• Rangel Says House Democrats Will Renew Tax Breaks – Renewal of Chuck’s leases on rent controlled apartments are another story. [Bloomberg]
• ‘Botax’ In Senate Health Bill Upsets Plastic Surgeons – An additional 5% tax on those calf implants. [NPR]
• Losing Altitude – CFO pay fell in ’08. Cue the trombone. [CFO]
• Bagel Company Owner Indicted for Stealing Withholding Taxes – This would never happen at David’s. [Web CPA]
Author: Caleb Newquist
Founding editor, Going Concern.
Tom Petters Is Not a Bentley Guy
Swashbuckling cocker spaniel Tom Petters has managed to keep his focus the last few days, testifying in his trial for his alleged $3.5 billion Ponzi scheme.
His cross-examination by Assistant U.S. Attorney Joe Dixon included several interesting exchanges including Petters admitting that he was the ‘heart and soul’ of PCI despite his claim of being duped for fifteen years by his office manager/confidante/lover, Deanna Coleman and Robert White, his former CFO. Dixon also accused of Petters of getting drunk on the super-happy-fun times he was having as a captain of industry:
Dixon moved to a line of questioning meant to show Petters used investors’ money to support his other businesses and lifestyle.
Dixon asked about Petters’ ownership of a Bentley, his use of corporate aircraft and homes on Lake Minnetonka and in Florida.
“You wanted the life of a corporate tycoon,” Dixon said.
“No, others wanted me to have that life,” Petters said, his voice rising. “I did not want the life of a corporate tycoon. Absolutely, I didn’t want that.”
Petters said his friend Dean Vlahos, a founder of the Champps and Redstone American Grill restaurant chains, bought him a Bentley as a gift.
“I didn’t want a Bentley,” he said. “I’m not a Bentley guy.”
See? Tom Petters was thrust into this swashbuckling lifestyle by others. The man can’t finish a book if his life depended on it, he can’t possibly be this titan of capitalism. He would’ve been perfectly happy driving a late 70s Oldsmobile Cutlass around on fumes with the headliner completely torn out. In fact, he would’ve preferred that.
Prosecutor jabs, Petters takes to ropes [Minneapolis Star-Tribune]
More GC Coverage of Tom Petters:
Even as the Doors Were Being Busted Down, Tom Petters Was Sure Everything Would Be Fine
Tom Petters Was Pretty Sure He Was Going to End Up in a Dumpster Somewhere
Ernst & Young and McGladrey & Pullen Both Have a Petters Problem
Deloitte Is Saving Money by Offering Zach Morris Phones
We kid, we kid. Obviously you’re aware that you can shell out $13 a month and get an iPhone. Whether that’s worth it or not, we’ll let you decide but if you don’t want the iPhone, you’re taking your chances with another option, as one source describes, “crappy Windows Mobile devices that are getting shoved down our throats.”
Not only that but if you’re looking to get reimbursed for your PDA, don’t expect to get to choose whatever you want. Or to spend that much:
Deloitte also now limits the re-imbursement of PDAs to $199.99 + taxes. They used to cover the entire cost of devices that they chose to support (which mostly sucked to begin with). You’d figure that since they only pay $199.99 that we’d be able to pick the device now… but no; still limited to their “approved list” of crappy devices.
We’re not really up-to-date on the whole who-gets-what-phone-at-what-level question these days so if you’ve got some insight for your firm, discuss in the comments.
Baker Tilly Virchow Krause Merges with Beers & Cutler
Chicago-based Baker Tilly Virchow Krause announced today that they are merging with Beers & Cutler, a firm based Vienna, VA.
This latest acquisition by BTVK — its twelfth this decade — is part of the firm’s “national expansion” and will add to its presence on the East Coast with the Vienna office acting as the hub in addition to its New York City location.
The Washington Business Journal reports that BTVK’s expansion goals include doubling its revenue to $400 million by 2012, which CEO Tim Christen calls ‘conservative.’
From the press release:
“When we look for merger partners, we focus on the quality of the people and the reputation of the firm. There are many synergies between Baker Tilly and Beers + Cutler, and we see Washington, DC as a critical market as we continue to develop the Baker Tilly brand in the U.S.,” said Tim Christen, CEO of Baker Tilly. “As independent members of Baker Tilly International, we have been colleagues for many years, and together, we believe in the power of the network and the value it brings to our clients around the world.”
