An avid example is United States v. Domanski (2008). In this highly publicized recent case, the defendants’ indictment and subsequent guilty plea for embezzling over $1.3 million from a credit union in Nebraska; FNEEG, saw her pay said amount in return for leniency during sentencing. In conclusion, the recent increase in cases of embezzlement of public funds has had various economic and legal implications. In regard to economic repercussions, embezzlement has necessitated the need for agencies and corporations to implement more stringent measures for auditing organizational and agency expenditures. Additionally, within the legal sphere, this has led to more punitive sentences being handed out in a bid to discourage this growing
Here are a few cases that show what people are going through and how the criminals are doing it. Case one: Porscha Kyles worked as a clerk at the Broward courts and was using people’s driver license numbers to obtain their information and then selling the information a man who intended to use the information in a tax refund scheme. Since she was able to name the man who she sold the stolen information to, he most likely did not get to use the information for his scheme. Had investigators not caught on so quickly to Ms. Kyles stealing of information it could of have a great impact on victims when they filed their yearly income taxes. They would have been notified that a return had been filed in their name already, plus there would have been deductions that could have caused an audit on the victim.
| Question : | (TCO A) Who are the primary victims of financial statement fraud? | | | Student Answer: | | Employees and middle management. (Incorrect- While they are negatively affected by fraud, they do not rely on financial statements to the same degree as stockholders.) | | | | Organizations that buy goods or services. (Incorrect- This is the victim of vendor fraud.)
- Securities fraud : Madoff was arrested by the Federal Bureau of Investigation (FBI) on December 11, 2008, on a criminal charge of securities fraud. Fraud occurs when a wrongdoer deceives another person out of money, property, or something else of value. Four elements are required to find a fraud: 1- The wrongdoer made a false representation of material fact. Madoff used Ponzi Schemes which is a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from profit. The Ponzi scheme usually offers abnormally high short-term returns in order to entice new investors.
I believe that the victims should be held responsible for making the decision to invest into Fox’s operation. Just like on Wall Street, there are risks investing and you are not guaranteed profit. I also believe that a few of the victims are not of good character. Ms. Hoe for instance, had earned a living as a prostitute and by trafficking money until becoming the beneficiary on her sons life insurance policy whom was then murdered coincidentally.
In order to hide these illegal transactions, J&J used “sham contracts, off-shore companies and slush funds.“(Fox 1). According to the SEC, these bribe payments date back to 1998. In addition to these bribe payments, J&J subsidiaries were also accused of paying kickbacks to the Iraqi government in efforts to obtain contracts for the United Nations Oil for Food Program. Secondly, the fraud theories that I believe tie to the behavior of the culprits are the elements that make up the fraud triangle. Perhaps there was a perceived opportunity to increase sales if they offered bribe payments and travel gifts.
The purpose of the SOX Act in response to the fraudulent and misleading activities of large corporations such as Enron, Health South, Xerox, Global Crossing, and almost one thousand publicly traded companies. Fraud is defined as “a dishonest act by an employee that results in personal benefit to the employee at a cost to the employer” (Kimmel, Weygandt, & Kieso, 2011). The afore mentioned companies and many others committed fraud when they willingly published false and/or deceptive financial statements making their companies look like they were making huge profits, therefore causing their stock prices to soar and enticing the public to by more and more shares of their companies. Unfortunately, when the truth came out, the fraudulent actions of a few resulted in the loss of almost $5 trillion of stock market value and an undetermined amount for stockholders. Because of this fraudulent action, Congress had no choice but to intervene and pass legislation that would curtail this illegal
Their accounting system used corrupt measures to show profits. By using special-purpose entities (SPE), they could move assets through their books showing profits. They hid losses from its shareholders and employees. Integrity was thrown out the window by its top managers. Jeff Skilling created performance evaluation process for all Enron employees called “rank and yank”.
The central compliance issue that they are working to curtail is their many violations of the Servicemembers Civil Relief Act (SCRA). Since 2003, the company has undergone scrutiny about overcharging servicemembers and recently returned servicemembers from active duty, which caused many of the servicemembers to face the possibility of a bank foreclosure. When this issue was brought to the company’s attention, J.P Morgan Chase identified two problems. The first was the fact that four thousand-five hundred servicemembers were charged interest and fees that were way above the regulatory cap. Secondly, J.P Morgan Chase
People who are already wealthy and commit white-collar crimes should not be let off easily. They hurt innocent peoples pockets while pocketing money for themselves. Prison time is like a death sentence to those who grew up having everything they ever wanted. Once people become greedy and start committing crimes like Martha Stewart then they deserve to get punished for stealing money. Prison rehabilitates criminals and once freedom, money and life’s luxuries are taken away from white-collar criminals then they will learn that committing such crimes are not worth prison time.