Category: Fraud

Tax Deduction Available for Ponzi Scheme Related Theft

The current tax season brings some small consolation to victims of Ponzi schemes and certain other financial fraud, with the Internal Revenue Service (“IRS”) allowing duped investors to obtain partial relief in the form of a theft loss tax deduction.  Internal Revenue Code (“IRC”) 165(a) provides that a theft loss incurred in a transaction entered …

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Permanent link to this article: http://betweenthenumbers.net/2018/03/tax-deduction-available-for-ponzi-scheme-related-theft/

HBO Executive Admits $1 Million Fake Vendor Fraud

A former talent relations executive at HBO has admitted to diverting nearly $1 million in production funds to a fake company she created.  The type of fraudulent billing scheme using a shell company can be accomplished with nothing more than a fictitious name and a payment destination.  In this case, the executive used the name …

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Permanent link to this article: http://betweenthenumbers.net/2016/02/hbo-executive-admits-1-million-fake-vendor-fraud/

$26 Million Settlement to Hollywood Filmmakers Over Home Video Royalties

The $26 million settlement between Universal City Studios and a class of Hollywood filmmakers has been tentatively approved.  The filmmakers believed they had been underpaid based on miscalculated royalties associated with profits from home-video sales. Unfortunately underpayment of royalties is all too common and many fail to properly manage their agreements.  One critical tool against …

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Permanent link to this article: http://betweenthenumbers.net/2015/08/26-million-settlement-to-hollywood-filmmakers-over-home-video-royalties/

Another Whistleblower Gets Multi-Millions

The Securities & Exchange Commission (“SEC”) has announced an approximately $3 million whistleblower award to an unnamed company insider who provided information to the SEC regarding a complex fraud that would otherwise been difficult to uncover. Whistleblowers who provide the SEC such information are eligible for awards of 10 to 30 percent of the money …

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Permanent link to this article: http://betweenthenumbers.net/2015/07/another-whistleblower-gets-multi-millions/

Ninth Circuit Invites More Qui Tam Cases

The US Court of Appeals for the Ninth Circuit has opened the door significantly wider for those who wish to pursue qui tam False Claims Act suits by reversing a dismissal of two such matters.  Ruling en banc in United States ex rel. Hartpence v. Kinetic Concepts, Inc., the Ninth Circuit has removed a prior …

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SEC Utilizes Big Data And Statistics To Target Trading Fraud

The Securities and Exchange Commission recently announced its first fraud charges derived from tracking behavior using data analytics of large volumes of investment advisors’ trade allocation detail.  The enforcement target is Welhouse & Associates Inc. and its owner Mark P. Welhouse. Mr. Welhouse is accused of “cherry-picking”, a practice whereby one improperly allocates option trades …

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Permanent link to this article: http://betweenthenumbers.net/2015/07/sec-utilizes-big-data-and-statistics-to-target-trading-fraud/

Canada Audits Dubious Senator Expenses At Great Cost

The recently released report by the Canadian Auditor General details numerous incidents of inappropriate spending by members of the Canadian Senate. The report investigated 116 current and former senators and 80,000 expense items totaling CAD $45,000,000 over a period from April 1, 2011 to March 31, 2013. 30 of the senators under investigation were found …

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Permanent link to this article: http://betweenthenumbers.net/2015/06/canada-audits-dubious-senator-expenses-at-great-cost/

Investors Accuse Ernst & Young Accused of Being Complicit in Bribery Scandal

CtW Investments Group (“CtW”), which represents a group of minority shareholders in Wal-Mart, has accused the firm’s external auditor Ernst & Young (“E&Y) of having had early knowledge of Wal-Mart’s violation of the Foreign Corrupt Practices Act related to bribery allegations in Mexico. In a letter to the Public Accounting Oversight Board, CtW reports that …

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Permanent link to this article: http://betweenthenumbers.net/2015/06/investors-accuse-ernst-young-accused-of-being-complicit-in-bribery-scandal/

The Cancer Fund of America and Its Related Charities Are Called a Fraud

An alleged fraud was recently uncovered at The Cancer Fund of America and its related entities, including The Breast Cancer Society and The Children’s Cancer Fund of America. James Reynolds and his family members are believed to have stolen $187 million from donors in these charities over five years and spent the monies on lavish …

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Permanent link to this article: http://betweenthenumbers.net/2015/05/the-cancer-fund-of-america-and-its-related-charities-are-called-a-fraud/

Investors Allegedly Defrauded by ITT Technical Institute Executives

On Tuesday May 12, 2015 the Securities and Exchange Commission (“SEC”) charged the CEO and CFO of ITT Educational Services Inc. (NYSE: ESI) with fraud.  The company which runs a popular nationwide chain of for-profit technical colleges under the name ITT Technical Institute (“ITT Tech”) allegedly defrauded investors by materially misstating the financial performance of …

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