Insider: Bradford Richardson, Executive Vice President of Asia Pacific
Company Bio: Bradford joined USANA in December 1997 as executive director of international development, and from 1999-2005 held the roles of vice president of international development and vice president of international. In January 2006, he was appointed executive vice president of Asia Pacific, and currently has profit & loss responsibility for USANA’s operations in the Asia Pacific region. Additionally, Bradford is responsible for the definition and execution of USANA’s international expansion strategy.
Cheating in China: Barry Minkow and Fraud Discovery Institute reveal on October 18 that Usana is illegally doing business in China. Usana employees in Hong Kong teach people how to get around Chinese laws prohibiting the operation of multi-level marketing businesses by opening bank accounts in Hong Kong and having the company ship products to a Hong Kong address for later delivery to the Chinese resident by a friend or family member.
Stock Trades:
October 25 - 5,000 shares for $207,500
October 25 - 5,000 shares for $210,000
October 26 - 5,000 shares for $210,568
Total proceeds = $628,068
Does anyone doubt that he knows how serious the violation of Chinese laws are? Does anyone doubt that Richardson knew full well that the company was violating these laws?
The company falsely stated in SEC filings that they were complying with laws in China. What does this sell-off by an insider tell you? Too bad he’s got another 20,000 shares to unload and probably has to space out his transactions.
On October 18, 2007, the Fraud Discovery Institute Inc. (FDI) released a report detailing the activities of Usana Health Sciences Inc. (NASDAQ: USNA) and its underground operation in China. The New York Post carried the story of an alleged 30,000 undisclosed Usana associates actively conducting multi level marketing businesses in China that impacted downlines by the false inflation of sales in the U.S. and Canada, Australia and Hong Kong.
With the release of video footage of an undercover meeting that took place at the Usana Hong Kong offices on October 10, 2007, the discussion about the accuracy and authenticity of evidence previously presented by FDI regarding whether Usana really does have 30,000 undisclosed associates working illegally in and through China appears to be settled. FDI released the unabridged and unaltered video footage of Usana executive Mr. Lesley Law, who possesses the title of Distributors Services Director. In the 40-minute, in-person videotaped undercover meeting that took place with two prospective associates, Mr. Law admits to the 30,000 associates.
“Watch between the time of 32:30 (minutes into the video taped meeting) and 33:00 (minutes into the video footage) and the devastating admission is made. The undercover video video speaks for itself,” said FDI’s Barry Minkow. Read the rest of this entry »
Mary Kay is a product based pyramid scheme, which means they use the product to lure you in, trumpet the potential of product sales, and then recruit you to be a consultant. Recruiting is the ultimate goal, and very little actual retailing of products goes on.
Mary Kay Inc. sells $2 billion (wholesale) to its consultants each year, and the bulk of that collects dust in basements and garages because there is not much of a market for the products. Read more about Mary Kay on this blog and on my consumer awareness site Pink Truth.
Sam says that he went to BestBuy.com and bought a hard drive for in-store pick up. What he got was a box of bathroom tiles. Now Best Buy is saying he’d better take it up with manufacturer and that they’re not going to issue a refund and that Sam should just take his loss. We don’t think he should. We think it’s not legal to sell someone a box…
I am in favor of school vouchers. It has worked well in Milwaukee. Don’t let anyone tell you any different. Is the system perfect? No. But the public schools here are terrible, and at the very least, the voucher program gives children an alternative.
Does the voucher program help everyone? No. Some parents are not involved with their children and don’t really care, so they don’t utilize the program. But for the low-income households with parents who care, it has been fantastic.
All of the voucher schools haven’t done well. That is the risk we take. But these children are being given a chance. And that’s how true change will come about. Without the voucher program, the public schools and public teachers have no incentive to improve.
Should vouchers be done in Utah? Yes. Milwaukee has shown that it can work, and low income children deserve a chance.
