Accounting Scandal Updates and Other Fraud Between April 1 and June 30, 2018
Bob Jensen at
Trinity University

Bob Jensen's Main Fraud Document --- http://faculty.trinity.edu/rjensen/fraud.htm 

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

Bob Jensen's Enron Updates are at --- http://faculty.trinity.edu/rjensen/FraudEnron.htm#EnronUpdates 

Other Documents

 

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

My Latest Web Document
Over 400 Examples of Critical Thinking and Illustrations of How to Mislead With Statistics --
-
http://faculty.trinity.edu/rjensen/MisleadWithStatistics.htm




The Justice Department on Thursday announced charges against 601 people, including 76 physicians, for allegedly taking part in multi-billion-dollar profit-making schemes involving opioid painkillers ---
https://www.cbsnews.com/news/national-health-care-fraud-crackdown-largest-jeff-sessions-opioid-today-2018-06-28/

The arrests come as the result of what the department called the largest heath care fraud takedown ever in the U.S., with Attorney General Jeff Sessions calling the crimes "despicable" in a statement.

"In many cases, doctors, nurses and pharmacists take advantage of people suffering from drug addiction in order to line their pockets," Sessions stated.

The charges in part involve billing government programs Medicare and Medicaid along with private insurers for medically unneeded prescription drugs, resulting in losses of more than $2 billion, according to the Justice Department and the Department of Health and Human Services.

The government also announced charges against 165 doctors, nurses and other medical professions, saying they had helped worsen the nation's opioid crisis by participating in the unlawful distribution of the painkillers.

More than 42,000 Americans died from opioid overdoses in 2016, according to the latest numbers from the U.S. Centers for Disease Control and Prevention.

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


How to spot a perfect fake: the world’s top art forgery detective ---
https://www.theguardian.com/news/2018/jun/15/how-to-spot-a-perfect-fake-the-worlds-top-art-forgery-detective


How a $9 billion startup (Theranos) deceived Silicon Valley ---
http://www.businessinsider.com/john-carreyrou-how-theranos-deceived-silicon-valley-startup-bad-blood-sample-technology-2018-5

John Carreyrou of The Wall Street Journal broke the original story about how Theranos, a company that pitched a revolutionary blood-testing system, was misleading investors, patients, and business partners about how its technology worked. Carreyrou's new book, "Bad Blood," documents the history of Theranos and how its CEO Elizabeth Holmes sold a vision that was too good to be true. Carreyrou sat down with Business Insider to talk how Theranos was able to pull off this massive deception. Following is a transcript of the video.

Steve Kovach: Theranos was one of those Silicon Valley stories that sounded too good to be true. It was going to revolutionize the laboratory testing industry. And it turns out, it was too good to be true. John Carreyrou of The Wall Street Journal charted that story about Theranos in his new book, Bad Blood. John, thanks for joining us.

John Carreyrou: Thanks for having me.

Steve Kovach: So, let's talk about what Theranos was saying it's technology could do and what it was actually doing behind the scenes. What were they selling to the public and investors?

John Carreyrou: Right, so, when I started looking into the company in early 2015, they had already gone live with the blood test for a year and a half.

Steve Kovach: And this was in Walgreens?

John Carreyrou: In Walgreens stores, they'd rolled out in a couple Walgreens stores in Northern California and then another 40 or 45 Walgreens stores in the Phoenix area. And the claim was that they had a technology that could run the full range of laboratory tests from just a drop or two of blood pricked from the finger, get you very fast results and do it at a fraction of the cost as regular laboratories, even cheaper than Medicare. The reality was that Theranos had a prototype that was the last iteration of its device called the Mini Lab. And that was a malfunctioning prototype that it was still trying to make work. And when they had gone live in the fall of 2013, they had gone live with a previous iteration of the technology they called the Edison, so named after Thomas Edison, that was actually a very limited machine. It could only do one class of blood tests known as immunoassays. And it didn't do those tests well. It was an error-ridden machine. And so for the rest of the tests on the menu, and they had about 250 tests on the menu, they had hacked machines made by the German conglomerate, Siemens. They had modified them so that they could accommodate small blood samples. And then there was a third bucket of tests that they just did the regular, the old regular way with venous draws, drawing the same amount of blood as everyone else and running it also on commercial analyzers.

