As luck would have it, we don't get to coast this Thanksgiving week as HP […]
Tag: Allegations
Hallburton Tax Executive’s Guys Night Out Doesn’t Go So Well
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The Deloitte Principal Who Wrote the ‘Watered-down’ Report for Standard Chartered Bank Has a Wikipedia Page
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Apparently Some People Filed Tax Returns In Their Pets’ Names
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Oh Look, the Dixon, Illinois Fraud Is Way Bigger Than Everyone Thought
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Here’s an Ominous Statement a Former Dixon City Finance Commissioner Made About Accused Embezzler Rita Crundwell
Crundwell reported to the city's finance commissioner, a member of the City Council, but the […]
Dixon, Illinois City Commissioners Beat a Dead Horse After CFO’s Arrest
Last week we learned that the CFO/comptroller/treasurer for the city of Dixon, Illinois, Rita Crundwell, […]
Somehow the City of Dixon, Illinois Just Noticed That $30 Million Was Missing
Rita Crundwell has been the CFO/comptroller of Dixon, Illinois since the 1980s; a typical tenure […]
Here’s an Unflattering Statement About Deloitte’s Auditing Ability
Courtesy of lawyers representing The Iowa Public Employees’ Retirement System, who are suing the Green Dot […]
To Catch a Deloitte Audit Manager
Weren't we just talking about child pervs the other day?! We were! Well lo-and-behold, a […]
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Employer Who Fired an Allegedly Racist Accountant (Twice) Is Allegedly Racist
Last month we learned that Virgnia Spidle, the Chief Accountant for the City of Birmingham, […]
White Collar Mafiosos (And Their CPA) Arrested For Strong-Arming Their Way To Business Ownership
A mobster, a lawyer and an accountant walk into a bar… Okay, maybe not.
Yesterday, thirteen people – including five lawyers and a Certified Public Accountant – were arrested in early morning raids in New Jersey, Florida and Texas for their part in a complicated scheme that involved taking a mortgage company by force and frittering away its assets.
Federal prosecutors say the son of imprisoned crime boss Nicodemo D. “Little Nicky” Scarfo and his associate Salvatore Pelullo took over Irving, TX mortgage company FirstPlus Financial Group, a company with plenty of cash but very little sophistication. The change in ownership was not amicable for both involved parties. According to the indictment, Pelullo told a member of the FirstPlus board that if he did not go along with the planned takeover, “your kids will be sold off as prostitutes.” Harsh. At what B-school do they teach that tactic?
The indictment goes on to allege that Pelullo wanted the company’s board to agree to give control over to his and Scarfo’s new board of directors and that he wasn’t willing to wait around for this to happen. “I don’t care if they’re in a funeral parlor, I don’t care if they’re in a [bad word] hospital on a respirator, we’ll send somebody there. I want their vote, I want their signature, and I want it done by the close of the day today,” he is alleged to have said to other individuals also charged in the scam.
Among those indicted are former FirstPlus Chief Executive Officer John Maxwell and former Chief Financial Officer William Handley. Court documents show that both individuals were placed on the board by, er, unconventional means that don’t include the desires of shareholders ifyouknowwhatI’msayin.
Fun fact: former Vice President Dan Quayle was once a FirstPlus board member. He is not mentioned in any indictments. Also, former Miami Dolphins quarterback Dan Marino used to be a shill for FirstPlus. The company filed for bankruptcy in 1999 and, according to a Chapter 11 filing from June of this year, was dormant but profitable due to a securitized pool of mortgages it expected to make a profit from for at least a decade. Ernst & Young resigned as the company’s auditor in 1999, citing, uh, irreconcilable differences but not anything to do with accounting issues or, you know, the fact that the company was basically broke.
The 25-count indictment includes charges of money laundering, bank fraud, wire fraud, mail fraud, securities fraud, extortion and obstruction of justice.
Authorities say that the (alleged) criminal masterminds took $12 million from the company in a year and spent it on multiple homes, weapons and ammo, pricey luxury vehicles, a plane, jewelry and a yacht. You know, the usual.
FirstPlus Financial Was Hit by Mob Takeover, 13 Charged, Prosecutors Say [Bloomberg]
US Attorney For NJ Alleges Mafia Crime Family Took Over FirstPlus [Dow Jones]