Larry’s Laws of Larceny- Law 7: The Petty Thief Always Gets Greedy

Larry Beebe, CPA

Most people who steal money start with small amounts. They rationalize by saying that they are only borrowing the money and they intend to pay it back. When they aren’t caught they rationalize that the entity they are stealing from didn’t even miss the money so it is okay to take more. They often think that, after all, they are entitled to the money either because they are underpaid or for other reasons.

In one situation a CPA […]

October 6, 2015 Accounting, Audit, Forensic Accounting Read more...

Larry’s Laws of Larceny- Law 6: You Can’t Always Tell a Phony Document by its Looks

Larry Beebe, CPA

When is a check real and when is it a phony? Sophisticated copying and printing techniques can create fake documents that can fool the experts.

A plan employee, check in hand, goes inside a liquor store to cash his paycheck. A man outside the store offers him $100 to “borrow” his paycheck. Within minutes the crook has a perfect duplicate of the check. On Saturday morning the crooks, armed with phony copies of the checks, attempt to cash […]

September 29, 2015 Accounting, Audit, Forensic Accounting Read more...

Larry’s Laws of Larceny- Law 5: Kiting Isn’t a Windy March Pastime

Larry Beebe, CPA

Kiting, or check kiting, is a scheme where a person deposits checks back and forth between banks. The fraudster steals and covers up the theft by continuing to deposit checks back and forth between accounts. The amount of the checks deposited is often so large that the amount stolen appears small in comparison. In one recent case the checks deposited back and forth totaled $114 million to cover a theft of approximately $1.6 million.

To prevent kiting the […]

September 22, 2015 Accounting, Audit, Forensic Accounting Read more...

ERISA Plans: Recovery Possible If Funds Expended?

Ashleigh Hall, CPA

Who’s Involved?

Montanile
Vs.
Board of Trustees (135 S. Ct. 1700)

What Happened?

In 2008, Robert Montanile was in an accident and incurred approximately $120,000 of medical expenses, which were covered by the National Elevator Industry Health Benefit Plan (the Plan). Upon receiving a $500,000 settlement for the incident, Montanile paid legal fees but did not reimburse the Plan. The Plan filed a lawsuit to recover its expenditures for the accident, specifically by enforcing a lien provision that is found in its […]

September 19, 2015 Accounting, Benefit Plan Accounting Read more...

Larry’s Laws of Larceny- Law 4: Lapping has Nothing to do With the Daytona 500

Larry Beebe, CPA

Lapping is a fraudulent scheme which allows an individual to steal cash from an organization. It can occur in at least two ways in a multi-employer benefit plan.

One way involves a theft of employer contributions. An employee of the benefit plan steals an incoming employer contribution, converts it to cash, and steals the cash. The thief covers up by crediting the employer’s account with the next employer’s payment. The thief then steals again and covers up in […]

September 15, 2015 Accounting, Audit, Forensic Accounting Read more...

Larry’s Laws of Larceny- Law 3: Double Entry Bookkeeping Doesn’t Produce a Double set of Books

Larry Beebe, CPA

This statement is a play on words. Double entry bookkeeping is the type of accounting used in the business world by everyone.

A double set of books has nothing to do with double entry bookkeeping. An entity would have two sets of books to avoid paying taxes or for some other criminal purpose. In an employee benefit plan, the second set of books might be used to avoid the obligations called for by the collective bargaining agreement signed […]

September 8, 2015 Accounting, Audit, Forensic Accounting Read more...

Do you Carefully Check Your 401(k) Plan Statement?

John Merchant, CPA, CFE

Many individuals who participate in 401(k) plans sponsored by their employer do not carefully check their accounts on a regular basis.  A recent report from the United States Department of Labor (DOL) shows that participants should regularly check their statements, and check them carefully.  The DOL launched an investigation of the administration of a plan in California as a result of complaints from participants.  As a result, the former owner of the sponsor company was convicted […]

September 1, 2015 Accounting, Benefit Plan Accounting Read more...

Hiring a Payroll Auditing Firm, Question 10: Do you Charge a Flat-Rate Fee Per Audit or an Hourly Rate?

Posting by Larry Beebe, CPA

A major problem with a flat-rate audit is that it encourages audits with no findings.

If the auditor receives the same fee regardless of findings, the auditor is unlikely to spend time looking for deficiencies. Instead, a plan may want to put a cap or ceiling on its audit costs. One way to do this is to agree on an hourly rate with a cap on the number of hours for each audit. If the auditor […]

August 27, 2015 Accounting, Payroll Audit Read more...

INHERITED IRA’S NOT PROTECTED FROM BANKRUPTCY

Jobe Dupre’, CPA

It is now official that inherited IRAs are not considered “retirement funds” within the meaning of federal bankruptcy law and therefore are not exempt from a bankruptcy estate. This ruling was handed down by the Supreme Court in the case of Clark, et ux v. Rameker on June 12, 2014.

Typically, retirement funds (IRAs and Roth IRAs) are exempt from a bankruptcy estate and therefore shielded from creditors in bankruptcy. This was done to help debtors to provide […]

August 25, 2015 Accounting, Tax Read more...

Larry’s laws of Larceny- Law 2: The Auditor Can’t Find What Isn’t on the Books

Larry Beebe, CPA

I often read stories in the newspaper about funds being stolen or misused. Often there is an outcry from the newspapers or a politician stating, “Why didn’t the auditors catch the fraud?” Sometimes the answer to the question is the auditor has no way of detecting the fraud because the fraudulent transactions were not on the books.

A large pension plan hired a new investment manager. In order to get the account the investment manager hired a relative […]

August 25, 2015 Accounting, Audit, Forensic Accounting Read more...