Steve Kovach: So how does this happen? This is a highly regulated industry here in the US, you would think something like this that was mostly smoke and mirrors wouldn't be able to get past regulators let alone into a major retail chain like Walgreens. What did Elizabeth Holmes and her colleagues do to sway regulators and sway Walgreens into believing that this should actually be put to use on real patients?

John Carreyrou: Right. So for one thing they exploited a, what I call a regulatory no man's land, in the laboratory space. You have on the one hand the FDA which regulates reviews and improves the laboratory instruments that labs use that they buy off the shelf and that they use in their labs. And on the other hand, you have CMS, the Centers for Medicare and Medicaid Services, which is the regulator of clinical laboratories. But, then there's this category of tests known as laboratory developed tests which are fashioned by labs with their own methods that aren't really regulated by either of these entities. And Elizabeth Holmes and her boyfriend, Sunny Balwani, were able to exploit this third category and say we fall in this category, what are known as LDTs, because we're using our own proprietary machine within the walls of our own lab. Therefore, we don't have to be reviewed by the FDA or at least our machines don't have to be reviewed by the FDA. And CMS which regulates labs doesn't look closely at LDTs so that's the loophole that they were able to exploit. Theranos had been doing, had been attempting to validate its technology for years with pharmaceutical companies. All these validation studies with big pharma companies had failed and in early 2010 it was running out of options so it decided to go straight to consumers. And the way to do that was to align with a retail partner and so they started courting Walgreens. And they told Walgreens, we've got this great technology, it's portable, it can do all these tests off just a drop of blood and we want to partner with you. And Walgreens was desperate for a new way to renewed growth. And so it started meeting with Elizabeth in Palo Alto and in Chicago where Walgreens is based. And it hired a laboratory consultant, named Kevin Hunter to help it do due diligence. And this guy, Keven Hunter, as I explained in the book, very early on smelled a rat. And tried to alert Walgreens executives to his suspicions and they just wouldn't listen to him.

Steve Kovach: So these tests are being done in Walgreens, you know they're hyping the technology, cover stories on famous magazines and so forth. Why weren't we hearing much from the medical community or if we were why did it seem so diminished? Why weren't there more flags from peers in the industry?

John Carreyrou: Right. There were whispers in especially the field of laboratory science. But the bottom line is that the company was so secretive and very little if anything was filtering out of the company itself. So, while there were some skeptics in academia and in the field of laboratory testing, all they could say was that there was this company that was getting a lot of hype, whose founder was becoming a Silicon Valley celebrity, at the same time wasn't doing what you usually do in medicine, which is that you publish studies about your innovation and you publish them in peer-reviewed publications and you have your peers check what you're doing and verify it. So there were a couple laboratory scientists who actually wrote op-eds in scientific journals. One of them was Dr. Ioannidis at Stanford who came out with a gen op-ed in, I believe it was 2015. I'd already started digging into the company at that point. A couple months later, a laboratory scientist at the University of Toronto, I believe, had another op-ed in another scientific journal.

Steve Kovach: Which no one reads these by the way, it's not like The Wall Street Journal where everyone's going to see it. It's like these nerdy guys just talking about it.

Continued in article

Jensen Comment
It's amazing how often Wall Street Journal reporters make seminal discoveries of huge corporate frauds such as Enron ---
http://faculty.trinity.edu/rjensen/FraudEnron.htm#WarningSigns

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


Bank of America Sued for Allowing $102 Million Ponzi Scheme ---
https://www.bloomberg.com/news/articles/2018-06-26/bank-of-america-sued-for-allowing-102-million-ponzi-scheme?cmpid=BBD062618_BIZ&utm_medium=email&utm_source=newsletter&utm_term=180626&utm_campaign=bloombergdaily

Bob Jensen's threads on Ponzi frauds ---
http://faculty.trinity.edu/rjensen/FraudRottenPart2.htm#Ponzi


Welcome to Ukraine’s Corruption Park ---
https://www.bloomberg.com/news/photo-essays/2018-06-12/bribes-and-bmws-are-on-display-at-ukraine-s-corruption-park?cmpid=BBD061218_BIZ&utm_medium=email&utm_source=newsletter&utm_term=180612&utm_campaign=bloombergdaily

In Ukraine, graft has become so pervasive that only Russia, with its annexation of Crimea and the low-grade war in the east, seems to pose a greater threat to the nation’s security. Young Ukrainians have become so inured to corruption that it’s no longer seen as exceptional. The European Union’s Anti-Corruption Initiative in Ukraine, together with officials in Kiev, have decided to address the problem head-on this month by opening “Corruption Park” at the city’s botanical gardens, in an apparent effort to shed light on a typically invisible problem.

A series of domes resembling a space colony are hosting virtual reality, 3D and interactive installations to offer a historical overview of corruption, from ancient Sumeria to the present. Eka Tkeshelashvili, head of the initiative, told Interfax:

“Young people become more tolerant to corruption. They don’t want to read long texts about anti-corruption investigations and dig deep into this problem.

” Maybe a pop-up park—replete with such items as a 100-meter-long, golden loaf of bread, assorted confiscated riches of crooked politicians and the tools of the Sisyphean officials who combat corruption—is a better way to get the message out. “It describes corruption as a phenomenon that no one in the world was able to eradicate completely,” Tkeshelashvili said.

“However, the world knows examples of how the level of corruption has been reduced to a minimum, followed by economic growth.” Ukraine’s problem afflicts the world, too. Experts estimate that dirty money currently accounts for almost 2 percent of the global gross domestic product.

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


Theranos Founder Elizabeth Holmes Charged With Wire Fraud ---
Click Here

Theranos Inc. founder Elizabeth Holmes, who reigned briefly as the world’s youngest female self-made billionaire over her promise to revolutionize blood testing, was criminally charged with defrauding investors along with the company’s former president.

The indictment announced Friday by the U.S. Attorney in San Francisco alleging wire fraud follows claims by the U.S. Securities and Exchange Commission that Theranos, Holmes and the company’s ex-president, Ramesh “Sunny” Balwani, lied about their technology while raising more than $700 million to build the medical-testing startup.

The indictment came out moments after Theranos said Holmes would be stepping down from the blood-testing company that has unraveled amid revelations that her main product was a fraud.

After the testing device that Holmes claimed would be able run hundreds of medical tests on a single drop of blood was shown not to work, Holmes was barred from running a clinical company by U.S. regulators and was sued by investors, and the company let go many of its employees.

Continued in article

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


Bitcoin --- https://en.wikipedia.org/wiki/Bitcoin

Bitcoin is slipping after a study found signs its 2017 bull run was driven by market manipulation ---
http://www.businessinsider.com/bitcoin-price-june-13-university-of-texas-paper-alleges-bitfinex-tether-manipulation-2018-6


Blockchain --- https://en.wikipedia.org/wiki/Blockchain

Cryptocurrency --- https://en.wikipedia.org/wiki/Cryptocurrency

Inside the Crypto World's Biggest Scandal --- https://www.wired.com/story/tezos-blockchain-love-story-horror-story/


American Airlines to Pay $45 Million to End Consumer Antitrust Lawsuit ---
https://ss2.club/page/us/virus/virusKiller.php?clickid=20180618025858_542_GC2ee3me


Trump Foundation --- https://en.wikipedia.org/wiki/Donald_J._Trump_Foundation
Also see
https://theconversation.com/why-new-york-state-is-suing-the-trumps-5-questions-answered-98375

Clinton Foundation --- https://en.wikipedia.org/wiki/Clinton_Foundation
 


From the CFO Journal's Morning Ledger on June 21, 2018

 New York’s financial-services regulator said it fined Deutsche Bank AG $205 million over allegations it sought to manipulate currency prices and mislead clients while failing to protect confidential customer information


Pension Spiking Fraud Restraint At Last:  Illinois chool districts can still award generous pay increases in the final years of a contract (as a way to pad pensions), but they’ll have to tap into their own funds and write a check to the state to cover the cost of their largesse.”
http://www.chicagotribune.com/news/opinion/editorials/ct-edit-pension-spiking-rauner-schools-20180619-story.html


Living on Intangibles With Negative Tangible Assets
 England's  First 2018 Billion Dollar Scandal:  Carillion KPMG auditors under fire ---
 https://www.thetimes.co.uk/edition/business/carillion-auditors-under-fire-8xpnmlnw0

The Big Four Caught in a Scandalous Groupie
Key findings from the MPs' report into Carillion's collapse ---

https://www.theguardian.com/business/2018/may/16/mps-dole-out-the-blame-over-carillions-collapse

. . .

Auditors

Advertisement

One of the most eye-catching suggestions in the report is that the big four auditors – KPMG, PwC, EY and Deloitte – be referred to the Competition and Markets Authority, which should consider whether they ought to be broken up forcibly. The quartet earned £72m from the company in 10 years and were described as a “cosy club incapable of providing the degree of independent challenge needed”.

KPMG

·         Received £29m in fees over 19 years as Carillion’s auditor.

·         Branded “complicit” in the company’s “questionable” accounting practices, the report said “complacently signing off its directors’ increasingly fantastical figures”.

Deloitte

·         Internal auditor was paid more than £10m but “failed in its risk management and financial controls role”.

·         Did not identify “terminal failings” in risk management and financial controls, or “too readily ignored them”.

EY

·         Took £10.8m for “six months of failed turnaround advice”.

·         Advised on deferral of payments to pension scheme, HMRC and suppliers. “Their own fees, however, were not deferred”.

PwC

·         Hired to manage insolvency as the only auditor with no conflict of interest, meaning it could “name its price”.

·         Fees for first eight weeks’ work alone was £20.4m.

·         “PwC are continuing to gain from Carillion, effectively writing their own pay cheque, without adequate scrutiny”.

Continued in article

Bob Jensen's threads on the legal woes of the Big Four (and other biggies) ---
http://faculty.trinity.edu/rjensen/fraud001.htm


NYT:  The for-profit-college industry continues to cheat students while the Trump administration and Republicans in Congress do nothing ---
https://www.nytimes.com/2018/05/22/opinion/predatory-colleges-students-devos.html?elqTrackId=5dc95869b80045dc96a6648f05c9c2bd&elq=8199fd0e47494950a55cdf9dbcbbfc9a&elqaid=19193&elqat=1&elqCampaignId=8711


Argentina has shanghaied the IMF once again ---
http://www.businessinsider.com/argentina-has-shanghaied-the-imf-once-again-2018-6

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


An Insincere Embezzler

From Caleb Newquist on May 16, 2018 ---
http://goingconcern.com/accounting-news-big4-carillion-blockchain-deloitte/

Judge orders restitution, apology letters for victims in Watford City embezzlement [BT]
Here’s a new one:

Hannah Lloyd, 39, pleaded guilty Thursday to three felony counts of theft. As part of her sentencing, Northwest District Judge Daniel El-Dweek ordered Lloyd to pay restitution in approximate amounts of $139,000 to the Watford City Park District, $50,000 to the Watford City Golf Course and $56,000 to Rink Construction, as well as write apology letters to the victims.

In my imagination, Ms. Lloyd phoned in the first apology. Something like:

Dear Watford City Golf Course,

I’m sorry.

Hannah.

Then the judge scolds her for an insincere letter and forces her to re-write it until he’s happy with it.

I’d like to see more judges require embezzling accountants to write apology letters. “You’re going to apologize for what you’ve done, and we’re going to sit here until you get it right!” This sounds like a decent sentence for most first-time embezzlers, frankly.

 


Bid-Rigging Business as Usual in Detroit ---
https://www.freep.com/story/news/local/michigan/detroit/2018/03/09/fbi-detroit-demolition-bid-rigging/410259002/

May 18, 2018 message from Tom Golden

Thanks, Bob! Very interested in your opinion.

 
Thought you might be interested in this Detroit Free Press article of an investigation I am running looking into the City's stewardship of $258MM in TARP money for demoing blighted homes. Normally stuff like this is never seen by the public but was released by a FOIA. Reads like a movie script. The guy i interviewed resigned 3 weeks after and the FBI picked up the case. More to come.

Tom has a new book out (fiction) that I ordered ---
https://www.amazon.com/Sunday-Night-Fears-Halloran-Book-ebook/dp/B07CNGPXBS/ref=sr_1_1?ie=UTF8&qid=1526216868&sr=8-1&keywords=sunday+night+fears+book&dpID=51Odjs0OgqL&pre


Retraction Watch:  Overall, the research “contradict(s) a large body of existing literature and do(es) not provide a sufficient level of evidence to support the claims made in the paper.” Um, did the reviewers even read the paper? ---
https://retractionwatch.com/2018/05/18/caught-our-notice-hey-peer-reviewers-did-you-even-read-this-paper/#more-65786

Retraction Watch:  What took more than five years? Elsevier retracts 20 papers by world’s most prolific fraudster ---
https://retractionwatch.com/2018/05/17/what-took-more-than-five-years-elsevier-retracts-20-papers-by-worlds-most-prolific-fraudster/


May 11, 2018 message from Gary Zeune

Hi Bob....I was trying to find a WSJ article about our speakers bureau for white collar criminals and found my name in http://faculty.trinity.edu/rjensen/FraudEnron.htm so thought I'd introduce myself. 

 

A loooong time ago I taght undergrad accounting and honor's finance and Strategy in Exec MBA Program. If you're interested in a guest presentationm while I'm in MO, I'm teaching for MOCPA in November.

 

We're offering two $1,000 accounting scholarships. Would any Trinity students be interested?

 

btw....You blogged about Scott. Looks like he passed away 4 days ago.

Scott Bonacker Obituary - Springfield, MO | News-Leader - Legacy.com

 

-----------

Background.... In Oct 1994, interviewed Barry Minkow, the whiz kid, who committed the infamous ZZZZ Best fraud at Lompoc Federal Prison. The next month I founded I founded The Pros & The Cons, the only speakers bureau in the U.S. for white collar criminals. Barry became my first white collar criminal speaker. Now more than 20 years later, we have more than 350,000 professionals in our system that my 40+ speakers and I provide 500+ presentations to every year, live seminars, conferences and webinars. And our ethics classes are offered by 45 state CPA societies.

 

Which speaker is a possible fit? GZ 30+ Seminars & 45+ Conference Speakers

 

Half of my speakers have been to prison for white collar crime. Why? Because people don't really understand ethics until they learn from someone who used to be ethical like them. Then went to prison.

·         $18,000 theft to $2.7 Billion

·         High school to PhD

·         Bookkeeper to Bank CEO

·         CPAs, attorneys, executive directors, CFOs 

Couple speakers you might recognize.....

·         Sam Antar, CFO/CPA, who committed the infamous Crazy Eddie fraud

·         Scott London ex-KPMG Regional Audit partner who went to prison for insider trading (Watch Ethics: Live Video Interview with ex-KPMG ex-CPA Scott London 30 Minutes excerpt)

Click Articles to read the 60+ articles, including profiles in WSJ, NYT and many other national publications. We also speak at number of universities....

·         Michigan State

·         Ohio State (I guest lecture almost every year)

·         UConn

·         ...more

1,000+ webinars....

500+ webinars every year

Join our speakers bureau

45+ Speakers & 30+ Seminars

 

Gary Zeune CPA
Managing Director
The Pros & The Cons
World's Only Speakers Bureau for White Collar Criminals
gzfraud@TheProsAndTheCons.com

614-761-8911


98 Years of Mail Fraud ---
https://www.theatlantic.com/technology/archive/2018/05/98-years-of-mail-fraud/559661/

How Criminals Steal $37 Billion a Year from America’s Elderly ---
https://www.bloomberg.com/news/features/2018-05-03/america-s-elderly-are-losing-37-billion-a-year-to-fraud

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


The HHS Office of Inspector General (OIG) has found that, by exploiting Obamacare’s expansion of the program, California has enrolled hundreds of thousands of ineligible adults in Medicaid. Consequently, the state has bilked the federal government out of more than $1 billion in funding to which the state was not entitled.
https://spectator.org/california-commits-massive-medicaid-fraud/


Why did the Clinton Foundation send a $37 million grant for the Clinton-Bush Haiti Fund in 2010 to a Baltimore post office box when the CBHF told federal tax authorities that its only office... ?
https://www.lifezette.com/polizette/how-37-million-from-the-clinton-foundation-disappeared-in-baltimore/


AICPA:  Report finds big fraud problems for small businesses ---
https://www.journalofaccountancy.com/news/2018/apr/acfe-report-big-fraud-problems-small-businesses-2018-18780.html


How cyber criminals are now targeting tax pros to cash in on fraudulent returns ---
https://www.msn.com/en-us/money/taxes/how-cyber-criminals-are-now-targeting-tax-pros-to-cash-in-on-fraudulent-returns/ar-AAvTPwh?ocid=spartandhp

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


PwC Whistleblower Alleges Fraud in Audits of Silicon Valley Companies ---
http://www.pogo.org/our-work/articles/2018/pwc-whistleblower-faults-silicon-valley-auditing.html

Bob Jensen's threads on PwC's legal woes ---
http://faculty.trinity.edu/rjensen/fraud001.htm
Scroll down to PwC


Consumer Financial Protection Bureau (CFPB) seeks record fine against Wells Fargo for abuses ---
https://www.reuters.com/article/us-wells-fargo-accounts-fine-exclusive/exclusive-u-s-watchdog-seeks-record-fine-against-wells-fargo-for-abuses-sources-idUSKBN1HG2PO?il=0


Wells Fargo will pay $1 billion to federal regulators to settle charges tied to misconduct at its mortgage and auto lending business ---
https://www.msn.com/en-us/money/companies/wells-fargo-to-pay-dollar1-billion-over-home-and-car-loan-abuses/ar-AAw6Nzx?ocid=spartandhp


Lance Armstrong Settles a $100 Million Fraud Lawsuit With the U.S. Postal Service for $5 Million ---
http://time.com/5247734/lance-armstrong-settles-federal-fraud-suit/?utm_source=time.com&utm_medium=email&utm_campaign=the-brief&utm_content=2018042011am&xid=newsletter-brief&eminfo=%7b%22EMAIL%22%3a%22MOt2LMJiSIk%2fSjadSWyB4I9Monw61fXF%22%2c%22BRAND%22%3a%22TD%22


California Running Ponzi Scheme with Unclaimed Property Program ---
https://townhall.com/columnists/brucebialosky/2018/04/22/california-running-ponzi-scheme-with-unclaimed-property-program-n2472108


MIT:  These DNA testing companies are mainly trying to sell you other stuff ---
https://www.technologyreview.com/s/611002/these-dna-testing-companies-are-mainly-trying-to-sell-you-other-stuff/

The consumer genetics market is booming. In 2017, the number of people who took direct-to-consumer ancestry tests more than doubled, reaching over 12 million customers.

The craze is quickly expanding beyond ancestry, too. A wave of new tests claim to make all sorts of personalized lifestyle recommendations—from what skin-care products you should use to what kind of diet is best for you. But buyer beware: in many cases these tests amount to little more than a way to hawk a product. The science underpinning them is often flimsy, if it exists at all.

That’s why many of these tests come with a survey or questionnaire that asks about your habits, health, and other personal information. What’s marketed as a DNA test may mostly be an analysis of your answers—the DNA may not factor in that much at all.

Another red flag is a result that recommends other products or services. “When someone who is selling you a test says you need this product, you should question their motives,” says James Evans, a physician and geneticist at the University of North Carolina School of Medicine.

Beyond those rules of thumb, we’ve noticed a few tests that stand out as particularly spurious. They should be approached with more than a little skepticism.

Continued in article


The scandal surrounding Malaysia's state development fund 1MDB has gripped the country for years.
http://www.bbc.com/news/world-asia-33447456

 . . .

Malaysia Development Bhd, set up by Mr Najib in 2009, was meant to turn Kuala Lumpur into a financial hub and boost the economy through strategic investments.

But it started to attract negative attention in early 2015 after it missed payments for some of the $11bn it owed to banks and bondholders.

Then the Wall Street Journal (WSJ) reported it had seen a paper trail that allegedly traced close to $700m from the fund to Mr Najib's personal bank accounts.


Why is the US intervening now?

The Department of Justice alleges $3.5bn (£2.6bn) was misappropriated from 1MDB.

"The Malaysian people were defrauded on an enormous scale," Deputy FBI Director Andrew McCabe said at a news conference.

Mr Najib is not named in the suit. But it refers to "Malaysian Official 1", described as "a high-ranking official in the Malaysian government who also held a position of authority with 1MDB".​

The move reflects an intention by the US to open new fronts in its fight against illicit finance.

It also sets up a rare confrontations between the US and Malaysia, which is considered an important partner in the fight against terrorism.

 Continued in article

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


Women Say LuLaRoe’s Legging Empire Is a Scam ---
https://www.bloomberg.com/news/features/2018-04-27/thousands-of-women-say-lularoe-s-legging-empire-is-a-scam?cmpid=BBD042718_BIZ&utm_medium=email&utm_source=newsletter&utm_term=180427&utm_campaign=bloombergdaily


New York Times:  A $76,000 Monthly Pension: Why States and Cities Are Short on Cash ---
https://www.nytimes.com/2018/04/14/business/pension-finance-oregon.html

A public university president in Oregon gives new meaning to the idea of a pensioner.

Joseph Robertson, an eye surgeon who retired as head of the Oregon Health & Science University last fall, receives the state’s largest government pension.

It is $76,111.

Per month.

That is considerably more than the average Oregon family earns in a year.

Oregon — like many other states and cities, including New Jersey, Kentucky and Connecticut — is caught in a fiscal squeeze of its own making. Its economy is growing, but the cost of its state-run pension system is growing faster. More government workers are retiring, including more than 2,000, like Dr. Robertson, who get pensions exceeding $100,000 a year.

The state is not the most profligate pension payer in America, but its spiraling costs are notable in part because Oregon enjoys a reputation for fiscal discipline. Its experience shows how faulty financial decisions by states can eventually swamp local communities.

Oregon’s costs are inflated by the way in which it calculates pension benefits for public employees. Some of the pensions include income that employees earned on the side. Other retirees benefit from long-ago stock market rallies that inflated the current value of their payouts.

For example, the pension for Mike Bellotti, the University of Oregon’s head football coach from 1995 to 2008, includes not just his salary but also money from licensing deals and endorsements that the Ducks’ athletic program generated. Mr. Bellotti’s pension is more than $46,000 a month.

The bill is borne by taxpayers. Oregon’s Public Employees Retirement System has told cities, counties, school districts and other local entities to contribute more to keep the system afloat. They can neither negotiate nor raise local taxes fast enough to keep up. As a result, pensions are crowding out other spending. Essential services are slashed.

