Misdirected Due Diligence and the Long Con

Repeat after me: Investigate the promoter before you investigate the opportunity! In 2009 a Kentuckian named Gary Milby was charged with a $36 million fraud involving oil and gas investments utilizing a business entity named Mid-America Oil & Gas. More than 250 victims suffered significant losses, and Milby is currently serving 20 years in prison. One of the investors, lawyer …

Bad Actors On Center Stage

Most people can pick out a bad actor in a good production. But if you can’t, movie and play critics will. They usually tell the world well before one might waste a couple hours and 30 bucks on popcorn, drinks, and an incompetent thespian. But a bad actor as defined by the SEC in Rule 506? Not so much. These …

Pants On Fire!

Liar..Liar. You’ve undoubtedly met a few. Last month we met one that’s taken lying to extremes. One of our clients in the legal industry met a job applicant that interviewed so well they wanted to hire him on the spot. We were requested to conduct the employment screening ASAP and were sent a photocopy of the applicant’s signed release, passport, …

Hiding in Plain Sight

In early 2012 Wendy Steen Fischer was hired as a bookkeeper for an Athens, Georgia medical school New Horizons. The school ran a background check before hiring her and she reportedly “came back clean“.  In June 2013 she was arrested for stealing at least $50,000 from her New Horizons. Just another case of a good bookkeeper gone bad? Not exactly. …

Crowdfunding: A Huckster’s Dream Come True

Anyone who says “crime doesn’t pay” never discussed their views with a fraud investigator. Crime DOES pay, and profits come from those who don’t perform proper due diligence. Greed and accelerated or unrealistic wealth expectations are present in most non-traditional investment failures. Crowdfunding’s lower due diligence requirements, smaller investment size,  wider qualified investor pool, and still-developing regulatory oversight will translate …

A Correlation Between Fraud and Traffic Tickets?

The New York Times on 7/25/13 published a fascinating article about the correlation between minor offenses and corporate fraud. Read it here: Intersection of Fraud and Traffic Violations – NYTimes The evidence may indicate that boards should routinely run background checks on top officers and on those being considered for such positions. If someone does have a bunch of traffic …