This stock photo is incredible. It really has nothing to do with the post, just needed an excuse to use it.
It’s been a while since we’ve done an Accountants Behaving Badly megapost (381 days ago, actually), here’s some bad behavior you may have missed. As usual, it’s mostly terrible controls and the resulting embezzlement, this time there’s also a pervert in here so that’s something different. The stories below are no older than 120 days.
Twice-Convicted Accountant Is Charged With Embezzling More Than $1.1 Million From Employer [U.S. Attorney’s Office, Western District of North Carolina]
A federal grand jury in Charlotte has indicted Mandy Deann Urban, 47, formerly of Charlotte, with wire fraud, for allegedly embezzling more than $1.1 million from her employer, announced Dena J. King, U.S. Attorney for the Western District of North Carolina.
According to allegations in the indictment, from January 2019 to June 2022, Urban was employed as a senior staff accountant for a Charlotte-based company. In that capacity, Urban was responsible for maintaining the company’s general ledger, preparing financial statements, and reconciling the company’s accounts payable and receivable and bank statements.
According to allegations in the indictment, Urban used the embezzled funds to pay for personal expenses, including tens of thousands of dollars for mortgage, car, education, and vacation expenses, and to buy cryptocurrency. Additionally, it is alleged that Urban transferred significant amounts of embezzled funds to family members.
Court records show that Urban is currently in custody in Florida, serving a prison sentence for defrauding a previous employer of more than $283,000, and using the embezzled money to pay for court-ordered restitution for a prior embezzlement.
Palos Hills Accountant Indicted In $7.8M PPP Loan Fraud: Feds [Patch]
Two local businessmen, including a business owner in Joliet, have been indicted on federal charges after prosecutors said they fraudulently obtained nearly $7.8 million in small business loans under the CARES Act, the U.S. Attorney General’s Office for Northern Illinois announced on Wednesday.
Tracy Mitchell, the owner of House of Deals, Inc., and House of Furniture and Mattress, Inc., along with Palos Hills accountant Sharhabeel Shreiteh, were indicted on charges on Tuesday, claiming that they reportedly engaged in fraud in connection with the Payroll Protection Program that was created to help small businesses during the COVID-19 pandemic, federal prosecutors said.
In the indictment that was unsealed on Tuesday, prosecutors allege that Mitchell and Shreiteh allegedly recruited independent business owners, self-employed workers, and other businesses to provide them with personal information, bank statements, and other documents which they then submitted for PPP loans, prosecutors said.
The indictment states that the loan applications contained numerous misrepresentations and false statements that inflated the applicants’ payroll, income, and other expenses. In exchange for preparing and submitting the fraudulent applications, Shreiteh and Mitchell received at least $1,000 to $4,000 per successful loan, the indictment states, prosecutors allege.
TPB slaps 5-year ban on accountant involved in $26m fraud [Accountants Daily]
The Tax Practitioners Board has slapped a five-year ban on a Sydney accountant charged with stealing $26 million through his firm to fund a lavish lifestyle and gambling addiction.
The board said Benjamin Carter, 37, had breached five items of the tax agent code of professional and was no longer a “fit and proper person”.
Chair Peter de Cure said Mr Carter, who is currently on bail pending the remainder of his trial, posed an “unacceptable” risk to the public.
“Mr Carter’s conduct was serious, fraudulent, and demonstrated dishonesty and deception. His actions undermined the integrity of the tax profession and caused detriment to his clients and the ATO.”
“We were not willing to let Mr Carter continue practising.”
The long-running TPB investigation found that Mr Carter lodged false BAS and amendments for unwitting clients and lied about their tax returns and debts that did not exist.
He spent $350,000 in client refunds and ATO payments on himself and misappropriated $440,000 intended for share purchases on behalf of clients.
In addition to defrauding his clients, the TPB said that Mr Carter did not meet his own tax obligations, citing failures to lodge tax returns, activity statements, superannuation guarantees and SMSF returns on time.
He also failed to pay over $1 million in outstanding tax debts he and his accounting firm, Carter’s Tax Advisory, owed.
Woman Facing 1,300 Felony Charges for Embezzlement Scheme in Upper Gwynedd, Police Say [North Penn Now]
A Berks County woman is facing more than a 1,300 felony charges after she allegedly embezzled more than $375,000 from the Gwynedd Office Condominium Association (GOCA).
Police said GOCA is a group of tenants that occupy suites at 311 Sumneytown Pike, and they hired Butt as their accountant in 2009 to maintain their account and pay bills for sewer, electric, landscaping, cleaning, and other expenses.
When initially confronted by GOCA, who requested access to the Quickbooks account, Butt allegedly claimed her computer wasn’t working and made other excuses to deny access, police said. She later wrote GOCA a check for $7,918 claiming it was compensation for her mistakenly writing payments out of the GOCA account instead of her personal account, police said.