Beers & Cutler had been expanding their practice rapidly over the past four years, increasing its number of employees from, 202 in 2005 to 319 in 2008. In 2009, B&C cut 55 employees — 17% of their total headcount — however, managing partner Ed Offterdinger insists they were not related to the merger:
“[These layoffs] were not at all a factor in the decision to merge,” said Ed Offterdinger, Beers & Cutlers’ managing partner. “We’re doing this from a position of strength.”
The downturn is easing, and the firm is seeing increased demand for its services, and “the merger will help accelerate that,” he said.
The Washington Business Journal does report that the merger will lead to an additional ten layoffs, but that the firm will be adding staff “in the near future.”
Our understanding is that Mr. Christen and Mr. Offterdinger are meeting with Beers & Cutler staff today and were not available for interviews or additional comment. If you work at either of these firms and have any additional details (especially if you were in the B&C “meeting”) on this story, get in touch with us.
Beers & Cutler to merge into Baker Tilly Virchow Krause [Washington Business Journal]
BTVK_Press Release.pdf
Deloitte, Grant Thornton Settle with Parmalat Investors
U.S. Investors in Paramalat — the disturbingly long-life milk producer — have settled their lawsuit with Deloitte and Grant Thornton for $8.5 million and $6.5 million respectively.
Personally, if you make the decision to be associated with a company that consciously screws with the natural dairy production of a bovine, we’d say you’re on your own. However, this is America, where if you lose an asston of money on an investment (despite the morally ambiguous nature of said investment, not to mention the shiesty management), you sue.
The case was brought by several funds on behalf of thousands of investors who said they lost money from Parmalat’s multi-billion-dollar fraud.
“It is very rare that worldwide coordinating audit networks enter into settlements like what we have,” said James Sabella, a lawyer at Grant & Eisenhofer PA in New York representing the investors, in an interview.
Lead plaintiffs include Hermes Focus Asset Management Europe Ltd, Cattolica Partecipazioni SpA, Capital & Finance Asset Management, Societe Moderne des Terrassements Parisiens and Solotrat, court documents show.
We don’t know about the statement that settlements are “very rare”. The Big 4 has paid out nearly $6 billion in settlements since 1999 and settlements this year have included Deloitte/American Homes and E&Y/Akai.
Regardless, the good news for the investors is at least they got something. The bad news is that it was far less than the amount they claimed to have lost:
The U.S. equity investors believed they suffered $138.2 million of damages, but Sabella said their claims might have been reduced by earlier settlements. He also said taking their case to a jury could have been “full of difficulties.”
A Deloitte spokesperson declined to comment pending the approval of the settlement by Judge Lewis Kaplan. Grant Thornton did not immediately return our email requesting comment.
This latest development in the story that never ends Parmalat case is the first that we’ve reported that doesn’t involve the persistence of the company trying and failing and trying again to chase down banks and auditors for money related to the company’s bankruptcy in 2003. From the looks of it, we’ll be following these developments long into the next decade.
Job of the Week: The Decade Is Closing Fast, Have You Found a New Job?
It’s already less than a week until Thanksgiving and you haven’t started your job search have you? Allow us to give you a push so you can get a fresh start to the new decade. State Street needs tax analysts in Quincy and Newton, MA. Get details after the jump.
Company: State Street
Location: Newton/Quincy, MA
Position: Global Services Tax Analyst Manager, Senior Associate
Experience Required: 5 – 7 years
Key Responsibilities: Manage and support a staff responsible for timely tax withholding and reporting and associated client servicing activities; Document and maintain group procedures; Ensure operations, processes and employees adhere to all regulatory and business continuity requirements and corporate standards; Constantly review operations workflows for process improvements, unit cost reductions and service level improvements; Audit processing functions; Assist in new tax product developments and projects; Provide client service supporting fund groups, external clients and global site partners;
Other Requirements/Preferences: Master of Science in Taxation or other advanced degree is preferred; Bachelor’s degree or equivalent is required. A minimum of 5 years of operations related, global custody, accounting, income, or tax processing related experience is required; Knowledge of non-resident alien tax withholding issues, tax reporting, and tax treaties is required.
