Update on Olympus: Potential Ties to Organized Crime

Not only is Olympus being accused of a massive financial statement fraud, the latest revelations suggest that the financial statement fraud involved companies with links to organized fraud.  According to the NYT:

Olympus is Accused of Massive Financial Statement Fraud

The camera and electronics company, Olympus, is being reported to have engaged in a massive financial statement fraud. Reports are pretty ambiguous right now but this could be one of the largest financial reporting frauds we've seen in a long time. Here are some excerpts from the NY Times article today:

A New Madoff Interview

60 Minutes Overtime aired a video recently of an interview with Ruth and Andrew Madoff discussing such things as the decision and process of turning Bernie in to the authorities, etc. Andrew and his mother also talk about Bernie and Ruth's failed effort to commit suicide. Crazy stuff for sure...Check it out here.

A Potentially Costly Combination: Deloitte, Taylor Bean and the PCAOB

If you follow news affecting auditors, you may have noticed that the PCAOB made a very rare disclosure yesterday about one of the big four firms, Deloitte. The PCAOB said that Deloitte was previously sanctioned for not being skeptical enough to challenge statements made by management and that they still have problems with this.

Normally, the PCAOB tells the big audit firms what they did wrong and gives them a year to fix it with the threat that they will disclose their failures after a year if the firm doesn't fix it. Well, they decided Deloitte was still dropping this ball so they disclosed it publicly. Importantly, the timing of this ball dropping may have been very detrimental to Deloitte. Here is why...

Widow of Mark Madoff Talks

ABC News has an article about Mark Madoff's widow, Stephanie Madoff Mack, and her view of what Bernie did to her. Here are a few quotes I found interesting:

Fraud in Amateur Sports

Photo taken from KTLA.com

So, I was appalled to read about a marathon runner who caught a bus over the last six miles of the race and then waited until the 1st and 2nd place racers passed him before taking 3rd place with a personal record! I can just see this guy bragging about his PR to his friends at work! In my book, he's a bigger loser than the last place finisher who followed the rules. It gives a whole new meaning to the phrase "The biggest loser!"

Avoiding Consumer Fraud [Guest Post]

“You’ve just won $10,000! Act now! This opportunity won’t last long!” Every day, millions of consumers run into ploys like this one, and some of these people fall victim to the scam. Americans lose hundreds of billions of dollars to consumer fraud every year.

Victims of mass market fraud could potentially lose their life savings and/or have the need to file for bankruptcy. Con artists can find these innocent people through the internet, by telephone, email, and even post mail. People easily get tricked into trusting these scams and give out money or their very valuable personal information.

What is Consumer Fraud?

Madoff and the SEC: Serious Conflicts Existed

The NY Times recently discussed the results of a report on the SEC showing that a lawyer with heavy involvement in the Madoff case had serious conflicts of interest. Here are a few key quotes from the article:

Lance Armstrong Investigation: Money Trails and Ferraris

I apologize for being so slow to comment on this news but last week I was taken out of commission by a long-boarder who ran into me while riding my bike. I ended up with a broken arm, broken rib and broken bike frame, not to mention a lot of road rash and a concussion. I was unconscious for about ten minutes, or so they say. But, enough of the excuses. What do I make of this news about Lance and Michele Ferrari? Here is my take:

Deloitte and Taylor Bean: Real Money is on the Line

Another of the Big 4 is being sued regarding their audit of a firm that was allegedly committing serious fraud during the mortgage meltdown, Taylor Bean. Here is an excerpt from an article on Bloomberg which describes the lawsuit involving Deloitte:

The Cost of Loss [Guest Post]

Fraud affects everyone. According to a recent survey, US businesses lose an estimated $400 billion due to fraud each year. The Association of Certified Fraud Examiners found that one in four employees commits fraud at some point in their careers, and a quarter of those employees worked for their employer for more than ten years! Every industry feels the loss associated with fraud, and the public often foots the bill. Despite the best efforts of auditors and accountants to detect fraud, the losses remain steady from year to year. As a question of forensic psychology, what motivates loyal and otherwise trustworthy people to take dishonest advantage of employers? Regardless of individual circumstances, we find surprisingly similar motives and means.

Rouge Traders and Double Standards

You may have seen the recent news of a rouge trader at UBS whose trading activity led to a $2 billion loss for the company.  In a recent blog post, the WSJ highlights what may be a double standard in unauthorized trades:

Ernst & Young and Lehman Case is Still Cooking

Fox News published a short article about litigation involving Lehman and its executives and mentioned that the lawsuit against EY is still progressing. The article says that testimony may be recorded in the near future about the motivation for Lehman's extensive use of Repo 105 transactions. Here are a few quotes:

Madoff Claims He's Teaching at Harvard

It sounds like Bernie Madoff is telling stories again. According to this short article on Fox, Bernie said: