Tag Archives: financial statements

Sometimes Criminals Are The Best Detectives In A Fraud Case

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I spent my teenage years living in central New Jersey. I remember the “Crazy Eddie” commercials. Crazy Eddie was a consumer electronics chain in the metropolitan New York City area. The company was owned by Eddie and Sam M. Antar. Eventually the company went public. Eddie and Sam began cooking the company’s books in order to increase the value of the stock. Eventually they got caught. Eddie was charged with securities fraud and insider trading; he fled the country. Sam agreed to testify if he was granted immunity.

An article posted at Hot Air on Tuesday reports:

Since 2009, Sam Antar has been a forensic accountant, working with federal and local law enforcement agencies, teaching them what to look for in paperwork – and where to look for paperwork – as well as digging on his own time into waste, fraud, and abuse, always on the hunt for white collar crime.

He is a man on a mission.

And way back in February, while going through the records from Letitia James’ ‘luxury campaign spending,‘ as he calls it, Sam came across some wonky-looking personal finance filings. Things weren’t adding up to the eagle-eyed Antar.

In February, the White Collar Fraud website reported:

After our recent investigations exposed New York Attorney General Letitia James’ pattern of luxury campaign spending and creative accounting, a deeper examination of her personal financial disclosures reveals troubling new questions about her property holdings and financial reporting.

The same pattern of obscured luxury that characterized her campaign spending now emerges in her personal financial statements, starting with a Virginia investment property that seems to defy financial logic. Purchased in August 2020, James values the single-family home at “$100,000 to under $150,000” in her 2023 financial disclosure. Yet somehow, this same property carries mortgages totaling up to $400,000 – potentially more than twice its declared value.

The article at Hot Air concludes:

Now, Antar’s work has everyone swarming James’ life in the files, and what they’re uncovering is astonishing in its blatant gaming of the system.

And as Antar says, James didn’t do this by herself – she had to have help.

Who is going to squeal to save themselves?

The tenants who live in the Brooklyn building that isn’t supposed to have tenants are speaking up, and that is really looking awkward all around for James.

…When a guy’s already done time for legendary crazy, there’s not much he’s going to worry about when he’s on the right trail of wrongdoing.

This is gonna be sumpthin’ to see.

This is not the first time someone convicted of a white-collar crime has wound up doing investigative work for the government, and based on the many times that has been successful, I suspect it won’t be the last.

This Sort Of Thing Might Be Part Of Washington’s Budget Problem

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The Gateway Pundit reported yesterday that there were some serious problems with the audit of the Department of Housing and Urban Development.

The article reports:

The 2015 and 2016 Fiscal Years HUD audit needed to be restated and reissued.  The auditors were not able to initially perform the audit because there were too many material issues and the audit needed to be redone –

…The restated audit report shows the following –

The total amounts of errors corrected in HUD’s notes and consolidated financial statements were $516.4 billion and $3.4 billion, respectively. There were several other unresolved audit matters, which restricted our ability to obtain sufficient, appropriate evidence to express an opinion. These unresolved audit matters relate to (1) the Office of General Counsel’s refusal to sign the management representation letter, (2) HUD’s improper use of cumulative and first-in, first-out budgetary accounting methods of disbursing community planning and development program funds, (3) the $4.2 billion in nonpooled loan assets from Ginnie Mae’s stand-alone financial statements that we could not audit due to inadequate support, (4) the improper accounting for certain HUD assets and liabilities, and (5) material differences between HUD’s subledger and general ledger accounts. This audit report contains 11 material weaknesses, 7 significant deficiencies, and 5 instances of noncompliance with applicable laws and regulations.

It’s time for HUD to straighten out its books. It might be a good idea to put someone with an accounting background in charge of the agency at least temporarily. The irony here is that if a business had financial records that were this much in error, its owners would be talking to the Internal Revenue Service and possibly sitting in jail.