Going Concern

IRS Agent Threatens to Kill Treasury Agents Then Throws a Conniption Fit

Caleb Newquist
July 21, 2009

Perhaps buckling under the mere thought of looking through 52,000 different UBS accounts for tax evasion, an IRS Agent in Valencia, CA threatened Treasury Agents with “I’m going to kill all of you!” when they attempted to search his home.

When the agents tried to serve the warrant, Bront tried to rush back inside his home, where he kept three loaded guns, but a Treasury agent aimed a gun at him and another drew out a baton. After his arrest, he kicked the front seat of the law enforcement vehicle and pounded the door with his elbow before telling the agents he didn’t mean it when he threatened to kill them.

Not withstanding the seriousness of threatening federal officers, the image of a 49 year old man kicking the front seat of a car like a child that didn’t get any ice cream is almost too much for us to bear.

IRS Agent: ‘I’m Going to Kill All of You!’ [Web CPA via TaxProf Blog]

Big 4

Ernst & Young Is Here to Help (For a Small Fee)!

Caleb Newquist
July 20, 2009

We thought that Ernst & Young was advising the New York Fed on the winding down of AIG out of the goodness of their hearts but it turns out it’s actually about the money.
E&Y could make as much as $60 million advising the New York Fed, which is 50% more than the initial agreement, according to Bloomberg. The NYF is also reimbursing E&Y for expenses, up to 10% of the professional fees. This occurs after the parties had initially said $40 million would be the cap but $60 mil is it, we swear, no more.
And because E&Y is solid like that, the firm is billing out partners and directors at discounted rates ($775/hour). I mean, ’cause, let’s face it, this thing’s a mess and E&Y is going to be working hard, working late, working weekends.
Ernst & Young’s Maximum Pay for AIG Advice Swells [Bloomberg]

Fraud

SHOCKER: Number of Fraud Cases in the Courts is High

Caleb Newquist
July 20, 2009

In probably the most shocking news of the day, KPMG’s “fraud barometer” reports that the number of fraud cases in UK courts in the first six months of the year are the highest since the firm started issuing the report, 21 years ago.
Here in the states, the big sexy fraud gets all the attention but there is plenty of small fraud to go around. Plus, the bright side is, we’ve haven’t seen anything yet:

“These figures are bad, but the worst is yet to come,” Hitesh Patel, a partner at KPMG, said. “It will be a number of years before the impact of the recession fully feeds through into the fraud statistics.”

So our advice would be for any of you that are nervous about layoffs, look into getting transferred to the forensic accounting practice. You won’t be out of work any time soon.
Record total of fraud cases in court – and worse to come [FT.com]

Uncategorized

Madoff Already has Respect in Prison and He Hasn’t Even Gotten Started

Caleb Newquist
July 20, 2009

Whenever you’re the new guy, things can be awkward for awhile. Not for Bernie Madoff. The Master de Ponz has been in prison for less than a month and the guy is thriving already:

Some of his fellow inmates, in fact, respect him for being a stand-up guy who pleaded guilty without implicating any of the other people strongly suspected of helping him pull off the fraud that swindled more than 1,000 people out of more than $65 billion over two decades. “He got a lot of respect from other inmates because he didn’t tell on anybody, he didn’t take everybody down with him,” the source said.

That’s right people, RESPECT.
The Post, never short on the melodramatic, is focusing on the inmates that are looking to slap around ole Bern to get themselves a little respect. We don’t buy it. Anyone looking to rough him up will have a change of heart as soon as they hear about the outstanding year over year double-digit returns he’ll get you on those Lucky Strikes.
UPDATE, 3:37 PM: A guy sometimes gets a little distracted from personal appearance when he’s being trucked around. Check out DealBreaker for Bess Levin’s take on Butner’s new Mr. Popular.
BERNIE IN THUGS’ SIGHTS [New York Post]

Uncategorized

The Summer Corporate Outing: Be Bold!

