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Will Causey Switch Sides in the Enron Conspiracy Trial?
Like the fifth Beatle, former Enron Chief Accounting Officer Richard Causey has been the unknown defendant in the upcoming Enron conspiracy trial. Unlike codefendants Ken Lay and Jeffrey Skilling, who as CEOs of the company had high-profile and highly lucrative roles, Causey was responsible for the nuts-and-bolts of the accounting issues at the core of…
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Scrushy Sues Birmingham News and Radio Host for Libel
Former HealthSouth CEO Richard Scrushy and his wife, Linda, filed libel suits against the Birmingham News and Alabama radio personality Paul Finebaum for comments regarding their decision to switch churches during the government’s investigation of fraud at the company. The Scrushys changed congregations from one in the suburbs to a largely African-American church in Birmingham…
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Loss Avoided Insider Trading Case
A well-timed trade by a company employee sure draws the SEC’s attention in a hurry, as demonstrated once again in the Commission’s filing against Gregory Champe, an executive of Martek Biosciences Corporation, which make food supplements. It seems that Champe sold 2,600 shares of Martek on April 26, 2005, and the next day after the…
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Government Seeks 15-Year Term for Olis on Resentencing
Former Dynegy executive Jamie Olis became something of a poster child for harsh sentencing in white collar crime cases when he received a 24-year sentence for his role in an accounting fraud at his company. The Fifth Circuit reversed the sentence, finding that U.S. District Judge Sim Lake used an incorrect methodology that attributed all…
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SEC Sues Hedge Fund Operators to Recover Assets
The SEC sued HMC International, its manager, Robert M. Massimi, and chief trader, Bret A. Grebow, for fraud and diversion of assets from the fund that collapsed in September. The Commission alleges that the defendants (and Massimi’s wife) took $5.2 million in fund assets for personal use. One red flag about the fund, into which…
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Retrial of German Executives Ordered
The German Federal Supreme Court ordered a retrial of six prominent executives, included Josef Ackermann, the CEO of Deutsche Bank, for their role in authorizing large bonuses to executives of Mannesmann in the wake a takeover of the company by Vodafone. The 57-million Euro payments to the Mannesmann executives, large by German standards but hardly…
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Doctor Charged with Health Care Fraud for Phony Patients
It’s hard enough even getting in to see a doctor, but when the insurance company gets billed for more than 21,000 physical therapy services and injections for 34 patients, there has to be something wrong. Dr. Zack Brown of Detroit was indicted on 72 counts of mail fraud, 34 counts of health care fraud, and…
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Will Abramoff Plead?
Will Abramoff enter into a plea agreement, or are the media just starting rumors? (See AP here; New York Times here) But what would a plea agreement with Abramoff mean for the government? Clearly if there is a plea, the government will require cooperation as a component of the agreement. But what would make this…
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Former Qwest CEO Indicted
Joe Nacchio, the former Qwest CEO was indicted yesterday (see Denver Post here). The indictment (Download nacchio_indictment.pdf) charges forty-two counts that are titled "Securities Fraud – Insider Trading.". It also includes a forfeiture count for the sum of $100,812,582. Despite the number of counts and the inclusion of forfeiture, the entire indictment is only eight…
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ABN AMRO Bank to Pay $80 Million in Civil Settlement
A massive consent order with state, federal, and international parties, has |ABN AMRO Bank, N.V. taking remedial measures and also paying "$80 million in penalties to U.S. federal and state regulators." (See Wall Street Jrl here). The joint press release here demonstrates how several entities were able to cooperate to arrive at this resolution. It…
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