Bob Jensen's Enron Quiz (and answers) --- http://faculty.trinity.edu/rjensen/FraudEnronQuiz.htm

Office Depot Agrees to Pay $25 Million to FTC Over Scam Involving Computer Repair Service ---
https://gizmodo.com/office-depot-agrees-to-pay-25-million-to-ftc-over-scam-1833655854

Boston Woman Sentenced for $2.7M Bank Fraud Scheme ---
https://www.justice.gov/usao-ma/pr/boston-woman-sentenced-27-million-bank-fraud-scheme

Chicago Corruption as Usual:  The consummate political insider linked to the burgeoning City Hall corruption probe ---
https://www.statedatalab.org/news/detail/the-consummate-political-insider-linked-to-the-burgeoning-city-hall-corruption-probe

The undeniable corruption of Chicago and Illinois: Unpaid vendors program ---
https://www.statedatalab.org/news/detail/the-undeniable-corruption-of-chicago-and-illinois-unpaid-vendors-program

What Rhode Island can teach us about pension plunder ---
https://forwardky.com/what-rhode-island-can-teach-us-about-pension-plunder/

AICPA quiz on combating contract and procurement fraud ---
https://www.journalofaccountancy.com/issues/2019/feb/contract-and-procurement-fraud.html?utm_source=mnl:cpald&utm_medium=email&utm_campaign=18Feb2019

Even British Airways and Philips stand to lose money in India's biggest financial scandal of 2018 ---
https://www.businessinsider.com/philips-and-ba-to-lose-money-in-indias-biggest-debt-scandal-of-2018-2019-3

From the CFO Journal's Morning Ledger on March 21, 2019

A Lithuanian man pleaded guilty to his role in a complex wire fraud scheme that resulted in the theft of more than $100 million from Alphabet Inc.’s Google and Facebook Inc., prosecutors said Wednesday.

Books about the biggest business scams of our time — including Enron, Bernie Madoff, and Theranos ---
https://www.businessinsider.com/business-books-about-fraud-scandal

Bob Jensen's Fraud Updates ---
http://faculty.trinity.edu/rjensen/FraudUpdates.htm

NPR:  New York City will reimburse the Federal Emergency Management Agency $5.3 million after defrauding the agency in the aftermath of 2012’s Hurricane Sandy ---
https://www.npr.org/2019/02/21/696517319/new-york-city-admits-defrauding-fema-out-of-millions-after-superstorm-sandy
For example, many vehicles reported damaged by the storm really were damaged before the storm.

Where has $850m gone? NYC Mayor Bill de Blasio's wife can't account for staggering amount of taxpayer money...
http://www.freerepublic.com/focus/f-news/3731505/posts
Jensen Question
Why did she get this money in the first place?

Kraft Heinz shares took a dive after it revealed Securities and Exchange Commission subpoena over its accounting practices ---
https://www.businessinsider.com/kraft-heinz-shares-drop-subpoena-securities-exchange-commission-2019-2

March Madness of Another Kind
The Duke University data fabrication case has now settled for a “substantial” sum of $112.5 million. That means the whistleblower, another former lab tech, will earn more than $30 million ---
 https://retractionwatch.com/2019/03/25/duke-settles-case-alleging-data-doctoring-for-112-5-million/#more-88845

Bob Jensen's threads on professors who cheat ---
http://faculty.trinity.edu/rjensen/Plagiarism.htm#ProfessorsWhoPlagiarize

NYT:  Former Missouri Professor Stole Student’s Research to Sell New Drug, Lawsuit Alleges ---
https://www.nytimes.com/2019/03/01/us/university-missouri-cequa-lawsuit.html
Thank you Elliot Kamlet for the heads up

You can now grab a fancy cocktail at the Boston Public Library ---
https://www.bostonglobe.com/lifestyle/food-dining/2019/03/19/you-can-now-grab-fancy-cocktail-boston-public-library/ODO2Jg7MC0umgSGtHvdKPL/story.html

Jensen Comment
Many colleges now have pubs on campus (usually restricted to beer and wine).
Are any of these pubs in liabraries?