Caleb Newquist
July 20, 2009

Since it’s summer, it’s inevitable that many of you will receive the an invitation to a company pool party, BBQ, ball game, etc. For many accountants, fashion is an afterthought at the office. Blue shirt or white shirt today? Black trousers or khakis? Not a terribly fashion forward bunch. In fact, we might go so far to say, fashion Neanderthals.
However, when an event outside of the office occurs, the need for non-work attire arises. Some bean counters will still don trousers and button-ups because well, they’re lame. For the more free-spirited among us, this is the opportunity to cut loose.
The Journal has a stuffy piece about what’s “appropriate” at these corporate outings. We here at Going Concern want you to ignore social conventions and go with your gut when preparing for these summer corporate get-togethers.
Do you look fab in a super-tiny speedo? We say ROCK IT! Looking to wear a t-shirt from your favorite strip club? Wear it PROUD! Been waiting for the perfect opportunity to wear that new skirt that shows off those fantastic gams? We’re ALL FOR IT!
The Journal is concerned about “knowing” your co-workers too well and their inability to get that image of you in your velour tracksuit out their heads. We say, GET YOURSELF OUT THERE! Life is far too short to be held down by fashion impotent bean counters who can’t pull off tight leather shorts.
Overexposed: Surviving The Corporate Outing [WSJ]

Clinton to Meet Swiss Minister, Discuss Friendship, Possibly Chocolate

Caleb Newquist
July 20, 2009

The whole UBS/IRS tug of war has achieved a whole new level of ridiculousness because now, Secretary of State Hillary Clinton will meet with the Swiss Foreign Minister on July 31, just prior to the deadline settlement date of August 3rd.
We’re expecting a lovely exchange of smiling, glad-handing, back-slapping, etc. but would implore with Secretary Clinton to do the right thing and get the Swiss Minister to pony up the Toblerones.
The Swiss deserve part of this blame for not seeing the genius in this offer but our American representatives in this case have not been pushing for it, deciding instead, that our need for a reformed healthcare system should motivate our Swiss friends to turn over the 52,000 American names.
The Swiss, who no doubt laugh at our bureaucratic nightmare of a healthcare system, are instead more concerned about their sovereignty and their long tradition of client confidentiality. They have vowed not to turn over any names and this doesn’t really fit in with the IRS’s plans to get billions in back taxes on the UBS accounts, hence the need to call in the big guns.
Swiss minister to meet Clinton ahead of UBS deadline [Reuters]

IRS Getting Back to Scaring People into Tax Compliance

Caleb Newquist
July 20, 2009

If you’ve got a offshore bank account and are less than with it when it comes to tax compliance, it might be advisable that you talk to your accountant.
The IRS, who is becoming increasingly less cuddly under the Obama Administration, is stepping up its scrutiny of Americans with income derived from offshore accounts greater than $10,000.
However, because the Service doesn’t want to come off as a big meanie, it is giving everyone late to the game until September 23rd to file their Foreign Bank Account Report (FBAR). If you’re the type that doesn’t concern yourself with such matters, here are some things you can look forward to:

Those who have inadvertently failed to report offshore income, even just a few hundred dollars, could be subject to a $10,000-a-year penalty going back several years. For those the IRS considers willful tax evaders, it is much worse. The IRS can impose a penalty of $100,000, or one half the value of the account, whichever is greater, per year.

Those of you that have been scofflaws on your offshore accounts, don’t fret. The IRS is allowing to confess your sins and report yourselves under their “voluntary disclosure program”. However, you will still have to be investigated by the Service’s criminal division which sounds about as pleasant as a rectal exam in front of all your friends.
IRS Gets Tougher on Offshore Tax Evaders [WSJ]

