He told the court that he did not conduct any independent auditing or verification of financial statements or tax returns provided by Madoff and “others” at Bernard L. Madoff Investment Securities LLC in New York.
Friehling did not state who the ‘others’ were but the U.S. Attorney hinted that we’ll get to know sometime. For now, Friehling is a free man, out on $2.5 million bond until his sentencing which is tentatively set for February.
He faces up to 114 years in prison but similar to Madoff’s chief bald-faced liar, Frank DiPascali, his cooperation should result in a lighter sentence. And by lighter we’re guessing that means he’ll still leave prison horizontally.
What do we know about the scandal one year later – its causes and how to prevent similar frauds in the future? Not much. The experts we should look to for answers, Satyam’s auditors Price Waterhouse India, are accused of being complicit and are still in jail. Who’s guarding the guardians? We’ll have to wait for the shareholders’ lawsuits and the SEC here in the US to hear what really happened, who all benefitted, and who is ultimately responsible.
Judging by the pace of things, we’re guessing the lawsuits won’t be resolved in our lifetime. While we are around however, we’ll keep you updated on what does happen whether it’s reasonable requests from PwC to jailhouse brawls (please God).
Before we can get into this particular penny stock scam, it would be wise to define the penny stock scam for the uninitiated. It’s a pile-in, financial porn pump and dump. These particular crooks decided to take to Twitter and Facebook to get new fish to buy into their easy to fill 2×1 matrix. Since Twitter is inundated with all level of bizarre MLM bots and pyramid scheme tweet spam, it’s easy to see how an effective a tool it can be in perpetuating financial fraud.
The Manhattan DA’s office says 11 of the 22 participants used Twitter feeds and websites to lure “investors” (read the fine print, people) to buy a bunch of cheap stocks they’d artificially inflated. They made off with $3 million and “investors” lost $7 million.
I use the word “investor” loosely. If you’re getting your stock picks from some spammy Twitterfeed that isn’t even run by a human being (or solely from one who is, so far you aren’t required to register with the SEC to talk about stocks on Twitter) maybe you had it coming. So far we haven’t seen the offending tweets, if you know where to find them let me know.
Penny stock scams are not limited to Twitter and even former SEC lawyers have been convicted of using them to take advantage of gullible “investors.” Like this guy, who brought civil cases against white collar criminals for 15 years in Fort Worth and ended up getting 8 years in federal prison for his pump and dump activities. It’s unclear if he used social media in his crimes but if he came from the SEC, chances are he’s more into porn than Twitter.
Filed under: doing it wrong
Facebook & Twitter used in stock fraud: U.S. prosecutor [Reuters]
Mark Schreiber, a former controller of fitness guru Tony Little’s business empire, has been accused of embezzling nearly $600k by forging Little’s signature. Apparently Schreiber was involved in some “online horse wagering” which must not have gone too well since he ended up…stealing money (allegedly).
According to T. Little’s lawyer, Latour “L.T.” Lafferty, the $600k is pocket change to his client but he’ll be damned if they aren’t going to pursue every means necessary to get every cent back:
“We’re certainly going to pursue any legal avenues to recover every cent that was taken from Mr. Little,” said his attorney, Latour “L.T.” Lafferty. “It doesn’t impact the financial well-being of Mr. Little. But certainly it’s a significant blow and a serious breach of Mr. Schreiber’s place as controller of his business operations.”
Since TL is a man of health and fitness and not of numbers, it’s not surprising that he’s found himself in this conundrum but he did have his suspicions:
Little realized something was amiss last year, according to court records, when he moved to fire Schreiber as a controller overseeing his Pinellas Park companies’ finances. He was dissatisfied with Schreiber, records show. He set up a July 27, 2010, meeting.
But before they could meet, Schreiber sent an e-mail: “I quit.”
After Little’s new accountant had been poking around for awhile, it was pretty obvious things weren’t kosher. They called in a forensic expert who discovered that 152 checks were drawn over 11 months to the sum of $583,379.
Right now the “degenerate gambler” motive seems to be the most plausible scenario, although it’s entirely possible that Mr Schreiber was sick with jealousy over the sexual tension between Little and his infomercial leading lady, Darla Haun. We’ve presented some footage that will likely be introduced into evidence during Schreiber’s trial:
Before you go!
Are you Looking for a fresh accounting career opportunity?
Going Concern now has thousands of open accounting jobs.
That’s not an official title but if you’ve got suggestions for someone else, please, enlighten us.
Mark Schreiber, a