Agoura Hills Accountant Pleads Guilty to Lying to Federal Officials Investigating Illegal Gambling Operation [U.S. Attorney’s Office, Central District of California]
An entertainment industry accountant pleaded guilty today to a felony charge for lying to federal law enforcement officials about his role in laundering illicit proceeds from an illegal gambling operation run by a former minor-league baseball player and which involved professional athletes.
William Eric Fulton, 59, of Agoura Hills, pleaded guilty to one count of making false statements.
According to his plea agreement, Fulton and his company provided bookkeeping, accounting, and tax preparation services for Wayne Joseph Nix, 46, of Newport Coast, a former minor-league baseball player who for nearly 20 years ran an illegal bookmaking business.
Beginning no later than 2011, Fulton was aware that Nix ran an illegal gambling business. Nonetheless, Fulton knowingly laundered Nix’s illegal gambling proceeds by continuing to provide financial services to Nix and providing access to the financial system. Specifically, Fulton continued to transfer money between accounts, issue checks and wires to Nix’s gambling clients who won large bets, and helped Nix obtain bank loans to facilitate the gambling business. Between 2010 and 2020, Fulton charged Nix approximately $336,645 in professional fees for his financial services.
Accountant charged with falsifying signatures on audit documents [Australian Securities & Investments Commission]
Stephen Robert Allen, the sole director of K.H.N Holdings Pty Ltd trading as Alkemade & Associates, has been charged on indictment in the County Court of Victoria in Melbourne with criminal offences for falsifying the signatures of registered company auditors on multiple documents.
It is alleged that Mr Allen used false signatures in connection with the audits of 12 clients between July 2015 and November 2020 and he also falsified a form lodged with ASIC in February 2021.
The false signatures were applied to various documents, including audit opinions, auditor independence declarations and independent audit reports and review reports. It is alleged that those documents were included in annual reports and other financial statements that were lodged with ASIC and various other regulatory bodies.
Mr Allen has also been charged with falsifying a document by purporting to be a different registered company auditor and lodging that document to obtain consent from ASIC to resign as an auditor.
Drivers overcharged, police accountant negligent in car towing rip-off, audit shows [The Wichita Eagle]
About a third of the time, towing companies contracted to the city have been padding their bills by overcharging motorists in a variety of ways, according to a recently completed audit that was ordered by the City Council in March. And that’s on top of the already generous fees they’re actually allowed to charge.
The audit also showed the system was badly mismanaged by the Police Department. Towing transactions were supposed to have been reviewed on a monthly basis by a police accountant to ensure the charges were legitimate. “The accountant in WPD was not reviewing the monthly reports, nor the invoices submitted by the tow companies,” the audit report said. “This employee is also no longer an employee of the City of Wichita.” Not only were the invoices not being reviewed for accuracy, a lot of them couldn’t even be found. “Most of the monthly reports and invoices were not located in the employee’s office or on their PC,” the report said. “They had to be requested from the tow companies again. Therefore, there were no controls that could be evaluated.”
Flinchum pleads guilty to misdemeanor Sexual Abuse [Commonwealth Journal]
Terry Flinchum, a Certified Public Accountant (CPA), was accused by two victims in separate incidents of touching them inappropriately while they were in his home office on White Tail Run.
Both women are in their 30s, and both had been going to Flinchum for at least three years for tax preparation.
In entering his guilty plea, Flinchum read a written statement to the court taking responsibility for his actions.
“I acknowledge that I made sexual contact with [the victims],” Flinchum said. “The contact was brief and occurred on the outside of the clothing. I did so without their permission. I sincerely apologize to both women for my behavior. It was inappropriate.”
Former CFO Pleads Guilty to Embezzling More Than $3 Million from Employer [U.S. Attorney’s Office, District of Minnesota]
David Efrem Katz, 56, worked for D&A from approximately 1998 to 2017, starting as an accountant and eventually becoming CFO. As CFO, Katz had authorization to open credit cards in D&A’s name and use those credit cards for business expenses. However, Katz was not authorized to charge personal expenses to the cards, take out loans on D&A’s behalf without the owner’s approval, or use funds belonging to D&A or its HOA clients to pay his personal expenses.
Beginning in at least 2012 and continuing into 2017, Katz embezzled over $3 million from D&A and its HOA clients. Katz, who as CFO of D&A was responsible for payroll, paid himself significantly more than his agreed upon salary. Between 2011 and 2017, Katz paid himself $6,500 every two weeks as a salary despite his base salary never being more than $47,500 annually.
Katz also reimbursed himself for personal expenses and business expenses he never actually incurred. Katz paid himself between approximately $6,000 and $10,000 in reimbursements every two weeks. He labeled these payments as miscellaneous earnings and reimbursements, “recovery loans,” bonuses, and commissions.