See the entire description over the GC Career Center and visit the main page for all the latest job postings.
Rumor Mill: KPMG L.A. Layoffs, Maybe Dallas?
We’ve received multiple reports of layoffs that occurred last week in the audit practice of the Los Angeles office.
The numbers have been described as “a few” and the news has been “hush hush” making us wonder if these cuts were some unfinished business from either the August and September rounds.
There also have been rumors about additional layoffs in Dallas tax but we don’t have any more details than that.
If you’ve got any details for these layoffs or details for other cities, get in touch and discuss in the comments.
3rd Quarter CPA Exam Results Are Rolling Out
Hot on the heels of our last post, a message from one elated reader:
I’m in Illinois and I just got my Audit score when I logged in this morning. (it was my final section and it was a pass so I’m done!!!!!!!!!!!!!!)
Now get on that ethics exam! The results rolled out yesterday afternoon, so discuss your results in the comments. Pass, fail, whatever.
Preliminary Analytics | 11.20.09
• Goldman Holders Miffed at Bonuses – And there’s bellyaching that GS is trying to pull a fast one by including temps to pull down the comp per employee. Sneaky. [WSJ]
• EBay completes sale of Skype – The auction block gets $2 billion and still retains a 30% stake. [Reuters]
• SEC Told to Improve Ways It Chooses Probe Targets – Eenie, meenie, miney, moe just won’t cut it anymore. [AP via NYT]
• US House Panel Approves A Toned-Down Accounting Proposal – After amendments, the final word on all things FASB remains with the SEC. [Dow Jones]
Review Comments | 11.19.09
• Don’t forget to submit your questions for our weekly CPA Exam post, >75.
• Pa. Woman Can’t Re-Sue Ernst & Young for $103M – Tragic conclusion. [ABC News]
• ‘Cheat’? I Don’t Think the Word Means What They Think It Means – Tragic ignorance.
[Tax Update Blog]
• Singer Aaron Carter Owes IRS Over $1 Million – Tragic boy. [Web CPA]
• Is Wall Street Comprised Of A Bunch Of Crackwhores Who Can’t Help Themselves, Crying Out For Help? John Mack Says Yes – Tragic whores. [DB]
Joe Francis to Declare Bankruptcy, Owes IRS $34 Million
Tragic news from the world of wholesome entertainment as Joe “Back to the business at hand of slapping women” Francis is allegedly going to declare bankruptcy tomorrow after receiving liens for nearly $34 mil.
Not such a good thing for Francis since he just hammered out a plea deal two months ago.
According to Tax Girl, that plea agreement, “requires him to resolve his outstanding tax issues. I mean, it is a resolution – but I’m guessing not so much what IRS had in mind.”
They certainly aren’t apologizing for this one.
Girls Gone Wild Founder To File Bankruptcy, Blames IRS [Tax Girl]
Other GC Coverage of Joe Francis:
SHOCKER: Joe Francis May Have Attracted Slimy Business People
Joe Francis Plans to Argue That Anything Related to Topless Girls is Deductible
Will PwC and KPMG Reconsider Canceling Their Holiday Parties?
Doubtful! But with the news of sugarplums dancing in some Big 4 heads, we got to wondering if any of the offices of KPMG and PwC might reconsider the firm-wide kibosh on the Holiday jamma-lamma-ding-dong.
Maybe this would be a coup d’état of the highest order but we’ve heard of offices going rogue in the past, so it’s worth mentioning.
Perhaps we’re expecting too much but it seems possible that partners in your local offices could rally the troops by pooling together some of their own cash and springing for cheese trays a few kegs of Beast.
Partners, you wouldn’t necessarily have to let anyone use the bathroom (especially the new associates, we know how they overdo it). You could set up Rent-A-Johns in the driveway.
Because as it stands right now, it appears that Bob Moritz will only be handing out fresh undies, and Tim Flynn will argue that the Phil Mickelson sponsorship is the gift that keeps on giving. That may fly with some but certainly not all. Discuss your hopes for an eleventh hour fiesta in the comments.