However, with the persuasion of a few willing individuals along with his high ranking position in the Navy, he was able to orchestrate this scheme to perfection before ultimately getting caught in February of 2011. This scheme took place over a twelve year period from 1999 to 2011 when he used his position in the Navy to direct Russell Spencer, a computer specialist, to submit millions of dollars in fraudulent invoices to Navy contractor Advanced Solutions for Tomorrow. This money was disbursed amongst Mariano and close relatives over a long period of time. Mariano has admitted that little to no work was done for Spencer to receive this money that ultimately ended up in the pockets of Mariano. Ralph has admitted to receiving $3,081,671 of Navy funded checks from Spencer.
His sense of over-entitlement led him to be easily manipulated into killing his good friend and leader King Duncan. Duddy likely inherited his love of wealth from members of his family. He even shows movies he dislikes as a result of his desire for money, seen in the quote "Duddy didn't say a word all through the screening but afterwards he was sick to his stomach." (159) While his father does not place a large importance on wealth, his extremely wealthy uncle proves to have a lasting effect on his development as Duddy is instilled with a desire for wealth. Likewise, Macbeth is easily tempted into killing and manipulating many simply due to the desire for power and social praise.
Adelphia Communications – Corporate Scandal Adelphia Communications – Nature of the business Adelphia Communications is a cable television company that had its headquarters in Greenwood Village, Colorado. It was the fifth largest telecommunications company in the US with annual revenue of $3.61 billion. Founded by John Rigas in 1952, it made rapid strides before accounting scandals ripped the company apart. It was eventually sold to Time Warner Cable, Comcast and Pioneer Telephone in July 2006. Downfall of the company In 2002, Adelphia disclosed that it had $2.3 billion in off balance sheet loans and this money was used by the Rigas family for their expenses.
In 2001, Zappos more than quadrupled their yearly sales, bringing in $8.6 million. In 2002, they opened their own fulfillment center in Kentucky. In 2003, Zappos reached $70 million in growth. In 2004, Zappos did $184 million in gross sales. Over the next three years, Zappos doubled their annual revenues, hitting $840 million in gross sales by 2007.
The purpose of the loan was to buy personal property. The loans were off-the –books. Ebbers persuaded WorldCom’s board of directors to provide him corporate loans and guarantees in excess of $400 million to cover his margin calls. The board hoped that the loans would turn aside the need for Ebbers to sell substantial amounts of his WorldCom stock, as his doing so would put further downward pressure in the stock's price. However, this strategy ultimately failed and Ebbers was ousted as CEO in April 2002.
Krispy Kreme Doughnuts, Inc. Krispy Kreme Doughnuts began as a single doughnut shop in Winston Salem, North Carolina in 1937. By the start of the new millennium, Krispy Kreme was not only able to boast iconic status but nearly had a cult-like following. Less than a year after its initial public offering in April 2000, Krispy Kreme shares were selling for 62 times earnings. As it had a tremendous increase in bottom line and brand recognition, it formulated an aggressive strategy to expand. Its shops tripled from 2000 to 2004, with 427 stores in 45 states and four foreign countries.
In February 2002, eBay paid 950 million to acquire Taiwan’s largest auction site Ubid and Bid, and then changing the name to Taiwan eBay in June 2002. However, a few months later, the company failed because the system of eBay did not fit in Taiwan and they could not compete the market share with Yahoo! Kimo Auction. In September 2006, Taiwan eBay decided to become joint venture with PChome and founded Ruten Auction website. The percentages of shareholders of the company are 65% and 35% for PChome and eBay respectively.
Brief overview of WorldCom’s case and general discussion of its fraud nature: Beresford, Katzenbach and Jr (2003) stated that, from 1999 until 2002, a few executives at WorldCom perpetrated accounting fraud that led to the largest bankruptcy in history. The principle business strategy of its CEO – aggressive growth through acquisitions underlined its collapse and eventually imposed pressure to management to commit fraud. In fact, WorldCom’s fraud was a consequence of a set of complex factors, including the existence of dominant senior management, structurally weak internal controls, inadequate audits by Arthur Andersen, the poor oversight of the Board, and pressure from Wall Street’s expectation, etc. The large scale collapses of WorldCom and Enron triggered immediate remedies of corporate governance, essentially the Sarbanes-Oxley Act, which aimed to solve the issue of “lack of confidence” in the reported financials. WorldCom’s fraud was an intentional misconduct of the perpetrated senior management that results in an $11 billion material misstatement in the financial statements via two principle forms: reduction of the reported line costs and exaggeration of reported revenues, in order to create an image of increased earnings and revenue and hold the line costs lower than the industry average rather than indicate the truth and fairness of WorldCom’s wealth and progress (Beresford et al, 2003).
On July 22, 2002, MCI WorldCom (hereafter known as WorldCom) filed for Chapter 11 bankruptcy, the largest filing in U.S. History at the time (Beltran, 2002). It is clear that senior-level executives were holding the reigns throughout the elaborate and, what one analyst called, “incredibly elegant (Simons, 2002),” scam, intended to defraud investors and Wall Street. To someone not familiar with accounting processes, the case becomes difficult to understand. The executives were falsifying accounting entries, both creating accounting line items that did not exist and counterfeiting actual entries to inflate earnings (Boatright, p.44). The 1990s proved to be an excellent decade for WorldCom, particularly after the 1997 purchase of MCI, which was the largest national long-distance phone carrier at the time, and resulted in the largest corporate merger in the history of the United States.
Name: Rosario Carbonell Subject: Financial Accounting Professor: Diana Dela Vega Date: September 9, 2013 Title: Reaction Paper: Enron Case Background: Enron Company was established in 1985 by Kenneth Lay in Houston, Texas and was viewed as one of the most successful companies in America before the start of its downfall in 2001. It was considered as the seventh largest company in America and was named as America’s most innovative company for several consecutive years (1996-2001). Its core business remained to be the transmission and distribution of power but is also known to have branched out into non-energy related industries a few years from the date of its founding. Other fields it ventured into were: Internet bandwidth, off-shore investments, risk management and insurance for seasonal business. It was said to be a source of its phenomenal growth and tremendous increase in money earnings.