PLUS: KPMG is accused in a lawsuit of “appalling” audit work that allowed a U.S.-listed Chinese biotechnology company to carry out a “brazen” $400 million accounting fraud.
Ex-Hillandale Farms accountant admits to $6.8 million embezzlement scheme [Pittsburgh Post-Gazette]
Jonathan Weston, the owner of Katie’s Kandy in Pittsburgh, admitted last month in federal court that he stole nearly $7 million from Greensburg, PA-based Hillandale Farms, a national egg distributor.
Weston, 58, of Canonsburg, PA, pleaded guilty on Aug. 23 to fraud conspiracy, money-laundering conspiracy, and tax fraud. and became a federal felon.
Weston, a former accountant at Hillandale Farms, engaged in the scheme with his late secretary and bookkeeper—known in court records only as VP—to steal $6.8 million from the company and then launder it through various businesses they controlled to buy fancy cars, real estate, dinners, trips, clothing, and the like.
Weston had been indicted in 2021. VP died in 2019.
KPMG sued for $830mn over ‘appalling’ Chinese audit [Financial Times]
KPMG has been accused of “appalling” audit work that allowed a U.S.-listed Chinese biotechnology company to carry out a “brazen” $400 million accounting fraud, the Hong Kong High Court heard on Sept. 5.
The liquidator of China Medical Technologies, which collapsed in 2012 and whose senior executives are wanted on fraud charges in the U.S., said KPMG failed to ask “obvious” questions that would have “easily” exposed the fraud.
These included not questioning a large related-party transaction by the group in 2006, when it acquired a Chinese diagnostics business worth $155,000 for $176 million, according to the liquidator.
It is suing KPMG on the grounds that losses at China Medical “flowed from” its negligent audit work, which gave the company accounts a clean bill of health in 2007 and 2008, according to Monday’s hearing. It is asking for as much as $454 million to cover allegedly misappropriated cash and dividends that were paid out to shareholders while the company was operating under a negligent audit, plus interest of more than $376 million, according to a person close to the matter.
KPMG has denied the allegations.
Accountant Accused of Stealing Millions of Dollars From Construction Company [CPA Practice Advisor]
A former senior accountant for a construction company in Chicago was indicted Aug. 12 on fraud charges for allegedly embezzling millions in company funds.
The indictment charged Richard Mandarino, 43, of Scarborough, Ontario, with three counts of wire fraud. His arraignment in U.S. District Court in Chicago has not yet been scheduled.
A press release from the U.S. Attorney’s Office for the Northern District of Illinois says Mandarino committed the alleged fraud from 2015 to 2017 while he lived in Canada and worked on the unnamed construction company’s Canadian business projects. The indictment alleges that Mandarino fraudulently embezzled and obtained more than 2 million Canadian dollars.
Mandarino allegedly entered false payment requests in the construction company’s accounting system, causing checks to be issued to vendor companies for goods and services that Mandarino knew were never provided, according to the indictment. He then converted those payments for his and others’ personal use. Mandarino allegedly concealed the thefts by creating fictitious credits and offsets in the construction company’s accounting system.
Oklahoma court-appointed accountant faces embezzlement charges after allegedly stealing $1.2 million [KOCO-TV]
An Oklahoma court-appointed accountant faces embezzlement charges after allegedly stealing $1.2 million from a failed insurance company.
State records show Nestor Romero was appointed as “receiver” for Red Rock Insurance in 2014. The attorney general said he spent the next five years ordering fraudulent transactions, totaling more than $1 million.
If convicted of embezzlement, Romero could go to prison for eight years and pay $10,000 in fines, along with paying back more than $1 million in stolen money. The state called on Romero when Red Rock Insurance couldn’t pay off all the customer claims they owed.
Former WFYI accountant charged with embezzling more than $270,000 [Current]
Mindi B. Madison, a former accounting specialist for WFYI Public Media in Indianapolis, has been charged with conspiracy to commit wire fraud and faces a maximum penalty of 20 years in federal prison if convicted.
Madison, who started working for WFYI in January 2018, allegedly embezzled more than $270,000 from the station with help from an unnamed co-conspirator who was neither a WFYI employee nor vendor, according to a Thursday news release from the U.S. Department of Justice’s office in the Southern District of Indiana.
“As an accounting specialist, Madison had access to WFYI’s accounting software, and was trusted to present legitimate expenses, claims, invoices, and supporting documentation along with the unsigned WFYI checks to employees at WFYI who had signature authority for their approval and signature,” the release said. “Instead of presenting legitimate claims that arose out of WFYI’s legitimate business expenses for signature and payment, Madison abused her position of trust, and presented at least 156 fake claims and invoices for payment.”
Accountant sentenced to 33 months for embezzling nearly $2 million from interior design firm [CBS News Bay Area]
A judge sentenced an accountant working for a San Francisco interior design company to nearly three years in federal prison for embezzlement of nearly $2 million, the U.S. Department of Justice announced on Tuesday.
Kerry Kit Yee Tang, 45, was employed as the controller of the design company from December of 2018 to January of 2021. She was indicted by a federal grand jury on Dec. 16, 2021 on five counts of bank fraud involving embezzlement from her employer. Tang pleaded guilty to all five counts in May of this year.
Prosecutors said that Tang was the only employee that handled accounting at the firm, but she was not authorized to sign checks. Tang would draw checks on the company’s bank accounts and forge the signatures of one or both of the company’s principals on the checks without their authorization. Over two years, she embezzled more than $1.9 million by writing 69 checks, some of which ranged from $30,000 to $100,000. Sixty-six of the checks were maid payable to herself as well as third-party companies. These third-party companies never performed any services for the design company.
Former Boardman business accountant accused of stealing hundreds of dollars [WFMJ-TV]
Tricia Cormell, the former chief accounting officer of two businesses in Boardman, OH, was arrested and charged with grand theft on Aug. 25 after her former boss says she stole hundreds of dollars from the company by giving herself raises, bonuses, and buying personal items using company credit cards.
The arrest came four months after a police report was filed by her former employers, Pipino Management and the Niles Restaurant Business, which have an office at the same address in Boardman.
Cormell allegedly bought personal items on the company’s accounts from Amazon and had them delivered to her home. The employer also claims that Cormell gave herself a $36 per week raise and extra bonuses of $600 and $1,200, signing the checks with a rubber stamp of her boss’s signature.
The employer believes the thefts amounted to $5,000 going back from November 2020 until Cormell was fired this past April.