Michael Avenatt --- https://en.wikipedia.org/wiki/Michael_Avenatti

Michael Avenatti Has Been Charged With Trying to Extort Nike. ---
Click Here

From the CFO Journal's Morning Ledger on February 21, 2019

U.S. securities regulators have joined a long list of authorities investigating Danish lender Danske Bank AS over a massive money-laundering scandal at its Estonian branch.

Four Nordic countries are among seven countries with the lowest level of public-sector corruption, according to a report. The USA plummeted out of the top 20.---
https://www.fm-magazine.com/news/2019/feb/countries-with-cleanest-reputations-201920564.html?utm_source=mnl:cpald&utm_medium=email&utm_campaign=18Feb2019

Accounting firms are vulnerable to whaling scams, where cybercriminals impersonate a senior executive. ---
https://www.intheblack.com/articles/2019/02/12/tips-to-foil-whaling-scam

Ex-Walmart exec says theft helped kill Walmart's cashierless checkout technology ---
https://www.businessinsider.com/ex-walmart-exec-says-theft-helped-kill-walmarts-cashierless-tech-2019-2

. . .

"You think that the theft is bad on self-checkouts? Wait until you try Scan & Go, where nobody is watching the customers out in the aisles," said Joel Larson, a former Walmart senior manager who led Scan & Go as the head of checkout innovation before leaving the company in October.

Walmart representatives have previously discussed the decision to end the program and cited problems such as low customer-adoption rates and various errors.

"We found too many errors in the process ... making sure people were scanning things right, multiple quantities, that sort of thing," Walmart chief technology officer Jeremy King said during a conference last month.

Continued in article

Bob Jensen's Fraud Updates ---
http://faculty.trinity.edu/rjensen/FraudUpdates.htm

From the CFO Journal's Morning Ledger on February 20, 2019

McKinsey & Co. agreed to pay $15 million to settle U.S. Justice Department allegations that the large consulting firm failed to make required disclosures of potential conflicts in three chapter 11 cases it had advised on in recent years.

Some CEOs are profiting from releasing more negative news releases leading up to their executive stock option grant date, according to new research from the University of Notre Dame.

The move depresses the stock price and lowers the guaranteed "strike price," which allows the CEO to exercise their stock option to buy a specified number of shares below market value. Should the stock price go up, the executive can then sell the shares at market price and keep the difference as profit.

"Unintended Consequences: Information Releases and CEO Stock Option Grants," forthcoming in the Academy of Management Journal by Tim Hubbard, assistant professor of management in Notre Dame's Mendoza College of Business, finds that the stock prices are significantly lower than expected during these periods, leading to major gains for CEOs—between $143,500 and $839,000, depending on the assumptions.

The study looked at option grants of U.S. publicly traded companies from 2009 to 2013, examining the cumulative abnormal returns before option grant dates. The researchers collected all news releases from each firm during the period and used this data to understand whether firms release more negative news releases in this time frame and the type of negative news.

How to compensate CEOs in a way that encourages them to act in the best interest of their firms has been the topic of much research and regulation. Still, problems remain. For example, the options backdating scandal, with cases first emerging in 2006, ensnared dozens of executives over allegations that the dates of stock-option awards had been manipulated to enrich recipients.

There were regulation changes in the wake of the scandal, though Hubbard says some CEOs continue trying to manipulate the system.

"Incentive contracts are supposed to push an executive to increase the share price for stockholders," Hubbard says. "However, stock options have a unique period right before the grant date where CEOs are encouraged to lower their firm's share price—this is the action that will create the most value for them personally. When we examine which CEOs are most likely to try to use this mechanism to lower their stock price, we see that CEOs that are underpaid compared to their peers and those with significant discretion are more likely to release negative news during the period before the grant date, which lowers the stock price."

