Archive for October, 2007
Fri 26 October 07 · Filed under Fraud News Stories
Companies that relied heavily on telemarketing were hit hard by the Do Not Call list. They were severely limited in doing cold calls over the telephone. Anyone on the Do Not Call list was off-limits, and today that totals about 145 million phone numbers.
One of the ways companies get around the list, is by using something called a “lead card.” They send materials to consumers, and the consumers are asked to send back an enclosed reply for free information about the product or service. When a consumer sends back that card, she or he has unknowingly given the compay permission to call, even if the consumer is on the Do Not Call list.
Prosecutors are beginning to crack down on the deception behind the lead cards. Some companies have falsely implied they were affiliated with the federal government or certain advocacy groups in order to entice consumers to sent back the replies. Some are blatantly deceitful, making statements about changes in Medicare benefits or new legislation passed by Congress.
Little do consumers know that many of the cards will be given to salespeople who will begin making the phone calls. Many of these cards are being sent by marketing companies that later sell the leads to insurance agents, investment representatives, or people peddling trusts or other estate-planning products.
Marketers are banking on the portion of the Do Not Call law that allows them to still call households on the registry if they have agreed in writing to receive the calls. But the Bureau of Consumer Protection says that businesses are not allowed to get that consent for phone calls by using ruses or deceptive tools.
Wed 24 October 07 · Filed under Fraud Detection & Prevention
The regular readers of this blog are familiar with the issues at Overstock.com. The company can’t turn a profit to save its life, but CEO Patrick Byrne blames that on short sellers. The fact is that the financial statements have some curious things in them, but Byrne never gets around to actually straightening out all the discrepancies.
This week Sam Antar offered Byrne an opportunity to do just that… explain discrepancies and answer questions.
You see, Patrick Byrne thought he was being cute during last week’s earnings call when he said:
Sam Antar, if you want to join us as an [inter-locketer], I have to stick around — I have to leave in 15 minutes but I’m hoping you’ll join, Sam.
This is none other than the Patrick Byrne who believes a Sith Lord is masterminding a conspiracy that is causing Overstock.com to be a horrible company. The same Patrick Byrne whose underlings threaten teenage bloggers. The same Patrick Byrne who is so interested in his job that he’s busy playing on the internet while he’s supposed to be paying attention to an earnings conference call for investors. The same Patrick Byrne who posts messages about Overstock.com on discussion boards without disclosing that he is the CEO of the company he’s hyping. The same Patrick Byrne whose financial statements hint to the possibility of earnings management. [Read more...]
Wed 24 October 07 · Filed under Fraud News Stories
Google search:
cpa firm fraud detection
Answer:
That’s exactly what I do via my company, Sequence Inc. Most of my work comes from attorneys, usually outside counsel. They contact me when a client has a situation in which they suspect fraud. Usually, there is a small bit of evidence that triggers an investigation, and I come in to do the full-blown examination and investigation.
When the investigation is complete, the smart companies have me stick around to help them prevent a similar fraud in the future. The information gathered during a fraud investigation can be extremely helpful in tightening controls across the board… hopefully leading to a decreased fraud risk in the future.
Tue 23 October 07 · Filed under Entertainment
This information is old (from early June), but since I have so many people reaching my site with searches related to Flip This House, I thought I’d print it anyway.
I wrote previously about the lawsuit between A&E and Richard Davis of Trademark Properties here and here. Most of my information was derived from a website called Flip This Lawsuit. The owner of that site summarized a June 6 hearing on summary judgment motions made by A&E. Essentially, A&E said that no written contract existed between them and Davis/Trademark, and that the verbal contract wasn’t what Davis claims it is.
Important issues decided during this hearing, per Flip This Lawsuit: [Read more...]
Mon 22 October 07 · Filed under Scam Busting
TheStreet.com issued some upgrades and downgrades late last week, and had this to say about Usana Health Sciences:
Nutritional and personal care products developer USANA Health Sciences (USNA - Cramer’s Take - Stockpickr) has been upgraded to a buy from a hold. Its revenue increased by 16.9% in the third quarter compared with the same period last year. Earnings improved to 70 cents a share from 55 cents per share over the same timeframe.
