effectively do to protect their good names and brands. Continue reading