In what might be a lagging indicator of recession-spawned misdeeds, the percentage of reported corporate frauds compared with all other reported incidents increased to 20.3% in the first quarter of 2011, a rise of more than 60 basis points from the previous quarter, according to data from 1,000 organizations worldwide. Of the 30,000 ethics- and compliance-related reports from people at those organizations in the first quarter, more than 6,100 concerned accounting or auditing irregularities, embezzlement, kickbacks, and other forms of fraud. [CFO]
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The Restatement That Never Ends: KPMG Hasn’t Received Necessary Docs for Satyam
Back in June we told you about Satyam requesting just a wee bit more time to nail down their restatement of their financial statements. It wasn’t because KPMG and Deloitte weren’t working their asses off, it was more of commitment to get things right. Putting good numbers out there, repairing broken trust, so on and so forth.
Well! The three month extension ends next month but as you might expect, there’s a bit of a problem. More specifically, KPMG is now saying that they haven’t received the documentation necessary to finish the job. Unless everyone is okay with some wild-ass guesses, in which case they can proceed.
[F]or all its documents, KPMG had to depend on the [Central Bureau of Investigation (“CBI”), which is investigating the scam.
NDTV has learnt that KPMG’s analysis of the documents don’t match with the CBI’s. There is a discrepancy between the two which amounts to over [$200 million].
CBI has based its calculations on estimates of Satyam’s assets and liabilities while KPMG says they need documentation to base their estimates.
KPMG says that they didn’t get all the documents needed to make a clear assessment which is why the accounts are likely to be re-stated full of riders.
But again, if you’re cool with some double-entry hocus-pocus, that can be arranged. There’s a merger at stake after all, “This confusion in the numbers could hold up Satyam’s merger with Tech Mahindra, which needs the go ahead from market regulators in India and the US, since Satyam is also listed in the US.”
Good luck getting that U.S. approval.
Satyam accounts restatement: KPMG’s analysis differs with CBI’s [NDTV]
Portly CFO’s ‘Financial Rape’ of Tree Farm Business May Have Funded Dramatic Weight Loss
As far as embezzlements go, Gary Williams did all right for himself. As the CFO of Marian Gardens Tree Farm, he allegedly walked away with $15 million or so before he was convicted of tax evasion and mail fraud related to said allegations. He was pretty good at disposing of the money, as the Orlando Sentinel reports, “[he] spent $1,800 at John Craig Clothiers in Winter Park, treated himself to nearly $9,000 in Prada luggage and leather goods, and indulged in $15,000 in services at an exclusive resort in Montego Bay, Jamaica.” Obviously this leaves $14 mil or so to throw around and it doesn’t appear that this was a problem:
[Prosecutor Mark] Simpson said Gary Williams, who had blamed cocaine addiction for influencing his behavior, drew a six-figure salary from his employers from 2002 through 2007 while he was embezzling millions, destroying business records and encumbering farm equipment for secret loans for personal use.
He made large withdrawals from company accounts, telling bank officials that it was for “employee bonuses.”
Simpson said Williams, who divorced his wife of 35 years and became estranged from his two children, lavished younger men with jewelry, luxury automobiles, Caribbean vacations and gifts that could not be recovered. “This was not just theft,” Simpson said. “This was financial rape.”
Drugs! Phony bonuses! Hot men in hot cars in hot locations probably having hot sex! This is the stuff that straight-to-DVD movies are made of! But unfortunately the victims in this case aren’t doing as well as they have seen a dime of the money that disappeared:
The Hillary family, which owns the farm and employed Williams for two decades, has yet to receive any restitution from its portly former chief financial officer. According to court documents and interviews with prosecutors, Williams blew hundreds of thousands of dollars at lavish resorts in San Francisco, Rio de Janeiro, the Bahamas, Jamaica and the West Indies. He flew friends on chartered jets and helicopters; dined at five-star restaurants; hired a private chef; and partied at marquee nightclubs.
He explained frequent work absences by falsely claiming to have pancreatic cancer. His employers say they thought he was undergoing experimental treatments.
Williams did lose 100 pounds — but from gastric-bypass surgery, a farm executive said.
For whatever reason, the Sentinel felt it necessary to drag Williams’ big-bonededness into this story as it isn’t clear whether or not some of the loot was used to fund the surgery. At the very least, Williams, who is serving 12 years, can hopefully keep his figure in prison.
Jet-setting CFO gets dual terms for embezzling $15M at tree farm [Orlando Sentinel]
5 Crazy Fraud Stories You Would Never Believe (If They Weren’t True)
From Russian government assassinations to multimillion-dollar blood-testing scams, there’s never a shortage of surreal fraud […]