Lawyer Convicted of Tax Evasion and Bankruptcy Fraud Wants to Teach a Morality Class Instead of Going to Prison

No, it’s not a joke.

Stephen Yagman, a high-profile lawyer who was involved in numerous cases against police thinks that he shouldn’t go to prison for his convictions on tax evasion and bankruptcy fraud. He says that would be too harsh a punishment, and he also says he will be in physical danger in prison because of all the work he did examining claims of excessive force by police for the Christopher Commission.

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Forcing Auditors to Tell the Secrets of Their Clients?

As a general rule, communications between an auditor and client are private. The information given to an auditor can generally only be disclosed with the permission of the client, or in situations involving SEC filings.

But the protection of communications between auditors and clients isn’t anywhere near that of the attorney-client privilege. And this is causing some interesting things to happen.

Take for example, the lawsuit filed by Shaw Group against AES Coporation for almost $100 million in unpaid fees. AES was granted access to Shaw’s auditing records by the court.

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What’s your fraud score?

A research report published by the Final Four accounting firms details how to create a “fraud score” for public companies which can help predict which companies may be engaging in accounting manipulations. Using the model outlined in “Predicting Material Accounting Manipulations,” a company that has a fraud score above 1.00 has a “red flag.” The … Read more What’s your fraud score?

Former CEO found liable

Earlier this month, a jury found Brian Adley, former chairman, CEO, and controlling shareholder of defunct Chancellor Corporation liable for creating false accounting documents. Chancellor was a transportation equipment leasing company in Boston. The jury found that from 1998 through 2000, Adley used false accounting documents inflate the company’s assets and revenues. The company also … Read more Former CEO found liable

Should You Blog?

I am often asked by other professionals if they should start a blog, and the answer is almost always, “it depends.” And it really does. I think the most important variable is whether or not the person is committed to blogging for the long-term. And a close second is whether or not the person is committed to blogging regularly.

Long-Term
When I say long-term, I really mean it. It can take a year or more to see real results from blogging, so it’s important to be committed for the long haul. If you’re not, then it’s just a waste of time. Why spend your time blogging regularly for three months and then quit?

I do know of a handful of bloggers who saw results within the first few months of blogging, but that is very rare. People need time to find your blog. It’s not just “if you blog it they will come.” It really takes time for people to realize you’re there and to become regular readers.

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Putting auditor billing rates into perspective

I am still settling in from my office move and upacking some odds and ends. Today I came across a billing rate card from Arthur Andersen. The rates are from 9/1/96 to 8/31/97 for the Milwaukee office, and they are interesting. Notice this is over ten years ago. These are the “Standard Rates” which were … Read more Putting auditor billing rates into perspective

SEC fines have gone down

The fines levied by the Securities and Exchange commission have fallen to their lowest level since 2002. Bloomberg reports that “fewer billion-dollar accounting-fraud cases” and “new policies for fining companies” are to blame. For the year ended September 30, the SEC issued $1.6 billion in fines, compared to $3 billion in each of the two … Read more SEC fines have gone down

Utah Attorney General Mark Shurtleff Endorses Company Committing Fraud

Did I ever mention that the Attorney General of Utah, Mark Shurtleff publicly endorsed Usana Health Sciences (NASDAQ:USNA) and said the company operates in a legal fashion? Oh yeah, that’s right… I did. Well then, let’s review.

Usana executives have been caught making numerous misrepresentations about the “business opportunity,” company executives, and other company representatives. The company has recently been exposed for violating the laws of China – where company employees at the company’s Hong Kong office teach people exactly how to violate the Chinese laws against multi-level marketing.

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Utah Attorney General Mark Shurtleff: No Apology for Sam Antar!

Yesterday I wrote a letter to Mark Shurtleff, Utah’s Attorney General, urging him to issue a public apology to Sam Antar. Last week, Mr. Shurtleff wrote a letter to Overstock.com (which Overstock and Patrick Byrne later attached to a press release). That letter was defamatory and embarrassing for Sam, and Shurtleff should not have written it.

While Mr. Attorney General did offer me the courtesy of a response to my letter, he says he will not apologize for the original letter he wrote.

Another individual wrote to Mr. Shurtleff, and he responded directly to her email and copied me in:

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Herbalife’s Top 5 Misrepresentations

Herbalife’s (NYSE:HLF) CEO Michael Johnson and CFO Richard Goudis contradict one another’s figures.

Fraud Discovery Institute (FDI) issues the following statement about its review of Herbalife (NYSE:HLF) presentations by CEO Michael Johnson and CFO Richard Goudis.

First, on November 7, 2007, Herbalife CEO Michael Johnson defended allegations that over 90 percent of Herbalife distributors fail by stating: “We believe that 58 percent are discount buyers, that 22 percent are small retailers and customers, and that 20 percent are potentially future supervisors. Let me repeat that – 1.3 million distributors based on average order sizes, we believe that 58 percent are discount buyers, 22 percent are small retailers and 20 percent are potentially future supervisors.” (Quote from Seeking Alpha transcript)

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