Destroy a business relationship in five sentences or less

Today I sent out an email to all my business contacts announcing my new book, Essentials of Corporate Fraud. The email included a little bit about the book (what it’s about, who it’s for), a link to purchase it from, and a request for bloggers to mention it on their sites if they were so inclined.

I admit being a bit giddy. But how often does one have their first book published??? Well, I think it’s exactly once or never, depending on your circumstances. So my “once” is pretty special to me.

And one by one, I got lovely notes back from clients, associates, and friends.

And then there was “the” response. This response came from someone I respected greatly, until today. I had spent several thousand dollars in the past on his seminars and had purchased several of his books. I recommended him to many other professionals, and encouraged them to buy his books. I was recently eagerly looking at his seminar list, mulling over which seminar I’d be ready for next. (Another several thousand dollars for one of those.)

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Why Business Owners Should NEVER Hire Family Members

Under no circumstances should a business ever hire family members of current employees. I don’t care how good the current employee is or how good the potential employee seems. No “wife of the CFO to help with the books.” No “son of a sales guy to help with office work.” No “brother of our VP to work in sales.”

No matter what position either family member is in, it’s not a good idea to hire more than one because the chance of collusion for the purpose of committing fraud skyrockets. Is there a study that says so? Not that I’ve seen. I’m just basing my statement on my practical experience and the number of cases I’ve seen with family members committing fraud.

Take this Milwaukee area fraud at Parkview Title Service. Mom (Bobbi Moths) hired her daughter (Jamie Wilson). The daughter had serious financial troubles, and I’m sure the business owner had no idea.

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Wikileaks case may soon be over

Just a couple of weeks ago, was yanked off the internet by its web host Dynadot in response to a lawsuit brought by bank Julius Baer. The bank first went after Wikileaks directly, after someone posted confidential bank documents that allegedly prove the bank participates in money laundering and tax evasion. The bank wanted those documents removed from the site, but Wikileaks refused to comply.

The bank went on to sue Dynadot, trying to force them to remove the site from the web. Sure enough, Dynadot rolled over and sold out its customer, agreeing to not only shut down the site, but also lock the domain name so it couldn’t be transferred elsewhere and give up the IP addresses of people using/accessing the site.

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The Sith Lord Rears His Ugly Head Again

The Sith Lord lives on, according to (NASDAQ:OSTK) CEO Patrick Byrne. I am thankful that we have Wacky Patty to look out for the interests of investors. He gave a speech March 3rd at the University of Utah, and the school newspaper wrote about his comments.

And who would have guessed that Byrne was going on and on about conspiracy theories? Again, he’s talking about naked short selling. And of course, naked short selling is the reason Overstock’s financial performance stinks and the stock is such a bad investment.

As usual, there is a conspiracy between journalists and hedge funds to screw investors. And now organized crime is involved, and Byrne laughably is quoted as saying:

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Usana Health Sciences Loses Big in Court

Consequently, the evidence now indicates only that Defendants engaged in the lawful trading of securities. Because USANA did not meet its burden, the court strikes the second claim for relief under California’s anti-SLAPP statute.

A ruling yesterday in the Usana Health Sciences (NASDAQ:USNA) v. Barry Minkow & Fraud Discovery Institute case in United States Court for the District of Utah is a big blow to Usana.

The judge’s order essentially grants FDI’s anti-SLAPP motion and dismisses all but one of Usana’s claims under state law (the bulk of what Usana was claiming in their complaint).

But here’s the best part: Usana cannot pursue money damages under federal securities law (Rule 10B-5). They could seek “injunctive relief”… but there’s really nothing for Usana to ask for an injunction on anymore. Barry has no current positions in Usana stock, so there’s nothing to claim there. And the First Amendment protects free speech, so Usana really can’t shut Barry up… our laws allow him to criticize Usana if he wants. Theoretically, Usana could still pursue a claim of unlawful stock manipulation, but they really have no case in that regard. (As a friend of mine says: NOPE-SORRY!)

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Wisconsin homeowners in danger of losing more rights

Do you think the taxing authorities already have too much control over your wallet? Do you agree that they dip into your money whenever they please? Well if you’re a Wisconsin homeowner, there’s a good chance it could be worse.

Bill 2007 AB 580 is sitting on Governor Jim Doyle’s desk, and if he signs it, we’re screwed.

Real Debate Wisconsin explains the laws as they currently stand:

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Why Audits Fail to Find Fraud

I am reading Cynthia Cooper’s book, Extraordinary Circumstances, which documents her experiences uncovering the massive fraud at WorldCom. I want to finish reading the book so I can write a proper review here and elsewhere. But I admit I’m having a hard time finishing the book due to all the other demands on my time…

Nonetheless, I wanted to share this passage from the book because it illustrates so perfectly the main reason why audits fail to find fraud: Those committing fraud know how to hide it from the auditors. Because of that active concealment, there is little chance of the auditors finding the fraud.

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Wikileaks is back

Wikileaks wasn’t really ever gone, but a very unusual case in which a bank sued the web host of Wikileaks resulted in the U.S. version of the site being pulled offline for a couple of weeks. The controversial site’s domain was The site’s purpose is to allow whistleblowers to anonymously post incriminating information and documents that show evidence of wrongdoing.

Someone posted some very incriminating information about Bank Julius Baer on Wikileaks. The documents allegedly prove that the bank helps very rich customers hide assets, launder money, and evade taxes. The bank got upset because the documents were deemed confidential, and they tried to get the site owner to take down the documents.

After being unsucessful, Julius Baer took the unusual step of suing the web host, Dynadot. And instead of fighting the case, Dynadot decided instead to agree to completely shut down the site, make it so the site owners couldn’t transfer the domain name anywhere else, and turn over all data collected by the web host, including IP addresses of users. How outrageous!

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