BYU Radio Interview

Mark was interviewed on BYU Radio today and talked about Enron, auditing, Lance Armstrong, and other fraud-related topics.

The full show is here, with Mark's 27 minute interview starting just before the 31 minute point, or you can also listen to Mark's segment specifically here.

CBS Segment on Livestrong

Here's the video of a CBS segment where Mark was interviewed about Livestrong. The segment aired a little while ago, but this is the first time we've seen it available to view online. Mark's portion is less than half a minute starting around 6:15. Back up another 30 seconds before that to get the context of his comments.

Fraud in the Detroit Bankruptcy and the Role of Investment Banks

I read an interesting analysis of what's happening in the Detroit Bankruptcy proceedings. In a nutshell, it appears to be another case where the investment banks were able to take out millions of dollars in fees as they structured deals that ended up crippling the economy. In this case, the deals may be considered fraudulent according to this analysis. This seems to be business as usual in the investment banking world for about two decades or more.

Enron and WorldCom were frauds that were fueled by investment bankers and ended up becoming the largest bankruptcies in history. The mortgage meltdown was also fueled by investment bankers and that led to even larger bankruptcies and the world economy being brought to its knees in what is now known as the Great Recession. Now, the largest municipal bankruptcy in history also appears to have been fueled by some cleaver investment bankers who undoubtedly made out like bandits as it appears that they structured deals that gave them huge fees.

Lance Armstrong Investigation: I can't believe it's come to this....

Here we are, nearly three and a half years after Floyd Landis's first confession came out and I posted that I was 99.9% confident that pro cyclists had been doping for the past 15-20 years. I ended that first post by saying "Sadly, what would be surprising to me is if someone who is dominating pro cycling such as Alberto Contador was actually not doping!" Of course, soon after that, Alberto failed a doping test in the Tour de France and was suspended from racing.

Since that first post, there have been many posts to follow (this makes number 150 with the label of Lance Armstrong Investigation) and

Scientific Research Fraud is on the Rise--Especially in China

In accounting research, we had the first retraction in decades in the past year. Soon after the retraction, evidence was provided suggesting that the retracted article reported some very suspicious claims that were essentially impossible. The author(s) never provided a rebuttal to the claims and the author who claimed to obtain the amazing data for the article suddenly retired and is reportedly very hard (or impossible) to contact. While the retraction never stated that the article was a fraud, it all seems very suspicious...

In the harder sciences, The Economist reported this week that there has recently been a sudden uptick in fraudulent scientific research, especially in China. Here is a taste of the article:

Monitoring Matters

In a surprising development (to no one familiar with auditing or internal controls), it turns out that monitoring can actually make a difference in the way people behave!

Actually, a field study focused on monitoring and described in the NYT provides some interesting insights. While it isn't really surprising that monitoring focused on deterring theft actually deterred theft, what is less expected is that anti-theft monitoring actually increased productive efforts by employees. From the NYT article:

Fraudster gets Scammed

I always like it when I read about a fraudster who gets scammed. This reminds me of the groups who are dedicated to wasting time of the internet scammers. One group goes by ScamBaiter and another is 419 Eater. They basically waste time of scammers who send out the emails to people saying they're going to send them huge amounts of money if they will help them out. Well, I read about another scammer who got scammed today. This time, it involved a local power company in Utah. A scammer had notified a cookie company that they needed to pay their bill or their power would be turned off. You can read what happened next here....

Lance Armstrong Investigation: A Fitting Ending...

Check out this video from the Roopstigo website.

Enron CEO, Jeff Skilling, Received Shorter Jail Sentence

Various news agencies reported last week that a federal judge reduced Jeff Skilling's prison sentence by about ten years. If Skilling is found to be on good behavior and take a drug and alcohol rehabilitation course, he could be out of prison within four years. Part of the agreement is for Skilling to quit trying to get his conviction overturned. This new ruling also frees up some money from Skilling's estate that will be used to compensate victims of the fraud, including former Enron employees who lost their retirement when the company went bankrupt. Diana Peters is one of many former Enron employees who was at the latest trial and is quoted as follows:

"I pray that your decision is to give Jeff Skilling the maximum sentence for his crimes." 

Fraud always ends in a sad story as innocent victims deal with the aftermath by experiencing serious devastation, suffering and heartache. My heart goes out to these former Enron employees who had nothing to do with the crazy games Skilling, Fastow, Lay and others were playing...

Whistleblowing is Paying Off

The WSJ reported this week that the SEC has handed out it's second ever Dodd-Frank award for whistleblowing. the article says that the SEC expects more awards in the future. Here's a quote...

City Governments Committing Financial Statement Fraud

The Wall Street Journal reported recently that city governments in Pennsylvania, Florida, California, New Jersey and Illinois are increasingly being charged with financial statement fraud in their bond offerings. In the case of Harrisburg, Pennsylvania, the SEC stated that:

...this is the first time the (SEC) has "charged a municipality for misleading statements made outside of its securities disclosure documents."

According to "Anthony Figliola, a vice president at Empire Government Strategies, a Long Island-based consulting firm to local governments. 'Harrisburg is the tip of the iceberg.'"

Lance Armstrong Investigation: Betsy Andreu & Bill Bock Interviews

http://bit.ly/13f0ROw

This short video discusses some aspects of the fraud in pro cycling that was perpetuated by Lance Armstrong. Betsy Andreu and Bill Bock (USADA General Counsel) spoke at UT Austin recently and this video was produced. They speak of omertà, truth, and how one person with moral courage can make a difference. Check it out, it's worth the four minutes...

SEC to Focus more on Financial Reporting Fraud

According to the Wall Street Journal, the SEC is ready to get back to work looking for financial reporting fraud. After the mortgage meltdown, the article states that the SEC turned its attention to cases related to the financial crisis and took its eye off of fraudulent financial reporting. Interestingly, the article identifies one new tool that the SEC plans to use to identify fraudulent financial statements...

Former Enron CEO Working a Deal to Get out of Prison

Mainstream news sources are saying that Jeffrey Skilling, former Enron CEO, is working a deal to cut his prison sentence by more than a decade. The reports say that...