Sharon’s Wig Salon Warning

Are you considering doing business with Sharon’s Wig Salon in Brookfield, Wisconsin? Think again. Here is a brain tumor patient’s horrific experience with owner Sharon Heyden. It is bad enough that Sharon and her employee treated Alison Ziebell (a mother who is undergoing radiation treatments and is in need of a wig) poorly from a customer service standpoint. But when Alison decided to leave the store (since they didn’t want to actually help her find a wig she liked), she says that Sharon stated:

Good luck, I hope ALL your hair falls out.

Why would anyone say that to a young woman shopping for a wig…. who quite possibly might be on the verge of her hair falling out due to her medical condition????

Good luck, Sharon Heyden of Sharon’s Wig Salon. I hope your business fails when the world finds out what a horrible human being you are.

Mandatory Auditor Rotation is Dead

Almost two years ago, I wrote about a PCAOB proposal that would require companies to rotate auditors every 5 to 10 years.  The theory was that forcing companies to change auditors regularly would make audits better, because fresh eyes on the books every few years would mean a more skeptical audit.

My position was that it doesn’t matter how long an auditor worked on the same engagement. Instead, the problem is audits themselves. Audits have never been designed to detect fraud. Thus, audits rarely find fraud. I wrote previously:

Fooling the Auditors in Seven Easy Steps

mncpa-footnoteMinnesota Society of CPAs Footnote Magazine
February/March 2014

Even with all of the publicity surrounding the issue of financial fraud in the last decade, most auditors, investors and other professionals still do not “get it” when it comes to detecting fraud. Traditional financial statement audits were never designed to detect fraud. The audit is simply a process by which auditors check the company’s math and application of accounting rules.

Fraud is rarely detected by financial statement audits because they are not designed to do so. Occasionally, fraud is detected by auditors, but they could increase their chances of finding fraud if they changed their audit procedures.

The Truth About the Airport Body Scanners

A former Transportation Security Administration (TSA) Agent confesses… that what you experience in airports is nothing but security theater. The TSA agent reveals how the body scanners don’t work:

Our instructor [on the Rapiscan Systems full body scanner] was a balding middle-aged man who shrugged his shoulders after everything he said, as though in apology. At the conclusion of our crash course, one of the officers in our class asked him to tell us, off the record, what he really thought about the machines.

Are All Multi-Level Marketing Companies Pyramid Schemes?

Recently Robert FitzPatrick of Pyramid Scheme Alert sent out a newsletter that included a discussion of the issue of whether all multi-level marketing companies are pyramid schemes. MLMs are frequently accused of being pyramid schemes, as we see has been the case with Mary Kay Cosmetics, BurnLounge, Herbalife, Medifast, Fortune Hi Tech Marketing, and Usana Health Sciences.

It is common for participants in multilevel marketing schemes to ask whether one MLM or another is also a pyramid scheme. Consumers are hoping that they have found the one legitimate or good multi-level marketing opportunity. The following information comes from Robert FitzPatrick’s newsletter article on the topic:

Tim Grittani, Fellow Marquette Alumnus, Makes $1 Million Trading Penny Stocks

Tim Grittani, a student in the Timothy Sykes Millionaire Trading Challenge, hit the $1 million profit mark a few weeks ago.

Grittani graduated with a finance degree from Marquette University, my alma mater (and the university at which I am now teaching Fraud Examination to graduate students), and started trading penny stocks with $1,500.  In less than three years, Grittani turned his $1,500 into more than $1 million.

See Sykes and Grittani appearing on Fox & Friends today:

Crystal Cox Has a History of Seeking Payoffs in Exchange For Retraction

Extortionist Crystal Cox got a favorable ruling yesterday in her appeal of a $2.5 million judgment against her by Obsidian Finance.  The appeals court’s ruling can be found here, and the bottom line is that the case has been kicked back for a new trial.

This does not mean, however, that what Crystal Cox does is acceptable. It just means that she gets a new shot at arguing her case in front of a jury. What does she do that is objectionable?

In this case involving Kevin Padrick and Obsidian Finance, Padrick was appointed as the trustee for the Summit Accommodators bankruptcy. It was then that Cox began her defamation of Padrick and Obsidian. When asked to remove the false materials from her websites, Cox told Padrick and Obsidian that if they paid her $2,500 per month, she would provide them with reputation management services.  Normal people recognize that as extortion. In the ruling published yesterday, the court said:

Analyzing Historical Earnings for Support Calculations

This article was originally printed in the ABA Section of Family Law eNewsletter, December 2013.

Spousal support and child support are most heavily influenced by the earnings of the parties. Historical earnings will play a big part in these calculations, so it is important to properly analyze them.

Income can easily be determined in cases in which the party or parties only receive traditional wages. The rate of pay is constant, and it is easy to confirm historical earnings. The forensic accountant must be careful to account for things like raises, overtime earnings, or periods during which a party does not work. However, as a general rule, past earnings can be easily analyzed and future earnings are fairly predictable.

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CPA's Handbook of Fraud and Commercial Crime Prevention
Essentials of Corporate Fraud
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