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Accountants Behaving Badly: Ex-KPMG Auditor Detained, Stealing From Clients, Ripping Off Boss

Plus, healthcare accountant sentenced to two years in jail for embezzlement, and tax preparer gets three years for filing fraudulent tax returns.

Auditor detained after saying devil told him to kill his sister [Metro U.K.]
Khalid Ashraf, who had worked as an auditor for KPMG for eight years until October 2018, pleaded guilty to manslaughter on Nov. 14 for killing his sister and was detained in a mental health facility.

Khalid Ashraf

Ashraf, 32, who has paranoid schizophrenia, was arrested by police on Jan. 5, 2019, after he strangled his older sister, Sarah Ashraf, 35, in his flat in East Ferry Road, Docklands, East London after a fierce struggle.

Ashraf, originally from Pakistan, was arrested on suspicion of murder and later told police: “Satan asked me to murder her.”

A psychiatric report said Ashraf was “suffering from an abnormality of mental functioning” at the time of his sister’s death, and found the killing was “entirely attributable to the defendant’s mental illness.”

They hired him to pay their taxes. He stole $300,000, Largo police say [Tampa Bay Times]
Dennis Maxey, who police say has a “history of fraud,” was arrested on Nov. 14 on charges that he stole more than $300,000 from clients who hired him to pay their taxes.

Dennis Maxey

Maxey, 72, is accused of stealing the money over the course of several years from a handful of people. Arrest affidavits say the victims gave Maxey money to pay their taxes, “but it was recently discovered that he never actually paid the IRS for them and when confronted he gave them varying excuses but could not provide proof that the IRS was actually paid and it was later confirmed by the IRS that no taxes had been paid on the victims’ behalf.”

Maxey faces charges of scheme to defraud and grand theft, both first-degree felonies.

Florida Keys accountant accused of ripping off his boss [Miami Herald]
Adam Ibrahim Moore, who worked as an accountant for a Key Largo plumbing company, was arrested on a grand theft warrant on Nov. 14 after an investigation showed he stole $21,200 from his employer.

Adam Ibrahim Moore

Moore, 32, allegedly began stealing the money in May 2018, after his employer, Seaway Plumbing, discontinued his monthly vehicle maintenance bonus because the company provided him a take-home car.

However, Moore, who was in charge of payroll, continued to pay himself the extra money, authorities said.

Pearl accountant charged with embezzlement [WJTV]
Brandy Hales, the owner of Hales CPA Firm PLLC in Pearl, MS, was arrested and charged with felony embezzlement on Nov. 14 for allegedly taking $47,120.33 from her clients for her personal use.

Brandy Hales

Hales, 48, is scheduled to appear in court on Nov. 21.

KC woman sentenced for embezzling $547,000 from health care foundation [Justice Department]
Kathleen Frederico, who was employed as the accounting and special projects manager at Saint Luke’s Foundation in Kansas City, MO, was sentenced on Nov. 12 to two years and three months in federal prison without parole for embezzling almost $547,000 from the healthcare foundation.

Frederico, 52, who pleaded guilty to wire fraud on June 4, admitted that she conducted two related fraudulent embezzlement schemes over a 14-year time period while employed at Saint Luke’s Foundation.

She began embezzling from the foundation in June 2003 and continued to embezzle until March 29, 2017. The investigation has revealed Frederico’s spending of the embezzled funds included:

  • More than $150,000 on shopping and retail.
  • More than $67,000 in cash.
  • More than $30,000 in travel.
  • More than $21,000 in internet purchases to support her illegal drug habit.
  • Mortgage payments, utility bills, and other living expenses.

In the primary fraud scheme, Frederico created unauthorized checks made payable to herself. To conceal the embezzlement, she entered a different payee into the general ledger and created or falsified corresponding invoices. Through this method, Frederico embezzled at least $441,268.

Frederico also created unauthorized checks in which the foundation paid her personal credit card bill, and on two occasions, a relative. Through Frederico’s second fraud scheme, she embezzled at least $105,333.

Owner of Winter Park tax business sentenced to 36 months in federal prison for filing fraudulent tax returns [Justice Department]
Leslie Muniz, owner of Royalty Tax Services in Winter Park, FL, was sentenced to 36 months in federal prison on Nov. 14 for aiding and abetting the filing of false federal income tax returns.

Between 2012 and 2016, Muniz prepared, or caused her employees to prepare, hundreds of fraudulent tax returns for clients claiming false itemized deductions and fake Schedule C businesses and business losses in order to inflate her clients’ refunds. Muniz then used tax preparation numbers assigned to her employees to file the fraudulent tax returns with the IRS to avoid having the returns traced to her. When employees at Royalty Tax Services questioned Muniz about her tax practices or her use of their tax preparation numbers, she fired them.

The total loss to the U.S. as a result of Muniz’s fraud was more than $1.6 million.