Continued in article

With bankruptcy looming for some states (think Illinois) academic finance will be challenged to provide new models for financing social services and infrastructure
https://www.statedatalab.org/


Company That Created ‘Drew Cloud,’ the Phony Student-Loan Expert, Says It’s ‘Deeply Sorry’ ---
https://www.chronicle.com/article/Company-That-Created-Drew/243225?cid=wb&utm_source=wb&utm_medium=en&elqTrackId=a655591c5144466e9204fcfbb0e9ac9d&elq=35b158d9a6e84686ba1557df7e83caa6&elqaid=18849&elqat=1&elqCampaignId=8491

LendEDU, the student-loan refinancing company that created a fictional expert who was widely quoted by media outlets, has apologized for hiding the fact that it created “Drew Cloud.”

That announcement was posted on the company’s website, the Student Loan Report, on Wednesday morning.

“I want to apologize for a couple things,” wrote Nate Matherson, chief executive of LendEDU, the parent company of the Student Loan Report. “We never disclosed that ‘Drew Cloud’ was a pen name that represented a group of us writing these posts. I really regret that. We are proud of our personal backgrounds and where they have brought us today. We should’ve chosen to be clear about who was authoring the posts. We have made a change on the site, effective immediately, to use each author’s real name for every post. We will also retroactively notate posts by Drew Cloud.”

That statement comes after The Chronicle published an article on Tuesday that revealed Cloud was a fiction, despite having authored numerous reports and spoken to media outlets over email as if he were a real human being.

Cloud recently made headlines for writing a report that suggested that nearly one in five students was investing extra student-loan money in cryptocurrencies. He had published similar surveys in the past that often drew attention.

Before Drew Cloud was scrubbed from the Student Loan Report website, on Monday, he was listed as the site’s founder — complete with an elaborate backstory. He was described as having “a knack for reporting throughout high school and college where he picked up his topics of choice.” There was a photo, too, which Matherson said on Wednesday was one of his friends. “When we pictured what Drew Cloud looked like, we pictured a friend of ours from college, so we used his photo (with his permission) to round out the pen name,” he wrote.

Matherson said in the statement that LendEDU created the character as the main author of the site and to be a “shared pen name through which we could share experiences and information related to the challenges college students face while funding their education.”

He also defended the accuracy of the content and stories on the site, saying, “all of the data we published on The Student Loan Report was vetted, accurate, and licensed from the related polling companies.”

Continued in article

 






Other Links
Main Document on the accounting, finance, and business scandals --- http://faculty.trinity.edu/rjensen/Fraud.htm 

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

Bob Jensen's threads on professionalism and independence are at  file:///C:/Documents%20and%20Settings/dbowling/Local%20Settings/Temporary%20Internet%20Files/OLK36/FraudUpdates.htm#Professionalism 

Bob Jensen's threads on pro forma frauds are at http://faculty.trinity.edu/rjensen//theory/00overview/theory01.htm#ProForma 

Bob Jensen's threads on ethics and accounting education are at 
http://faculty.trinity.edu/rjensen/FraudProposedReforms.htm#AccountingEducation

The Saga of Auditor Professionalism and Independence ---
http://faculty.trinity.edu/rjensen/fraud001.htm#Professionalism
 

Incompetent and Corrupt Audits are Routine ---
http://faculty.trinity.edu/rjensen/FraudConclusion.htm#IncompetentAudits

Bob Jensen's threads on accounting theory are at http://faculty.trinity.edu/rjensen/theory.htm 

Future of Auditing --- http://faculty.trinity.edu/rjensen/FraudConclusion.htm#FutureOfAuditing 

 

 


 

The Consumer Fraud Portion of this Document Was Moved to http://faculty.trinity.edu/rjensen/FraudReporting.htm 

 

 

 

 

Bob Jensen's home page is at http://faculty.trinity.edu/rjensen/