Tracy Coenen gives a brief overview of some of the most common financial statement fraud schemes.
The Roca Labs saga continues… with more unsuccessful attempts to silence anyone who talks or writes about the company’s scammy product and despicable methods of squelching criticism. The company is upset that consumers, Marc Randazza, other attorneys, and media outlets are mocking the company. But indeed, as I will demonstrate here, Roca Labs must be mocked.
Roca Labs has sued Marc Randazza for defamation. Marc is opposing counsel in the cases involving PissedConsumer.com and Consumer Opinion Corp. The complaint, filed by attorney Johnny G. Degirolamo, takes issue with Randazza for allegedly:
“…intentionally and maliciously publishing many false and defamatory statements in his pleadings, with the intent to share them to his contacts in the media, and indeed by directly speaking to the media about Roca with the intent to have them publish false, misleading and defamatory articles about Roca, and by harassing and making derogatory statements about Roca via his personal social media sites including his Twitter account.”
Sam Antar is a legend in the fraud industry. He was the CFO of Crazy Eddie, an electronics retailer which pulled off (for a time!) a massive fraud in the 1980’s. He was interviewed by CNNMoney while attending the New Jersey securities fraud summit as a keynote speaker.
Antar said during the interview:
“We are in the golden era of white-collar crime. My biggest regret is I should’ve been a criminal today rather than 20 years ago.”
I would like to direct your attention away from the trainwreck that is the Roca Labs attempt to silence consumers, critics, and journalists, and turn it back toward the case Roca Labs filed against Consumer Opinion Corp. (who operates PissedConsumer.com). Marc Randazza (the attorney who has also been sued by Roca Labs with a complaint drafted by attorney Johnny G. Degirolamo – - read more about John DeGirolamo here) has filed a motion for summary judgment in the Florida case.
A question often comes up relative to the lifestyle analysis in divorce cases: Isn’t is just data entry that anyone could do? Why do I need a forensic accounting expert?
As I explain below, the lifestyle analysis is NOT just a data entry exercise. A level of quality control is necessary in order to ensure that all transactions are included in the analysis and no transactions are duplicated. In larger cases, there may be enormous volumes of data to be managed, and the client needs an expert who can effectively handle the data. Also, the numbers must be categorized and analyzed. Sometimes estimates or judgment calls need to be made. That is the work of an expert.
Roca Labs continues to respond to those covering its very questionable legal threats with more legal threats. Friday night I received a letter from Paul Berger (so-called “independent general counsel”) for Roca Labs, threatening me with a lawsuit if I didn’t retract my article on the scam the company is running with its Gastric Bypass No Surgery product. (He didn’t mention my articles about the lawsuits against Roca Labs customers or the Alfonso Ribeiro endorsement that wasn’t.)
The Roca Labs letter claims I defamed the company with six separate statements in my article. The response was easy. Four of the statements were protected statements of opinion (such as my opinion that the company is running a scam), one of the statements was simply a quote from a pleading in the lawsuit with pissedconsumer.com, and one statement was factually correct. (The factually correct statement was that Roca Labs is lying when it says it is an alternative to tummy tuck or liposuction. Tummy tucks and liposuction remove things from the body. The Roca Labs product doesn’t remove anything. Unless of course the company contends that the product mysteriously removes skin and fat from the body????)
Today I got a call from Everest University, asking if my company needed any interns. I let them know that I was aware of the Everest College fraud, that we are fraud investigators, and that no, we would not do any business with them. What am I talking about?
The State of Wisconsin has sued Corinthian Colleges Inc. for defrauding students in an effort to enroll them in their for-profit schools. For-profit colleges and universities tend to prey on young adults who are unsophisticated financially. They talk the students into taking out loans to pay outrageous tuition (high tuition, poor quality education). The students are happy because they have a chance to get a degree without paying much out of pocket now, not realizing that the crappy degree will never pay for itself (they will never earn enough at a job in their field to pay off the loans).
The complaint in this case provides interesting information on how Everest College ran its scam:
For more than 17 years, I have been conducting fraud investigations, and I have learned a lot about fraudsters, their methods, and the companies they work for.
Hotlines cut fraud losses in half.
Anonymous reporting mechanisms like fraud hotlines decrease the cost of internal fraud. Employees are excellent watchdogs, and are more likely to report wrongdoing if they have a confidential way to report the information they possess. Research shows that companies with hotlines discover fraud schemes sooner and therefore lose less to internal fraud.
Sarbanes-Oxley has mandated anonymous reporting mechanisms like hotlines for public companies. Private companies should follow suit, since the hotlines have been proven to be effective. However, companies should not get a false sense of security from a hotline. There are many other fraud-prevention measures that companies should also implement.
Employees are very receptive to anti-fraud training.
As I’ve mentioned, employees are typically very good watchdogs. They don’t like to see someone else on the take while they are putting in honest work. If they know what to look for, employees are likely to report misdeeds to management.
When Tim Grittani was sitting in his parents basement starting to trade with his puny $1,500 trading account do you think he had any idea would be a millionaire trader just three years later? I doubt it. Before you have that kind of success you usually don’t believe it’s really possible. Or you believe it might be possible for other people but not for yourself.
But he did have one other thing. And that made all the difference. His mentor Timothy Sykes shares what is in in this video. Click here to watch it now.
Sykes says there was one quality present in both his students who became millionaire traders. And it was a quality he himself had when he started trading with just $12,415 to his name.
He says that ultimately this quality is what separates the winners from losers in trading.
I’d love to hear what you think: Click here to watch this quick video.
Income tax audits are intimidating whether you are being audited personally or as a business owner.There is a right way and a wrong way to handle an audit by a state or federal taxing authority. It is easy to dig a hole for yourself, but awfully hard to get out of that hole.
Whether you attempt to handle an audit on your own, or opt to involve a professional who is experienced in these matters, there are some things you should know as you embark on your journey. I don’t ever suggest that a taxpayer submit to an audit alone. It is very helpful to have an experienced professional along for the ride. Not only can the accountant or attorney help you complete records requests, she or he can also act as a buffer between the taxpayer and the IRS.
The process of an audit is often one big negotiation. It is a give and take between both sides. Ultimately, both sides want the case closed, and the faster we can get to that point, the better. (Preferably with the least amount of pain for everyone involved.)