“In my opinion, the problem today is 10 times worse than it was when Enron had its implosion in what was called the era of corporate fraud,” said Fastow. “The things that Enron did, and that I did, are being done today. In many cases, they’re being done in such a manner that makes me blush, and I was the CFO of Enron.” [AT]
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IRS, SEC Put a Stop to the Latest Money Manager Ripping Off the Most Important People in the World
What the hell is gonna to take for a celebrity to get an honest money manager around these parts?
IRS agents arrested Kenneth Starr (not this guy) today who has managed money for celebrities including Martin Scorsese, Uma Thurman and financial shitshows Annie Leibovitz and Wesley Snipes.
The SEC has frozen his assets alleging that Starr “made unauthorized transfers of money in client accounts that ultimately wound up in Starr’s personal accounts.” But it was for a good reason – the man needs roof over his head, according to the complaint “Starr and his companies transferred $7 million from the accounts of three clients between April 13 and April 16, 2010, without any authorization. The transferred funds were ultimately used to purchase a $7.6 million apartment on the Upper East Side in Manhattan on April 16.”
Former New York City Council President Andrew Stein was also named in the complaint, and “is charged with lying to the IRS and federal agents about his involvement with Wind River.” Wind River being a company that Starr allegedly syphoned money to, that Stein used for personal expenses. However we’re mostly shocked to learn that Stein briefly dated Ann Coulter – shudder.
Financial whiz busted for duping celebs clients Wesley Snipes, Martin Scorsese in $30M Ponzi scheme [NYDN]
Celebrity Investment Adviser Charged With Ponzi Scheme [Gawker]
SEC Files Emergency Charges Against New York-Based Financial Advisor for Defrauding Clients [SEC Press Release]
Sam Antar Wants You to Think Like a Crook
In early December, the JDA gave us a little taste of how the mind of a crook works when she interviewed Sam Antar, the former CFO of Crazy Eddie’s.
We caught up with Sam again recently and in case you had decided that he had redeemed himself by speaking to universities, government agencies, and businesses telling those people how to detect fraud, Sam would take issue with that.
“I’m the same crook that I was when I was the CFO of Crazy Eddie’s. I haven’t changed. I got caught,” Sam told us. Sam doesn’t believe in redemption but he will tell you that he’s reformed, “A criminal is like an addict. You’re either in recovery or you’re not.”
In addition to his feelings on his past criminal behavior, Sam has strong opinions about the audit profession and how the current accounting curriculum does not adequately prepare young auditors for the masterminds they’re up against. “To catch a criminal, you’ve got to think like a criminal.”
Sam would never suggest that you all take a turn at white collar crime in order to become better auditors. That would disappoint your parents.
So what are his ideas? Here’s a few things to get you started:
• Sam believes that the current curriculum should be expanded to include criminology, criminal psychology, forensic accounting, and courses that focus on internal controls.
• With this expanded curriculum, an advanced degree program should be implemented for those students that wish to become CPAs.
• In addition, Sam believes that the CPA exam should be expanded to include a section dedicated to fraud.
We did some looking around and found that two schools: Carlow University in Pittsburgh and Franklin University in Columbus, OH both offer undergraduate degrees in Forensic Accounting and that two more: St. Thomas University in Florida and University of Charleston in South Carolina offer graduate degrees.
As long as white collar fraud remains front page news, there will be people asking “where were the auditors?” Right or wrong, that is the reality of the situation. You can fight it tooth and nail but ultimately the market will demand more forensic audits for high risk clients. Even if the odds of you finding a single fraudulent transaction in your entire career is nil, shouldn’t you be prepared for that chance?
Sam thinks so. And he convinced (or maybe just conned?) us. You still got it, Sam.
Photo by Buck Ennis for Crain’s New York and Investment News.
Ex-NBA Star Kevin Garnett Believes His Former Accountant Helped Wealth Manager Screw Him Out of $77 Million
During his illustrious 21-year NBA career, Kevin Garnett was a 15-time all-star, named the league’s […]