MckMama Bankruptcy Update: Trustee Files Motion Objecting to Exempt Property

Whether or not you are a reader of MckMama (or mommy blogs in general), this post has good information on bankruptcy fraud.  Last week we looked at the bankruptcy filing of Jennifer Howe Sauls McKinney and Israel McKinney, and discussed the many red flags of fraud that have been detected. Jennifer / MckMama has made a very public spectacle of her life, her finances, and her many money-making scams on her blog My Charming Kids, and things may finally be catching up to her.

Today the bankruptcy trustee filed a motion objecting to exempt property, essentially asking the judge to order that certain assets are NOT exempt from the bankruptcy. What does this mean?

Read moreMckMama Bankruptcy Update: Trustee Files Motion Objecting to Exempt Property

How to Be Richer, Smarter, and Better-Looking Than Your Parents (Zac Bissonnette)

Zac Bissonnette has another winner on his hands with How to Be Richer, Smarter, and Better Looking Than Your Parents. His self-deprecating humor is on display in one of the most useful personal finance books you will ever read. Whether you are young or old, in debt or financially solvent, you can learn how to get your financial house in (even better) order with this quick, interesting read.

The book starts by reminding readers what financial freedom is. It is not the fantasy of being rich and living a life of leisure. It is being able to live life the way you choose: being able to take a lesser paying job because it’s what you love to do, being able to start a family because your debts aren’t eating up all of your paycheck, and simply having more choices in your daily life.

Read moreHow to Be Richer, Smarter, and Better-Looking Than Your Parents (Zac Bissonnette)

Lottery Fraud: Increase Your Chances of Winning the Lottery

Recently, the $656 million prize offered in the Mega Millions lottery gave charlatans an opportunity to sell lottery players “secrets” to winning the lottery. One such guy was “author” Richard Lustig, who wrote the “book” “Learn How To Increase Your Chances of Winning The Lottery.”

Lustig says he has figured out how to “increase your chance of winning” the lottery. He did a media tour to promote his book (more accurately, pamphlet) which tells these secrets. Lustig’s “winning lottery method” was featured on programs such as ABC News and the Rachael Ray Show.

Read moreLottery Fraud: Increase Your Chances of Winning the Lottery

MckMama Fraud: Jennifer McKinney Bankruptcy

Jennifer McKinney Bankruptcy MckMama McMama ScamOnce upon a time, there was a popular mommy blogger named Jennifer McKinney. She called herself MckMama, and had a blog called My Charming Kids. She was not noteworthy in any way – – until her fourth pregnancy took a turn for the worse. Her unborn son Stellan was determined to have a heart condition, and with pleas for prayer, Jennifer’s popularity skyrocketed.

The My Charming Kids blog (with McKinney’s “MSC” or “Many Small Children” as the focus) became so popular that at its height, Jennifer was grossing at least $150,000 to $175,000 per year from advertising and money-making gimmicks.

Questions Raised

Not content to post pictures of her kids and stories about everyday life, Jennifer McKinney was determined to live the high life, and pimp out herself, her family, and her blog to maximize her earnings.  She appeared to have it all: great kids, a happy marriage, a beautiful house, a luxury vehicle, media opportunities, trips, and much more.

Read moreMckMama Fraud: Jennifer McKinney Bankruptcy

Article at CFO.com: Are Your Employees Committing Fraud?

There’s a good chance fraud may be occurring under your nose. How to get better at preventing it from happening on your watch.

Tracy L. Coenen – CFO Magazine

Internal fraud is a huge risk to companies. Experts estimate that on average it costs companies 3% to 5% of revenue each year. Especially when profit margins are thin, internal fraud can literally put some companies out of business.

But executives are prone to underestimating the amount of fraud that exists within their company. They want to believe that their internal controls are better, their employees are more honest, and their ability to stop fraud is more effective than that of executives at other companies.

Read moreArticle at CFO.com: Are Your Employees Committing Fraud?

Seema Kalia, Trinity School, and Libel (or Not) Lawsuit

This morning I was treated to the following tweet directed at me:

The tweet seems meant to draw the attention of those who work to uncover fraud and expose scams, and to support whistleblowers. Similar tweets were sent to a variety of bloggers and media outlets, apparently attempting to drum up support for Seema Kalia. So I started looking…

The tweet led me to this story on the $5 million lawsuit Seema Kalia has filed against Newsweek / Daily Beast and three other media companies, claiming they have libeled her. The lawsuit is summarized in the article:

Read moreSeema Kalia, Trinity School, and Libel (or Not) Lawsuit

Stephen Pierce International: Scam or Bad Business Practices?

A couple of weeks ago, The Salty Droid had an interesting piece on Stephen Pierce and his company Stephen Pierce International. Stephen allegedly provides internet marketing consulting services in exchange for a fee. However, it appears that angry consumers are complaining about what they received from him.

I found a number of complaints:

Multi-Level Marketing Misrepresentations

Recently, multi-level marketing company BurnLounge lost the case the FTC brought against it for allegedly being an illegal pyramid scheme. Multi-level marketing supporters would have you believe that BurnLounge is different from all the other “legitimate” MLMs. But that’s not the case.

The FTC accused BurnLounge of paying distributors for recruiting of new participants, rather than paying them for the retail sales of products or services:

Read moreMulti-Level Marketing Misrepresentations

National Rural Utilities Cooperative Finance Corporation (CFC) Financial Statement Irregularities

The Daily Caller, a Washington D.C. based news site, recently reported allegations of bribery and corruption within the United States Department of Justice. This arises from a situation involving previous allegations of “financial irregularities” within the National Rural Utilities Cooperative Finance Corporation (CFC), dating back to the early 2000s.

CFC was formed in 1969 to help rural electricity cooperatives get access to private funding.  In 1987, the Rural Telephone Finance Cooperative (RTFC) was created as an affiliate of CFC to help rural communities finance their telephone infrastructure. Much of the money loaned out comes from the federal government, with a reported $5.1 billion coming from the U.S. Department of Agriculture and the Federal Agricultural Mortgage Corporation between July 2005 and February 2010.

Allegations of Financial Improprieties

It is alleged that between 2000 and 2005, CFC

“…inflated its own balance sheet with millions of dollars in nonexistent operating income. At the same time, it deflated RTFC’s worth, essentially siphoning money away from a member co-op that it created.”

Read moreNational Rural Utilities Cooperative Finance Corporation (CFC) Financial Statement Irregularities

More on Why Auditor Rotation Won’t Improve Audits

Two weeks ago, I wrote a short piece on the possibility of PCAOB requiring public companies to rotate auditors on a regular basis. Today’s article delves more deeply into the topic, and more clearly lays out the reasons why it won’t work…. and this time I even included independent statistics.

This article was written for an organization that invited me to write about fraud for one of their monthly e-newsletters for corporate finance professionals. The article was rejected because it appeared to criticize the organization and the audit process. Apparently, offering ideas on what might be wrong with audits or how to improve audits is not allowed. Thus, I am publishing the article here.

Read moreMore on Why Auditor Rotation Won’t Improve Audits