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Senator Frist’s Blind Trusts
In addition to seeking information from HCA, Inc., federal prosecutors in the U.S. Attorney’s Office for the Southern District of New York and attorneys from the Enforcement Division of the SEC have contacted Senate Majority Leader Bill Frist’s office for information related to the sales of HCA stock in so-called "blind trusts" that held assets…
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Corporate Governance at Corinthian Colleges
Corinthian Colleges, Inc., a for-profit, publicly-traded higher education company, has run into a bit of a rough spot in the cutthroat world of attracting an expanding number of students to its programs. Among other things, in its recently filed 10-K report (here), the company noted a recently concluded Department of Education investigation: As previously disclosed,…
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The “CSI Effect” on White Collar Crime Prosecutions
Reuters has a story (here) about the white collar crime conference at Georgetown University this past week in which U.S. Attorney Alice Martin noted the effect of a lack of forensic evidence on the prosecution by her office of former HealthSouth CEO Richard Scrushy, which ended with an acquittal. She lamented the fact that jurors…
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10 Bedrooms, 12 Baths, Motivated Seller
A Wall Street Journal article (here) discusses the sale by former WorldCom CFO Scott Sullivan of his palatial house in Boca Raton. Sullivan was sentenced to a five-year term of imprisonment for his role in the accounting scandal at the company, a significantly lower sentence due to his cooperation with the government. As part of…
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Considering the Kozlowski & Swartz Sentence
The weekly New York Times column What’s Online (here) reviews co-editor Ellen Podgor’s post discussing the 8-to-25 year sentence imposed on former Tyco CEO Dennis Kozlowski and CFO Mark Swartz and arguing that the prison term is too harsh given the status of the defendants as first-time offenders. (ph)
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Time Receives Grand Jury Subpoena in Circulation Probe
A grand jury in the Eastern District of New York (Brooklyn) issued a subpoena in July to Time Inc. for documents related to its circulation figures for the company’s various magazines. The investigation focuses on whether media companies have overstated the number of copies that have been purchased as opposed to distributed for free; those…
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A HealthSouth CFO Finally Receives a Jail Sentence
Former HealthSouth CFO Weston Smith, who initially blew the whistle on the fraud at the company, received the only substantial sentence among its former officers who entered guilty pleas. U.S. District Judge Robert Propst sentenced Smith to a 27-month term of imprisonment, which is a far cry from the seven-day sentence imposed on former CFO…
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Palmeiro Becomes a Pariah
Information from the hearing on now-former Baltimore Orioles player Rafael Palmeiro’s drug test indicates that he tried to blame teammate Miguel Tejada, who Palmeiro said gave him an injection of what he thought was vitamin B-12 but may have been the steroid for which he tested positive. The Orioles have now invited Palmeiro to remain…
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Appealing a 100-Year Sentence for Fraud
Colorado financial advisor Will Hoover received a 100-year sentence for organizing a ponzi scheme that resulted in investors, many of whom are elderly, losing over $13 million. Hoover has appealed the sentence to the Colorado Court of Appeals by citing to the sentences of Bernie Ebbers (25 years) and Dennis Kozlowski (maximum of 25 years)…
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HCA Receives Grand Jury Subpoena About Senator Frist’s Stock Sale
HCA Inc., the large private hospital and medical clinic company, disclosed that it received a subpoena from the the U.S. Attorney’s Office for the Southern District of New York for information related to sales of the company’s stock by Senate Majority Leader Bill Frist. A company news release (here) states: "HCA (NYSE: HCA) today announced…
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