“I think it’s obviously obvious.”
~ Forensic accountant Mark Berenblut, responding in the affirmative that R. Allen Stanford knew he was “misrepresent[ing] the liquidity and soundness of the CDs.”
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Koss: Financial Results Will Be Better Now That the Whole Fraud Thing Is Over
Hopefully! Headphone master Michael Koss officially announced that things are back to business as usual at casa de Koss now that Sue Sachdeva’s sticky fingers aren’t around.
“The company has continued to operate in the normal course of business despite the disruption resulting from the discovery of the unauthorized transactions,” Chief Executive Officer Michael J. Koss said in a statement. “We believe that the elimination of these unauthorized transactions will enhance our future operating results.”
What a relief! No mention of how the pending lawsuits against Koss will affect operating results, however. We understand that it could be a sensitive issue at the moment.
The Company filed its 10-Q yesterday and an 8-K today that explains that those restated, not-so-good results that you’re expecting will be done pronto. Don’t expect to see anything before April but not past June, swear.
After that, watch out everybody, Koss will be on fire, blowing those analyst estimates out of the water. In the meantime things are moving along and those internal controls, yeah, they’re working on them but they reminded everyone in the 10-Q that even if they designed the best internal control systems on Earth, it still wouldn’t guarantee that bad stuff won’t happen:
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. It is possible for even the best control system to be circumvented by those with the intent, knowledge and opportunity to do so.
Not to put to fine a point on it but a half-assed control system would have detected this fraud, never mind the “well conceived and operated” part.
With fraud claims exposed, Koss expects better financial results [Milwaukee Journal-Sentinel]
Crowe Horwath Is Amped for International Fraud Awareness Week
What? Your firm hasn’t reminded you that November 8 – 14 is International Fraud Awareness Week? Shameful. Lucky for you, Crowe Horwath is all over this.
Crowe is offering tips to its clients “on how companies can help turn their own personnel into their best fraud preventers and fraud detectors” because they are sick and tired of being the ones finding all of it.
Here’s a taste of their ideas:
• Know who you hire &ndash Avoid guys in tracksuits and with short attention spans.
• Create an ownership environment &ndash That stapler? It’s yours.
• Keep employees informed &ndash Emails about the latest dead-end marriage in the office do not count.
• Establish sound internal controls &ndash Unless you don’t have to.
• Implement checks and balances &ndash Again, optional.
While we admire Crowe’s attempt to get proactive, we’re concerned that, inevitably, the “Army of Fraudbusters” will start using their newly acquired fraud detection skills for outing their office enemies for petty crimes such as leaving food in the fridge, ass-photo copying and the like.
Create An Army of Fraudbusters Within Your Organization [Press Release]
Koss Fraud May Have Been Due, in No Small Part, to Michael Koss Holding Five Executive Positions
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It’s been nearly three weeks since we last picked up the Koss/Sue Sachdeva beat, when we told you about Michael Koss resigning as the audit committee chair of Strattec Security Corp. At that time, Strattec had also elected to give Grant Thornton the boot as its auditor.
Over the weekend, the Milwaukee Journal Sentinel posted a lengthy-ish piece on the “relaxed oversight and lax controls” as the opportunity for the chronic shop ’til you dropper Sue Sachdeva to make off with $31 million. These particular issues (i.e. incestuous management and virtually no internal controls) are a matter of record although it’s interesting to note the new details that come to light.
The article mentions how Michael Koss managed to “serve” in five executive roles at the company: vice chairman, chief executive officer, chief operating officer, president and chief financial officer. PLUS, the aforementioned audit committee chairmanship at Strattec.
Now, we’re not entirely sure what the responsibilities would be for each of the positions at Koss but at a regular company, one of these jobs would result in some or possibly all of the following: insomnia, workaholism, a drug problem, an ugly divorce. Throw in the responsibilities of an audit committee chairmanship and one would assume that Michael Koss walked across Lake Michigan to get to work.
Oh, and just so you’re aware, the Journal Sentinel brings up that MK was an anthropology major. You may have some opinions about that.
The JS also spoke to one of the women that was fired along with Suze, Tracy Malone, who “still speaks highly of the company, although it fired her and objected to her claim for unemployment compensation.” Koss fired Malone because they allege that she “she knew of the misappropriation of funds but failed to report it to superiors.” Ms Malone’s attorney has stated these allegations are false.
So hang on a minute. Your lawyer says you were fired under “false allegations”, the company rejects your claim for unemployment comp, and you still speak highly of said company? Yeesh, have some self-respect lady.
Theft at Koss blamed on relaxed attitude, lax oversight [Milwaukee Journal Sentinel]