The company’s return on equity improved to 184.53% in the third quarter compared with 78.97%, a signal of significant strength within the corporation. This return on equity greatly exceeds that of both the industry average and the S&P 500. USANA Health had been rated a hold since August 2007.
Somebody missed the boat when they said that the return on equity figure was a sign of “strength.”
Usana’s return on equity ratio has gotten so high because of the share buyback program. Usana has significantly reduced the shareholders equity figure on the balance sheet, so even if earnings remain at a constant level, the return on equity ratio will go up a lot.
And… they also failed to realize that at the same time shareholders equity is plummeting, the company’s debt level is skyrocketing. Not a sign of strength at all.
Sun 21 October 07 · Filed under Fraud News Stories
Yesterday was the big move of my office from “skid row” to my new building. The moving company was fabulous, as usual. I used Mr. Mover, who moves anywhere in the metro Milwaukee area. They do mostly residential, but can do smaller commercial moves as well. And small is all relative… they just moved 10 trucks of stuff for a company on Friday.
Only one snag in the process… my executive desk did not make it. Believe it or not, it didn’t fit in the freight elevator in the new building. The only way to get it upstairs would have been to (literally) break it in half and hope that it could be reassembled in my office. Yikes! So I decided to get a new desk instead, and I’ll go order that on Monday.
Our new contact information is here. I love the new space!!!
Sat 20 October 07 · Filed under Auditing & Regulations
he trial of KPMG executives charged with creating and marketing illegal tax shelters has been delayed. 13 accused executives had all charges dropped after a judge recently ruled that it was illegal for the government to pressure KPMG to not pay the legal fees of the 13.In this latest twist, the trial is being delayed because of a claim that one of the defense lawyers has a conflict of interest. Judge Lewis Kaplan delayed the case (that was to begin on Tuesday) and removed Steven Bauer of Latham & Watkins, who was representing John Larson.
Larson did not waive his right to have an attorney without a conflict of interest. The alleged conflict came about because Bauer was the attorney for David Makov, formerly charged in the case. Makov is going to testify for the government in the case, so this may be a conflict in representing Larson.
Fri 19 October 07 · Filed under Pyramid Schemes & MLM, Scam Busting
Google search:
usana china
Answer:
Prohibited, but doing business there anyway. Read all about Usana’s illegal business activities in China on the new website by Barry Minkow and Fraud Discovery Institute: Cheating in China. And a summary can be found here and here.
Fri 19 October 07 · Filed under Pyramid Schemes & MLM, Scam Busting
Roddy Boyd at the New York Post has picked up the story about Usana illegally recruiting new associates in China.
Boyd explains China’s laws like this:
Since 2005, China has had very strict laws against multilevel marketing operations on the mainland. Usana, in its most recent annual report, said any entrance into the Chinese market would “require [Usana] to adjust our compensation and selling model.”
However, Hong Kong, which is controlled by China but has separate rules governing its economy, is Usana’s fastest-growing market, with sales growing at an 81 percent clip between the second quarters of 2005 and 2006, according to the company’s filings.
Here’s how Usana is cheating: [Read more...]
Thu 18 October 07 · Filed under Pyramid Schemes & MLM, Scam Busting
During yesterday’s earnings conference call, Usana Health Sciences president Dave Wentz said this:
“For us China is a wait and see with the laws the way they are and currently they are throwing more laws and getting stricter. We see that as a very difficult environment to be successful. We are waiting to see if some of the other companies crack the code and come up with a way to be successful there. We haven’t seen a lot of success from our competitors and we don’t want to jump into that situation that hasn’t been successful for others. So we are going to have things going slowly in the sidelines, keeping an eye on it and watch it till we believe it is a potentially successful market for us and then we will pursue with great speed.”
And then there’s the truth.
Usana is already doing business in China illegally. China has very strict laws against multi-level marketing. How does Usana get around them and tap into this huge and lucrative market? By having Chinese nationals sign up for Usana via Hong Kong. They get a Hong Kong bank account and use the address of a friend or family member in Hong Kong. Voila! They begin doing business on mainland China, underground, of course. [Read more...]
« Newer Posts ·
Older Posts »
