Friday, July 17, 2009

Catching Up

I know what everyone must have been thinking over the past few days: the Zimbelmans must have been busted for running a ponzi scheme and it hasn't been in the news because it has been overshadowed by the Madoff and Stanford frauds...

Actually, although some have suggested that either my dad or I commit fraud to give our blog more credibility (see Sam Antar or Barry Minkow), neither of us are quite ready to take that step.

During our 10 day hiatus, the fraud world has kept busy. A few interesting stories:

1. An elaborate scheme to defraud state auditors and other vendors is unraveling (source):
North Carolina records show that "Christina Ann Clay" set up three corporations on Jan. 6: Deloite Consulting, Unisyss Corp. and Acenture Corp. The Clay identity was employed again March 16 to register a fourth name, Electronic Data System Corp.

Each name is similar to that of legitimate companies that West Virginia has done business with, to the tune of $202 million since the 1990s, the auditor's records show.

West Virginia isn't the only state to be hit by this scheme--the scammers are also being investigated in Utah and may have defrauded numerous other states. Looks like an epidemic of poor internal controls.

2. Madoff's auditor pleads not guilty

3. Stanford is still complaining about having to account for his assets before the judge will release funds to pay for his defense. Stanford claims that such an accounting would violate his Fifth Amendment privilege against self-incrimination. Sounds pretty sketchy to me...

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