The study points to a key example from 2011 and 2012—years after the options backdating scandal and a decade after the passage of the Sarbanes-Oxley Act of 2002, which was enacted in response to a series of high-profile financial scandals including Enron and WorldCom in an effort to improve corporate governance and accountability.

"The CEO of a large logistics firm received options on nearly 200,000 shares," Hubbard says. "One month earlier, the stock traded about 5 percent higher than on the grant date. A month after, the stock price returned to pre-grant levels. The same pattern occurred the prior year even though the stock price shifted little during that year.

Continued article

YouTube’s copyright strikes have become a tool for extortion ---
https://www.theverge.com/2019/2/11/18220032/youtube-copystrike-blackmail-three-strikes-copyright-violation

February 17, 2019 Retraction Watch Weekend Scandal News ---
https://retractionwatch.com/2019/02/16/weekend-reads-article-retracted-because-of-racial-characterizations-indias-high-retraction-rate-meet-the-fraud-finder/
Harvard should be embarrassed over Jill Abramson's plagiarisms
Why are students expelled for cheating but not faculty?
Remember the 60+ Harvard students expelled for plagiarizing a homework assignment in a political science course?
http://faculty.trinity.edu/rjensen/Plagiarism.htm#UVA

February 17, 2019 reply from our Marine Corps Captain on the AECM

I’ve summarized a series of articles in usmnews.net that address why students are punished for alleged “plagiarism" and faculty who are proven guilty of plagiarism are not disciplined. Of course, conflicts of interest and money—business faculty and administrator pay—are more than bit players. See, “Or Just Plain Dumb. (Are AACSB and University Administrators Trustworthy, Miscreant Authorities, Or Just Plain Dumb.)” https://www.amazon.com/Just-Plain-Dumb-Administrators-Trustworthy-ebook/dp/B07LGDZ3T2/ref=sr_1_1?ie=UTF8&qid=1550419331&sr=8-1&keywords=%22Or+just+plain+dumb%22

The book is not just about the several schools cited. It’s about all schools that are AACSB accredited.

Marc

From the CFO Journal's Morning Ledger on February 26, 2019

German health-care firm Fresenius Medical Care AG said in a regulatory filing that it had reached an agreement in principle with U.S. authorities regarding a long-running foreign-bribery investigation that involved an anonymous whistleblower complaint.

From the CFO Journal's Morning Ledger on February 28, 2019

Biopharmaceutical company Syneos Health Inc. on Wednesday said U.S. securities regulators are investigating its accounting policies and delayed the release of its fourth-quarter and year-end earnings.

Shares of the Nasdaq-listed company, which had closed up 0.8% before the announcement and were then paused, tumbled more than 27% to $37.75 when after-hours trading resumed. Those losses come after Syneos Health shares fell about 7% in Tuesday’s trading.

The Securities and Exchange Commission notified the Morrisville, N.C., company on Feb. 21 that it had launched an investigation into its revenue accounting policies, internal controls and related matters, Syneos said. The company said it is cooperating with the SEC.

Reports of elder financial exploitation have increased ---
Financial elder fraud reports quadruple; amount reaches $1.7 billion
https://www.mcknightsseniorliving.com/home/news/financial-elder-fraud-reports-quadruple-amount-reaches-1-7-billion/

Current and past editions of Bob Jensen's blog called Fraud Updates --- http://faculty.trinity.edu/rjensen/FraudUpdates.htm

How to Mislead With "Unvetted" Forecasts/Predictions

Elon Musk --- https://en.wikipedia.org/wiki/Elon_Musk

The Securities and Exchange Commission says an "unvetted" tweet Elon Musk sent in February claiming that Tesla would produce 500,000 vehicles in 2019 was a "blatant violation" of a court settlement between himself, Tesla, and the agency ---
https://www.businessinsider.com/sec-responds-to-elon-musk-in-contempt-of-court-claim-2019-3

·         The Securities and Exchange Commission says a tweet Elon Musk sent in February claiming that Tesla would produce 500,000 vehicles in 2019 was a "blatant violation" of a court settlement between himself, Tesla, and the agency.
 

