| #532 - January 7, 2008 |
 | |  | |  | |  | |  |
| #532 Updated: 1/7/08 4:06 p.m. Stalking embezzlement BangorNews.com | 1/7/08 | Staff Writer The conviction of a bookkeeper whose thefts drove an Old Town nonprofit agency close to bankruptcy focuses new attention on an old and persistent problem. Katherine Ratliff, 39, was charged with stealing nearly $84,000 from Adoptive & Foster Families of Maine. Prosecutors said she wrote checks to herself, used agency credit cards for personal purchases and paid her $1,000-a-month rent with agency checks. She had a string of aliases and a history of past offenses elsewhere. In a plea bargain, she was sentenced to six years in prison with all but 18 months suspended, two years of probation and payment of $10,000 in restitution. Most employee thefts follow a common pattern. First of all, embezzlement is easy. Employers usually trust their employees and often don’t supervise them and check their work adequately. Ruth Crane, the president of Auditors Inc. in Pikesville, Md., says employers should keep in mind the "10-10-80 rule": Ten percent never steal, another ten percent always steal and 80 percent steal when they feel the need and see an opportunity. Greed is a common motivation, but compassion may play a part, as when a relative or friend needs financial help. Embezzlement often starts innocently and on a small scale, by skimming a few dollars, say, to pay a credit card debt, with the intention of paying it back. But one thing leads to another. Addictive drug abuse, gambling and even shopping can be the trigger. Auditors Inc. is one of many outfits that, for a fee, conduct a forensic bookkeeping examination. Short of that, however, it offers a free download of "Embezzlement 101: How to Embezzle From Your Employer and NOT Get Caught," a 14-page handbook of helpful tips on detection and prevention of employee theft. Its Web site, www.embezzlement.com, also provides some horror stories and a model of how not to interview a prospective bookkeeper. (For example, don’t just accept inadequate references.) Some myths and misconceptions: Well-paid employees are less likely to steal. Newer employees steal, while senior employees can be trusted. Some facts and reality: More than not, employee theft goes undetected. And, when detected, it often goes unreported and unprosecuted. Businesses are embarrassed and hate to admit they’ve been had. But when an embezzler gets off easy, it can lead to "serial embezzlement." He or she steals on the next job to make restitution for thefts on the previous one. Embezzlers are not the only people to blame. Inattentive employers also are at fault. So are boards of directors, who are not only responsible but also can be found liable. Specialists sum up the matter by concluding that, although safeguards can help, the only way to prevent embezzlement absolutely is to do the bookkeeping yourself. D.C. tax embezzlement suspect indicted examiner.com | 1/7/08 | Associated Press WASHINGTON - One of the suspects in the multimillion-dollar D.C. tax embezzlement case has been indicted. Federal prosecutors say a federal grand jury in Maryland indicted Ricardo Walters on one count of receiving stolen property and aiding and abetting. He is a relative of Harriette Walters, who is charged with leading a group of city tax office employees that allegedly wrote and cashed fake property tax refunds for companies that didn't exist or weren't owed a refund. Prosecutors estimate at least $20 million was stolen over at least seven years. Ricardo Walters is charged with receiving one stolen refund check for almost $376,000 in 2006. Sears accused of violating consumer fraud law reuters.com | 1/7/08 | Karen Jacobs ATLANTA (Reuters) - Retailer Sears, Roebuck & Co has been hit with a lawsuit seeking class- action status that alleges a company Web site compromises customers' private information. The suit, filed last Friday in Circuit Court in Cook County, Illinois, states that the retailer's managemyhome.com site allows users to view purchase histories of Sears customers by entering public information such as a name or street address, in violation of a state Consumer Fraud Act that forbids "unfair or deceptive" practices. A Sears spokeswoman declined to comment on the lawsuit on Monday. Sears, Roebuck is a unit of Sears Holdings Corp, which is based in Hoffman Estates, Illinois. But in a statement e-mailed to Reuters on Friday, when a consumer blog featured an entry raising concerns about the Sears site, the retailer said it had "turned off the ability to view a customer's purchase history on Manage My Home until we can implement a validation process that will restrict access by unauthorized third parties." The complaint, which seeks class-action status and millions in damages, said the data available at the Manage My Home site could be used to commit fraud and obtain even more sensitive customer data such as social security numbers. "There's so many scary situations where people could easily trick you into getting more personal information or gain access to your home for improper purposes," said Jay Edelson, partner at KamberEdelson LLC, which filed the lawsuit. Bid-Rig Scheme Involved Marsh, Suit Claims CFO.com | 1/7/08 | Stephen Taub and David McCann Insurance broker Marsh & McLennan asked Great American Insurance Group to rig a bid to a potential customer, according to a lawsuit filed by Massachusetts Attorney General Martha Coakley, though Marsh is not named as a defendant. According to the complaint, Great American, at Marsh's request, in 2004 submitted a falsely inflated quote to semiconductor maker Analog Devices in order to make another insurance company’s lower bid look competitive. In return for this favor, Marsh allegedly steered another one of Analog Devices’ insurance policies to Great American at a pre-determined price. Coakley asserted that insurers including Great American paid Marsh "lucrative contingent commissions" based on the volume of