In 1992 Sears Auto center was charge with fraud by California consumer protection. They were accused of setting quota to their employee to sale a certain number of product or services during their 8-hour work shift. This caused an overcharge that was about $233.00 a car. Auto-repair shops chairman Edward A. Brennan, stated that the incentive compensation program and sales goals created an environment where mistakes occurred but Sear never admitted to any wrongdoing took place. Eventually there were penalties faced, 72 of Sears California auto department was put on three years probation. To deal with this issue Sear gave 46.6 million dollar in coupon to help restore it image. This was considered one of the largest consumer fraud settlements
When doing an evaluation of any case, you should always look at all the relevant facts and issues involved before jumping to conclusions. As for this case, Mike Thurmond, the operator of Top Quality Auto Sales, a used car dealership, has financed his dealerships inventory of vehicles by creating a financing arrangement with Indianapolis Car Exchange (ICE). ICE then filed a financing statement that listed Top Quality’s inventory as collateral for the financing. After this, Top Quality sold a Ford truck to Bonnie Chrisman, who was also a used car dealer. Chrisman paid Top Quality for the truck and then proceeded to sell it Randall and Christina Alderson, who paid Chrisman for the vehicle. In
I believe that asset misappropriation by accounts payable fraud is occurring at Wayland Manufacturing Company due to a lack of proper internal controls. Making the company’s Chief Accountant responsible for additional day-to-day functions provides him with opportunity to commit by creating fictitious vendors with his information and then creating fictitious invoices. Newbaker can then conceal his fraud by approving the invoices for payment. Employees working at an organization for more than five years are more likely to commit fraud. Therefore, Newbaker’s six-year history with the company has made him trustworthy and very knowledgeable, which could indicate involvement in asset misappropriation. The high employee turnover could represent a past fraudster leaving before getting caught or employees refusing to continue with the asset misappropriation. In addition, the varying monthly accounts payable transactions ranging from the lowest being April 2014 and
Being an investigator to Apollo Shoes, the financial statement fraud scheme likely to be present is dependent on the nature of the company. Statement on Auditing Standards No. 99 (“SAS 99”) requires to focus on two broad areas of fraud:
Also, around 5,300 employees were found to be involved in the scheme over a period of 5 years. In this case, if the defendant is liable, how should they be prosecuted for their fraud? Aggressive sales goals push employees to break the rules. “On average, 1 percent of employees have not done the right thing, and we terminated them.
Central Garage, Inc. It was a challenging opinion to read since this case is old and, at that time, no Florida court had addressed the precise issue presented. The facts of the case are that Central Garage DBA Gulfcoast is a corporation that performs installations, repair and maintenance of auto air conditioners and auto accessories. On the other side, Hapney worked in many auto repair shops in the Tampa area where he learned to install and repair auto air conditioning systems. In 1988, he started working for Gulfcoast, where he entered into a non-compete agreement. The agreement stated the following: “I further agree that for a period of three years following the termination of my employment I will not offer, as an agent, employee, owner, or distributor, similar products or services on behalf of a competitor of the Company on the west coast of Florida from Crystal River to Naples or inland 100 miles.” A year after working with Gulfcoast, Hapney willingly ended his employment with Gulfcoast and a month later, Gulfcoast filed a lawsuit to enforce the covenant not to compete in where the trial court granted an injunction. As stated earlier, at the time of the case, there wasn’t many decisions in which the judge can cite and base his decision on. The judge for this case had to look for cases in other states to get an idea of cases with a similar issue, which makes it a tough case to decide on. Some of the issues that the appellate court focused on is that Hapney did not receive significant training on installing and repairing automobile air conditioning systems, he had no significant contacts with Gulfcoast’s customers, and he did not acquire trade secrets from Gulfcoast. These were three issues that were heavily discussed on the opinion and it amazes the kind of detail that they were covered with. The
One of the most recent white-collar crime involved Wells Fargo, a banking and financial services provider. In 2016 San-Francisco based bank Wells Fargo (WFC) employees secretly created millions of unauthorized bank and credit card accounts without permission of their customers. Opening about 1.5 million fraudulent deposit accounts and submitting 565,443 credit card applications allowed Wells Fargo employees to boost their sales targets and receive bonuses. Consequently, customers were wrongly charged fees for accounts they did not know existed. In this business crime scenario, Wells Fargo involved to pay $185 million in fines and refund $5 million to affected customers. Also, around 5,300
...useless car to a junk yard to recover some loss, but the difference of the re-sale of the junk-car would be a significant loss. Though there were no adequate assurances to the contract, anticipatory repudiation is the only probable remedy for Jack. However, the outcome would weigh on the predominant factor test, which is met because Tom is covered as a merchant because he is operating in his usual daily business, and Jack is the buyer. The sole purpose of the contract was for Tom to sell Jack a car, and for Jack to buy a car from Tom. The UCC, though less stringent than the statute of frauds, does effectively regulate commercial transfers allowing the free market to operate without diminishing the integrity of trade.
Although the plant accountant knew it was wrong to charge motors to operating expenditures, the accountant bowed to the pressure to do it anyway. The accountant violated the AICPA code of conduct, especially regarding serving the public interest. There were also issues with honesty and integrity.
Making false or misleading statements with the purpose of securing goods or services under the Workers' Compensation Act;
The lawsuit claimed that regional managers forced store managers to work off the clock so they would not receive overtime pay. GNC denied the accusations, however they agreed to pay $350,000 to 386 current and former employees to settle the suit and an additional $475,000 in attorney fees (Tribune Review).
In July 1996, Alert J.Dunlap (also known as Chainsaw Al)was hired as CEO and Chairman by Sunbeams' board of directors to help the company from a period of lagging sales and profits and make it an attractive acquisition target.
I recently obtained a copy of my credit report from your service and have found the following items to be in error.
In today’s day and age, there is a lot of news that is related to corporate accounting fraud as companies intentionally manipulate their financial statements to show a better picture of their financial health. The objective of financial reporting is to provide financial information about a company to its various stakeholders such as investors and creditors so that these stakeholders can make decisions accordingly. Companies can show a better image of their financial well being by providing misleading information. This can be done by omitting material information from the books or deceitful appropriation of assets such as inventory theft, payroll fraud, check forgery or embezzlement. Fraudulent financial reporting will have an effect on the
image of Samsung in China and led to a loss of US$210,000 in 1998 for
Explain why the controversy involving Canwest in 2001 resulted in the company changing its policies?