·         Among other things, that settlement requires Tesla to appoint a "Twitter czar" who vets Musk's tweets for information material to Tesla before publishing.
 

·         The SEC, citing Musk's own words, accuses him of not doing that and says "there was never any good faith effort to comply with the Court's order."
 

·         Musk's lawyers criticized the SEC's latest filing on Monday, accusing the agency of making new allegations against the Tesla CEO.

Continued in article

Jensen Comment
Musk keeps trying to manipulate Tesla's stock and bond market prices with dubious forecasts (although in its best week Tesla did produce 7,000 vehicles before laying off workers to reduce expenses).
It's not so much that 500,000 per year is entirely unreachable. The issue is that Musk agreed in court to have such predictions "vetted" before making them public.
This is no longer limited to a dispute between the SEC and Elon Musk. It's now a contempt of court violation --- which is a much more scary violation for Musk to face up to in court.

Ironically, no enforcement agency requires that President Trump's tweets be vetted, although the national media seems to have taken on that job.
Trump and Musk seem to be in competition to see how long tweeted lies will be tolerated --- by voters (in the case of Trump) and by investors (in the case of Musk).
The SEC's mandate is to protect investors from fraud and market manipulations.

How 2 filmmakers got FBI agents to reveal the details of a $24 million McDonald's Monopoly game fraud scheme run by the Mafia ---
https://www.businessinsider.com/how-hbo-mcmillions-got-fbi-to-talk-mcdonalds-monopoly-fraud-2020-1

The McDonald's Monopoly game was hugely popular in the late 1980s and through the 1990s.

You would walk into a McDonald's and, with your purchase, there would come a Monopoly game piece stuck to your soda or meal that, if you got really lucky, would reveal you won prizes like a new car, $100,000, even $1 million.

And people actually won. McDonald's even did a commercial showing some of the winners back in 1995.

But it turns out many of the people who handed in the $1 million and other big cash pieces didn't get them from buying fries at their local McDonald's. For over a decade, $24 million was stolen from the company by people who fraudulently played the Monopoly game.

It turns out the mob had obtained possession of McDonald's Monopoly big game pieces unbeknownst to the fast-food chain. It was finally revealed when an anonymous tip sent to the FBI offices in Jacksonville, Florida was looked into in the early 2000s.

HBO's six-part documentary series, "McMillions" (debuting Monday), uncovers how it all went down with shocking (and often hilarious) details from FBI agents, McDonald's executives, and some of the people who were in on the scam that was concocted by someone only known as "Uncle Jerry."

It's a too-good-to-be-true story that even its filmmakers, James Lee Hernandez and Brian Lazarte, still can't believe really happened.

 It all began with some late-night reading on Reddit

In 2012, Hernandez was randomly scrolling through Reddit before going to bed one night when he came across a "Today I Learned" he found surprising: "TIL: Nobody ever really won the McDonald's Monopoly game."

Clicking the link that accompanied the factoid didn't give him much satisfaction, as it was a brief story that didn't give many details as to what happened. And a further search around the internet also didn't bear any fruit.

"In this day and age, if you can't find out every single detail about something on the internet it's mind blowing," Hernandez told Business Insider over the phone alongside Lazarte from the Sundance Film Festival, where the first three episodes of their series got their world premiere.

For a documentary filmmaker, the lack of information out there on a topic like this just begs to be made into a movie. And it began Hernandez's obsession with the Monopoly scandal.

At the time, Hernandez was making a living working behind the camera on TV, commercials, and making branded content, so during any free time he would fall back into the rabbit hole and search for any kind of leads to how the Monopoly game was compromised. He even put in a Freedom of Information Act request to obtain court records of what was uncovered in the FBI's investigation. Hernandez said it took over three years to finally get that information. But when he did, he received a treasure trove of insight.

Continued in article