Archive for June, 2009
Madoff due for sentencing in Ponzi scheme case
The wheels of justice are due to make one more turn later this month in the Bernie Madoff Ponzi scheme case. Madoff is due to appear in late June 2009 before a Federal Court in New York to be sentenced for his part in the largest Ponzi scheme in history.
What has confounded forensic investigators, prosecutors and forensic accountants is the fact that they are publicly no closer to establishing exactly who else may have assisted Madoff in planning, executing and concealing the mammoth fraud. Madoff, now 71 years old, has refused to assist in unraveling the structures and intrigues of his fraudulent management of other people’s money via Madoff Investment Securities. Madoff is the only person to be charged in this matter so far, despite a number of his close family members holding integral positions within the Madoff investment structure.
Tracking the structure and movements within a fraudulent investment scheme which is thought to have spanned decades has proven to be a tough nut for forensic investigators to crack. Sorting through false bank statements, fake trades and non existent deposits has taken months and are still yet to provide definite information as to who else may have directly and knowingly assisted Madoff with the fraud. Investigators have been able to show that trades which were said to have been entered into and were declared in clients’ monthly statements, in fact never occurred. However, this still leaves the issue as to who else knew what Madoff was up to.
Another Ponzi scheme? This time in South Africa
Allegations of a massive fraudulent investment scheme operated by a South African businessman are circulating. Forensic investigators have been hired to obtain evidence confirming that fraudulent means have been used to either inflate or falsify income and performance. Forensic accountants are also said to be examining the available financial transactions for indications as to the methods used to operate the fraud.
The businessman at the centre of the alleged fraud, South African Barry Tannenbaum, has been accused of defrauding dozens of investors in what would be the country’s largest corporate fraud. The funds missing have been estimated at around US$1.2 Billion. Mr. Tannenbaum has publicly denied any wrongdoing and has blamed the recent credit crunch for his company’s woes. Mr. Tannenbaum is currently residing in Sydney, Australia and has given brief interviews to the media there denying that he has taken part in any fraud.
However, some observers have noted the similarities between the woes affecting Mr. Tannenbaum and those which affected Ponzi schemes, such as the infamous Bernie Madoff. These similarities include: Click Here To Read More
Pre employment screening: an anti-fraud tool
Fraud has become one of the greatest threats to corporations and organisations over the past decade. Forensic fraud investigators are often deployed to uncover fraudulent activity after suspicions are raised or a tip-off. Though estimates for the totals amount defrauded from corporations, institutions and governments vary wildly, they all agree on one point; the frequency and quantity of loss to fraud is increasing. One of the best estimates is conducted by the Association of Certified Fraud Examiners (ACFE) which calculates that U.S. organisations lose an estimated 7 percent of annual revenues to fraud - a staggering estimate of around US$994 billion for U.S. organisations in 2008.
Various surveys conducted by international accounting firms over the past 5 years have found that one of the best ways to combat fraud is to hire the most honest, qualified and experienced personnel available. This reduces the chances of hiring current or potential fraudsters and sets a minimum level of quality and ability for personnel hired. Intellisec believes the most effective way to do this is to perform pre-employment screening on all prospective hires, contractors and interns prior to engaging them.
What is PES?
PES is the abbreviation commonly used for `Pre Employment Screening’. PES generally refers to the method whereby a prospective employer arranges for information relating to a potential candidate or contractor to be checked and verified to confirm suitability for employment and whether they have a criminal record / history of being involved in dishonest activities.