But Patrick Byrne is the worst kind of spokesperson, and the voucher supporters would do well to distance themselves from him. He has a history of bizarre behavior and ramblings on ludicrous conspiracy theories.
That is an interesting search. The reader was directed to my article Finding Fraud With the Right Auditor, which differentiates between traditional external auditors, tax auditors and forensic accountants. It’s important for those engaging auditors and consultants to know the differences between the two.
Are traditional auditors a “necessary evil”? In many ways, yes. They’re expensive and their usefulness is limited. But they’re required, so they’re brought in every year to look at the financial statements.
See here’s the thing… I understand what Patrick was trying to say. It’s just that he said it in the worst possible way, and it came out sounding very insulting and condescending. And instead of just saying to the public “hey that came out wrong and here’s what I meant,” he jumps up and down and says “they’re lying!”
No, Patrick, they weren’t lying. It’s on video. You said it. Why not try a new approach just this once?
Class action suits against auditing firms PricewaterhouseCoopers and Deloitte & Touche are raising questions about future lawsuits. Auditors are suing PwC because they say they were denied overtime pay and benefits, and the suit covers all associates and senior associates of PwC in California.
The firm is saying that the auditors were properly classified as exempt employees under California law, and therefore they were not entitled to overtime pay.
The lawyers say something else. They say that under California law, only certified public accountants can be exempt from overtime pay. Most newer associates aren’t yet licensed when they go to work for accounting firms, so this is an interesting strategy.
Also in California is the suit against Deloitte. Tax associates and tax seniors are suing, saying that they should not have been classified as exempt employees, and should have been eligible for overtime pay. The firm says it has complied with all laws.
We are left to wonder what effect this might have on the large accounting and auditing firms. It is no secret that associates and senior associates work long hours and are salaried. If these suits in California are successful, it could lead to suits in other states, costing the Big Four millions of dollars in legal fees and possible backpay for associates.
Stan O’Neal, CEO of Merrill Lynch, is said to be stepping down on Monday. He is not going willingly, however. The board of directors was meeting this weekend to discuss candidates for the postition.
O’Neal’s departure comes following an $8.4 billion writedown in the third quarter, with most of that related to mortgage-related assets.
Up to this point, O’Neal appeared to have done a good job at Merrill Lynch, boosting the company’s profitability and expanding its international reach. But former colleagues now say that his weakness was firing many longtime employees in his early days at Merrill Lynch. His independence and unwillingness to listen to contrary views may have led to the lack of support he now has from the board of directors.
Adding to the criticism was O’Neal’s discussion with Wachovia Corp. CEO G. Kennedy Thompson. O’Neal asked him if they would be interested in buying Merrill Lynch, but he had no authority to even have that conversation.
Patrick Byrne, CEO of Overstock.com made a teeny little goof this week. Well, okay… it wasn’t so teeny. It was pretty bad.
Byrne was part of a debate on school vouchers in Utah, which he favors. During the debate, he said that when minority students don’t graduate from high school, “you might as well burn them.”
Byrne didn’t apologize Friday. He said he said nothing wrong and his comment is being distorted.
“It’s worse than a cheap shot. It’s a lie. Somebody is trying to create the implication I said the exact oppostie of what I said in that answer,” Byrne said.
The NAACP is demanding an apology from Byrne, but he’s got this to say:
“I’m saying we should not be throwing out kids. We should not be discarding kids. I’m saying the current system does,” Byrne said. “Forty-two percent of minority kids in Utah don’t graduate. That is a calamity. The people who are saying, ‘That’s OK, let’s not change the system,’ they are saying we might as well throw out those kids. Those kids don’t matter.”
Yo, Patrick! They’ve got it on video! Check it out for yourself…
Tracy Coenen is a forensic accountant and fraud examiner who investigates white collar crimes, including cases of financial statement fraud, embezzlement, tax fraud, and insurance fraud. She is the author of Essentials of Corporate Fraud and more than 100 articles on fraud featured in industry publications.