Scoping

Scoping | 07.20.09

Caleb Newquist
July 20, 2009

• CIT Is Said to Obtain Urgent Loan to Prevent Bankruptcy – “Directors of the CIT Group, one of the nation’s leading lenders to small and midsize businesses, approved a deal Sunday evening with some of the bank’s major bondholders to help it avert a bankruptcy filing through a $3 billion emergency loan, according to people briefed on the matter.” Bullet dodged. [New York Times]
• Scam victims ‘easily persuaded’ – “The scams the OFT has been highlighting range from the so-called Nigerian or advance free frauds, to bogus lotteries, fake clairvoyants and health cures, bogus investments and crooked racing tipsters.” Nigerian emails do have a certain charming prose that is difficult to resist. [BBC]
• Sweden’s SEB bank posts 2Q loss – No doubt had some exposure to the Latvian souls brokers [AP via Miami Herald]
• Charles Schwab denies Cuomo’s fraud allegations – “Charles Schwab Corp, the largest U.S. online brokerage, denied allegations by New York Attorney General Andrew Cuomo of civil fraud in its marketing and sale of Auction Rate Securities (ARS).” Also, some less serious charges include running commercials with creepy half-human, half-cartoons moving and talking seriously about their depleted 401(k)s. [Reuters]
• Evidence shows there’s no such thing as ‘recession-proof’ jobs – Bankruptcy lawyers might be the lone exception. Good luck getting into that. [Chicago Tribune]

Review Comments

Review Comments | 07.17.09

Caleb Newquist
July 18, 2009

• Swedbank Losses Show Deeper Troubles in Baltic – Souls as collateral in Latvia. Enough said. [DealBook]
• Citibank, BofA Results May Not Point To Recovery – Duh. [NPR]
• Fox Biz: Jorge Posada’s Wife Talks Healthcare Reform – Much more interesting perspective than say, anyone in DC [Clusterstock]

Microsoft and Yahoo Return to Shamelessly Flirting in Front of Everyone

Caleb Newquist
July 18, 2009

In rumored merger talk news, apparently Microsoft and Yahoo have started playing footsie again which annoys the living crap out of us. According to Bits Blog:

A handful of top Microsoft executives are in Silicon Valley meeting with their Yahoo counterparts to try to iron out remaining wrinkles in a proposed partnership, according to people briefed on the talks who agreed to speak on condition of anonymity because the negotiations are confidential.

Get it over with you two! T. Boone Pickens isn’t cock-blocking anymore so you don’t have any excuses. We’d all really prefer if you just got down to biznass instead of flirting in front of everyone and then saying that you’re not interested in each other. Nobody is buying it.
Yahoo and Microsoft Said to Be Closer to Search Deal [Bits via DealBook]

SEC Suit on Billionaire Man-Child Tossed

Caleb Newquist
July 17, 2009

Nice try losers.
In what has to be an especially shameful blow to the SEC’s confidence, a Dallas judge has tossed the civil-insider trading lawsuit against Mark Cuban.
As much as we would like to see Cuban squirm, the Judge basically told the SEC they got nada. The SEC, re-thinking its career choice, did not immediately return calls for comment.
Judge Dismisses SEC Insider-Trading Case Against Mark Cuban [WSJ]

Scoping

Scoping | 07.17.09

Caleb Newquist
July 17, 2009

• What’s email? – Paulson doesn’t use it, thanks for asking. Next question. [FT Alphaville]
• Bank of America Posts a Profit on Trading Gains – “Bank of America, one of the nation’s largest and most troubled banks, announced on Friday a $3.2 billion second-quarter profit, a figure that exceeded analyst expectations.” Ken Lewis will be starting happy hour a little earlier than usual on this Friday. Circa now. [New York Times]
• Citigroup profit soars on Smith Barney sale – “Citi’s profit was not driven by improved trading like other banks, and instead came from the gain on the sale of its Smith Barney unit and the increasing values of some of its riskier assets that had plunged during the credit crisis. The New York-based bank recorded an after-tax gain of $6.7 billion on the sale of a majority stake in its Smith Barney brokerage unit to Morgan Stanley.” Selling profitable assets usually ends up looking good. This should not be surprising. [AP via Miami Herald]

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