business Marsh placed with them. The Massachusetts Attorney General's office declined to say why Marsh was not named as a defendant. Marsh did not return a phone call seeking comment. On Jan. 2, Travelers Cos. agreed to pay $6 million to settle a case brought regulators in eight states and the District of Columbia, who claimed Travelers paid fees to Marsh to win commercial property/casualty accounts and failed to disclose the payments to clients, according to published reports. The case stemmed from an investigation started in 2004 by then-New York State Attorney General Eliot Spitzer, who alleged that Marsh steered clients to insurers with which it had lucrative payoff agreements, and that the firm solicited rigged bids for insurance contracts. Marsh agreed in February 2005 to pay $850 million to settle charges of fraud and anti-competitive practices. About the new lawsuit, Coakley said, "Bid rigging is a very serious violation of Massachusetts law. We allege that Great American was a knowing participant in a scheme to defraud Analog Devices." Great American denied any wrongdoing. "Great American's conduct in issuing that quote was lawful," the company said in a statement. It also said that it had tried to reach an out-of-court resolution but couldn't because of the attorney general's "unreasonable" demands. Professional Risk Brokers Inc., a subsidiary that provides coverage quotations to brokers on Great American's behalf, was also named as a defendant in the lawsuit. The complaint seeks restitution, attorneys’ fees, civil penalties, and a court order prohibiting the company from engaging further in unfair and deceptive business practices. PRISON FOR PHONY BILLIONAIRE FINANCIER FBI.gov | 1/7/08 | Press Release SACRAMENTO--United States Attorney McGregor W. Scott announced today that RANDALL BERT FOSHIE, 58, of Roseville, who also uses the name BERT RANDALL FOSHIE, was sentenced today by United States District Judge Morrison C. England, Jr., to 46 months in prison. FOSHIE pleaded guilty to one count of felony mail fraud on October 18, 2006. This case was the product of an investigation by the Federal Bureau of Investigation. According to Assistant United States Attorney Matthew Stegman, who prosecuted the case, FOSHIE, doing business as Monument Investment and Development, Inc., admitted in court during his guilty plea that he had defrauded at least 13 people from whom he took fraudulent "up-front" or "commitment" fees, with promises of obtaining multi-million dollar financing or electric car sales dealerships. As a result of his scheme to defraud, FOSHIE obtained over $350,000 from his victims. None of the money has been recovered. FOSHIE admitted at his plea hearing that he held himself out to his victims and others as a billionaire, by representing that he was looking to buy multi-million dollar homes in the Sacramento area and an electric car company in Oregon. He further admitted he falsely represented he had recently sold a number of radio stations in Southern California. He claimed he was negotiating the purchase of Nevcar, an electric car research and development firm. He further claimed to be negotiating to buy Nevcar’s intellectual property rights and 704 acres in Oregon on which he would build a plant to manufacture the electric cars. FOSHIE admitted that he never actually made any of the purchases, and never had the money or means to make any of the purchases. FOSHIE further admitted that he added to the impression that he was wealthy by traveling to Oregon and holding a meeting with government officials in which he falsely claimed to have had two billion dollars to invest in Douglas County, Oregon, in order to buy and operate Nevcar. He also admitted that he made false statements to his victims in order to convince them that he was legitimate, including that his family made a fortune by inventing the metal eye rings in tarps; he was a former law enforcement officer; he was an attorney; and formerly counsel for the Walt Disney Company. FOSHIE took "up-front" and "commitment" fees, generally between $5,000 and $50,000, from people who wanted to acquire multi-million dollar real estate. He also offered investments in electric car dealerships. He represented that each investor was required to pay $25,000 up front, and that he would build the car dealership. Once built, the investor would pay the defendant another $225,000 to acquire the dealership. FOSHIE had previously been convicted of mail fraud and served a federal prison term in the mid-1990s. The case stemmed from a scam in which FOSHIE told potential buyers he could get them great deals on cars that were part of a corporate fleet. In that case, he took "up front" money totaling $442,348 from his victims with promises that he would then deliver the cars. Instead, he took the cash and never furnished the cars. When victims of this latest fraud found out about the prior conviction and confronted FOSHIE, he claimed the person with the criminal record was RANDALL "BERT" FOSHIE but he was RANDALL "BURT" FOSHIE. In truth, FOSHIE was not wealthy. In fact, in June of 2006, he filed for bankruptcy, stating in his bankruptcy petition that he had debts totaling $30,664 and income of only $636 a month in federal disability benefits. Just after filing for bankruptcy, the defendant began his scheme of convincing people he was a billionaire. The government advocated for a sentence at the top of the federal sentencing guidelines for the offense, noting that the offense was almost identical to the defendant’s two prior federal convictions for fraud-related activity and that his prior prison terms had not deterred him from continuing to engage in fraud. In addition to a 46 month prison sentence, which was the top of the sentencing guidelines range for the offense, Judge England also ordered the defendant to pay $351,000 in restitution to victims, and upon release from prison, to be on supervised release for 3 years. ________________________ |