Divorce Fraud - Hidden Income - Find It!

It's always stunning to me how many families represent almost no taxable income but live in splendor in vast palatial estates in fancy neighborhoods. They often have a matched pair of incredibly expensive German cars in the driveway. Their kids go to private schools and the family passports are stamped from a variety of exotic getaways.

Then a separation prior to divorce occurs. The in-spouse (controller of the business) represents to the family law courts almost no income. The out-spouse is enraged, but can't prove the family income because they have limited records. Doomed to a life of despair among the hoi poloi (great unwashed ... aka ... common folk), they have to find a forensic accountant to save them.

Tracy Coenen, Forensic Accountant, CPA and CFF (Certified in Financial Forensics by the AICPA), has written an excellent article about how to assess income available for support via lifestyle analysis.

City of Compton Fraud ... You're Kidding!

Now the Mayor of Compton alleges fraud. Who knew?

It stopped the City from getting a line of credit to handle the $41mm deficit.

Good luck getting an opinion from the auditors. Apparently the last audit had a "going concern clause". Here's hoping the auditor gives an opinion (rather than disclaiming). Oh ... what a mess the auditors will find. Once they are alerted, they'll have to turn over all sorts of rocks and boulders and still be worried they didn't find everything.

If this was a political maneuver, it was pretty bonehead. Apparently, the Mayor is alleging that the reason for the deficit is "fraud, waste and abuse".

I'm reasonably certain that fraud, waste and abuse has something to do with it. I'm more certain that a reasonable accounting system, with reasonable over-site would clear up the FWA.

First 5 LA gets blasted for crappy accounting

Can I say "crappy"? Yes, I believe I can. And did. Apparently, First 5 Los Angeles has accumulated $800 million of taxpayer money that they're sitting on. They apparently spend $180 million per year but can't quite spend the whole amount they get ... so it sits in the bank. THAT'S OUR MONEY PEOPLE!

"An audit by Harvey M. Rose of San Francisco found First 5 LA's commission was unable to monitor money that was being spent "since monthly programmatic expenditures are not presented relative to a budget." Auditors also concluded the agency was overstaffed while under-spending on programs for children."

UNABLE TO MONITOR MONEY? That is synonymous with "crappy accounting"

Montebello blows $31 million and now broke.

Ignoring the law, the City of Montebello spends restricted money on anything they want.

After the State Controller audit, they have found they're broke. They're trying to get a loan so they don't run out of cash in the fall.

a GIANT payroll scam

Sorry ... couldn't help myself. Apparently, the payroll manager of the San Francisco Giants baseball team had sticky fingers.

In about a year, the enterprising young lady managed to allegedly embezzle $1.5mm. This appears to be a rate of $125,000 per month.

Note that internal audit, external audit or the Giants themselves did not catch this. The fraud was uncovered when Bank of America sent a confirm request to source the large deposits into Ms. Payroll Manager's (Ms. PM) personal bank account. Ms. PM had forged a letter to the B of A claiming that this money was a bonus for helping the Giants win the World Series.

Apparently the FBI was involved. Everybody loves baseball!

Minkow back to the Clink!

ZZZ Best superstar Barry Minkow, King of the Ponzi's, became a preacher, a self-appointed fraud detector and finally a stock manipulator. Now he gets 5 years in the clink. for securities fraud.

A good friend told me once ... the way someone does something, is the way they do everything. (translation ... Leopards don't often change their spots.)

Stealing From A City - How To Do It

It's all about family. Have a relative elected, get appointed to commissions, non-profit's etc. and the checkbook is wide open.

The City of Bell was small stuff. You need to look at the City of Detroit and the shenanigans they pull there. Kwame Kilpatrick is the "deposed mayor". While he's in jail, his cousin is still looting the city.

About Kwame, from Wikipedia ...

Kilpatrick's mayorship was plagued by numerous scandals and rampant accusations of corruption, with the mayor eventually resigning after being charged with ten felony counts, including perjury and obstruction of justice. Kilpatrick was sentenced to four months in jail after pleading guilty to reduced charges, but with good time awarded to county jail inmates in Michigan, he was released on probation after serving 99 days. On May 25, 2010, he was sentenced to 18 months to 5 years in prison for violating his probation.^[4] He is currently in Federal Correctional Institution, Milan, a federal prison. After he was indicted in federal court for additional crimes related to alleged misuse of his campaign funds, Kilpatrick lobbied for a transfer from the Oaks Correctional Facility Michigan Department of Corrections facility in Manistee Township, Michigan, where he was prisoner number 702408. Kilpatrick is Federal Bureau of Prisons #44678-039. He is also under a new 38-charge felony indictment on additional corruption charges, in what a federal prosecutor called a "pattern of extortion, bribery and fraud" by some of Detroit's most prominent officials.^[5]