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...

Is Fraud Committed by a Spiritual Advisor and an Accountant One and the Same?

Yes according to the Manhattan district attorney who prosecuted a fortune teller for committing fraud. Here's a quote from the NY Times:

“Larceny is larceny, no matter what form it takes,” Cyrus R. Vance Jr., the Manhattan district attorney, said in a statement. “Fraud by a spiritual adviser is no different than fraud committed by an attorney, an accountant or any other person who gains an individual’s trust in order to steal from him or her.”

If you are interested in what this fortune teller did, I'd check out the short article on the NY Times... I personally think the commonalities in various forms of fraud (such as gaining trust) are informative.

Ernst & Young Corruption Survey Results

Ernst and Young surveyed over 3,000 employees from 36 countries in Europe, the Middle East, Africa and India and found that a large percentage are aware of fraud in their organizations. The percentage admitting they knew of fraud seems to increase as you move up the management ladder of the organization. For example, 42% of board members and senior managers admitted to knowing about financial reporting irregularities. Apparently they admitted that either sales or costs had been manipulated...

Before you're tempted to dismiss this as due to corruption in the under developed nations, it turns out that while the rates are much higher in the third world, even highly developed countries in Europe report significant amounts of fraud (including financial reporting fraud) is going on in their companies. My guess is that the US is probably not as good as the best European nations

So much for fairly stated financial statements, not to mention, bribery and other forms of corruption...

Bizarre Attempted Fraud of the Day

Perhaps they were hoping to win a Darwin Award?

Couple Put Razor Blades in Doughnuts

Justice Department Admits They're Soft on Fraud

As I've said in several posts in the past, including this one, the Justice Department under this administration is very soft on prosecuting fraudsters. As a result, the key players who caused the mortgage meltdown have been essentially given a "get out of jail free" card. Interestingly, Eric Holder, head of the Justice Department has even admitted that they don't prosecute fraudsters. In Holder's view, doing so would hurt the economy! Amazing!! This definitely explains a lot... Here is a great write up of this absurd and twisted logic by Barry Ritholz...It's pretty short and well worth reading.

The Real Winners in the Lance Armstrong Investigation: His Attorneys

Photo taken from Forbes.com

In most fraud cases, the real winners are the attorneys. This is definitely looking to be the case  with Lance Armstrong since he is getting sued left and right these days. Not only has the US Justice Department joined in Floyd Landis's suit claiming Lance defrauded the US Postal Service but numerous other lawsuits and legal actions are being filed daily. While the suit by the US Postal Service could, in theory, add up to over $100 million, these other suits could also add up to real money too, especially when you consider all the legal fees his attorneys must be charging him. For example, I learned about the following two new lawsuits today...

Lance Armstrong Investigation: Fed to Join Landis in Suing Lance, Weisel and Stapleton

This is hot off the press and, from what I can tell, was first published by the Wall Street Journal. Amidst speculation in the past few days that the Department of Justice was not going to join in the whistleblower lawsuit filed by Floyd Landis, the WSJ is saying they are going to join in. This is bad news for Lance, Thom Weisel and Bill Stapleton since Lance has now stated publicly that he was doping. On the other hand, this is good news for Floyd Landis who could end up a multi-millionaire as a result of this lawsuit. Here are some key fraudbytes from the WSJ article:

Lance Armstrong Investigation: Criminal Charges May Be in the Works

According to CBS News, federal investigators are considering criminal charges against Lance Armstrong. The main charges being considered are obstruction of justice, intimidation and witness tampering. I'd say intimidation is his specialty but the others are right up his alley too.

This investigation comes after the original criminal investigation was suddenly dropped a year ago by the now, infamous, Andre Birotte. Birotte had a few words about his investigation saying that he basically stands by his decision to drop it.

Here are some excerpts from CBS News:

My Analysis of the Lance Armstrong-Oprah Winfrey Interview

Photo taken from WSJ.com

I was traveling last night and was unable to watch the interview last night but I read some articles on what happened in Lance Armstrong's interview by Oprah Winfrey including one that gives all his responses on the Wall Street Journal. It's interesting reading for sure. Here are some thoughts:

Feds Joining Suit Against Lance Armstrong

CBS News reported yesterday that the federal government is considering joining in Floyd Landis's lawsuit against Lance Armstrong which alleges that he defrauded the government due to his doping while receiving $30 million in sponsorship funds from the US Postal Service. My understanding is that the government could receive treble damages for this lawsuit which would amount to $90 million. Lance would not be the only one to be hurt by this.

A tweet this afternoon by CBS News says that they have learned that Lance offered to settle with the government for $5 million and that he offered to be a cooperating witness in a federal investigation. The tweet claims that the Department of Justice turned down both offers.

If this is true, it suggests that the federal government will be joining in the lawsuit against Lance and they expect to go for significantly more than $5 million. The saga continues...

WADA Says Lance is not in Charge!

Just when Lance Armstrong probably was hoping he could show he is cooperating with USADA and WADA to get them to cut him some slack, WADA let's him know that he isn't in charge! Check it out at SportsIllustrated.com. Here is the heart of it:

Will Lance's Confession be Anticlimactic?

I've been thinking that saying Lance's confession will be anticlimactic will be a major understatement. I had decided that I won't even try to watch it come out live because it seems like a waste of time. However, yesterday, the NY Times published an article suggesting that Lance Armstrong's confession may be interesting in that it could involve testifying against many top-level officials in cycling such as Hein Verbruggen and Pat McQuaid of the UCI and Lance's former partner at Tailwind Sports, Thom Weisel. Here are some key excerpts from the Times article:

Questions for Oprah to Ask Lance

We've all been hearing that Lance Armstrong is set to finally admit to doping and he has picked Oprah Winfrey to interview him when he admits it. NY Daily News published an article with questions that Betsy Andreu would like Oprah Winfrey to ask Lance Armstrong when Oprah interviews him at his Austin mansion on Monday. Betsy has some doozies that Oprah is sure to never ask. You can bet that if there was even a chance that Oprah would ask some of these questions, Lance would never agree to be interviewed by her. Here are Betsy's questions followed by two of my own...

Lance Armstrong Allegedly Bribed USADA

60 Minutes is going to air a segment on Lance Armstrong on Wednesday, January 9th, at 10 pm Eastern. The CBS News website states that they will report that someone representing Lance offered USADA a $250,000 "donation" in 2004. Travis Tygart, USADA CEO, is quoted as saying "We had no hesitation in rejecting that offer."

I suppose the truth about Lance will trickle out for years to come...It definitely makes a good case study for anyone out there teaching about fraud, corruption and organized crime. It makes me wonder if Lance's real name ends in Gambino or Bonanno...Maybe Armstrongo...