Yeah. Their very publicly extravagant lifestyle should have been a HUGE red flag for everyone. Board of Directors, regulators, and auditors. The negligence it requires to let something get this big and go on this long is astounding. I expect the credit union itself will be getting one or more big insurance settlements to make them more or less whole. But that credit union needs at a minimum a completely new Board of Directors. And honestly it probably just need to be taken over and sold to another credit union.
OT: If you gonna steal, go all out ($95 million)....
- Thread starter Negative Waves
- Start date
I assume their D&O insurer is going to settle and probably offer something close to policy limits? I assume they are going to sue their auditors also? I don't know if board members for federal credit unions have some sort of protection from personal liability beyond the D&O policy limits, but if I were them, I'd be figuring it out really quickly because I'm guessing their D&O limits aren't for $95M. Just a google search says that credit unions typically carry more like $5M for each board member.
Lots of people are completely clueless about the potential liability they are taking on when they join boards. The number of non-profits with board members that are paying zero attention is crazy. They don't do the bare minimum to make sure they protected from liability, like get an auditor to confirm that they are withholding taxes for employees and making required FICA contributions.
I figure they'll get their insurance limits plus their auditors' insurance limits. And we very well may see a prominent (in CPA world) CPA firm go down.
Honestly I feel like people get in this situation by starting small, it snowballs then turns into an addiction. They get behind one month and cook the books thinking they will pay it back and no one will notice. Time passes and it never gets noticed then they do it few more times. Next they are doing it to make large purchases with no intent to pay it back then they are chasing the dragon to keep up the lifestyle to feed the addiction.
Yup. Looks like it's BMSS? Who purchased or merged with Haddox Reid? I don't know what kind of assets accounting firms normally have, but I assume they're going to be exhausted. But I assume they don't actually have a lot of assets? Best case scenario for NCUA is they own their office space instead of lease it. Not sure how common that is for mid sized firms. Otherwise it's just office equipment? Maybe some AR. And their real asset is the ability to bill their people which will walk out the door if it looks like they're going under.
Addiction was the first thing that came to my mind when I saw the picture of the closet full of purses and ****.
Which got me to thinking. If I ever hit my head and become stupid enough to do something like this, what would I blow it on? I have some ideas.
Sueños GIX - HCB Yachts |
Syracuse man’s huge LEGO collection sells for $165,000; loved to share his passion - syracuse.com
The Largest Pinball Machine Collection - Pinball Adventures
I do not recall exactly. My senior annual burned in a fire some years ago, so I have no reference. She was nice and had a great personality. Sweet girl. Had a normal upbringing. Her folks were long-time residents of Hazlehurst, went to church, active in community, etc.
These allegations have completely stunned me, like (if true), if you had asked me 38 years ago when I graduated who was most likely to have done something like this, she wouldn't even be on the list.
I would assume the real estate is owned by a separate related company that leases it to the accounting firm. But I don't know. The real target is their insurance coverage.
Yup. Only other possible explanation I could come up with would be if they were a throuple or something. Or possibly she had connections in Honduras and she was responsible for setting up a place to escape to down there. But the crazy number of hand bags seems to make the last option less likely.
Interesting. I had an acquaintance, whom I never would have suspected, get caught embezzling and it wasn't as big but the spending on name brand material stuff was similar. I guess some people may feel a lot of pressure to keep up with others who they perceive have more? Funny thing is that often those who make a show of what they have are often in unsustainable debt.
She will likely be able to use the kleptomaniac defense. Her husband too. It will be interesting to see if they serve any hard time or even mild white-collar containment.
I can tell you who has little to no defense: The Board of Directors, particularly the officers. They will have to dissolve if they haven't already. But doubtful any of them are prosecuted.
How auditors and the NCUA didn't catch this for 10 years says a whole lot about how institutions like this are managed.
Nutso!
I can tell you who has little to no defense: The Board of Directors, particularly the officers. They will have to dissolve if they haven't already. But doubtful any of them are prosecuted.
How auditors and the NCUA didn't catch this for 10 years says a whole lot about how institutions like this are managed.
Nutso!
There's no such thing as a kleptomaniac defense. But yeah, everyone is to blame. The 3 who were charged, the Board of Directors, the regulators and the auditors. It's unbelievable they were able to get away with so much for so long.
I guess I should have clarified: they will use some early life trauma as the basis for their kleptomania/addiction to get a lighter sentence. They're wealthy so they will already have a substantial leg up in the court system.
The HCB is a solid option. I think if I'm going that big, I'd rather have a real cabin, but definitely a strong option.
Not sure about the latter two option. I'm more of a traditionalist when it comes to embezzlement. Boat first, then beach house, then plane if there's still money, then nice car and then other toys (like wrangler. horses, hunting rifle or land, whatever floats your boat). You definitely don't want to be one of those new money embezzlement people that go car first. I think reasonable people can disagree where women, alcohol, and drugs fall in the order of operations. I feel like if you get the boat, beachhouse, and plane, the women will take care of themselves. But I can't fault anybody for prioritizing them earlier.
If they haven't been arrested or are out on bond. I use those connections to make my was down there.
Two different times in nascar someone was embezzling or running a ponzi scheme to run a cup team.
Honestly, the best thing to do is to keep your mouth shut and off the radar for several years or bad things can happen.
Goodfellas - Layla Scene - HQ
So only one person had to approve large wires, and that same person was the CFO and reconciled the ledger??
I mean I know the Credit Unions have some damn good lobbyists that keep them shielded from some of the oversight and regulations that banks deal with.... but not one external auditor, internal auditor (if there was one), or regulator saw that and thought that maybe that's not the best practice?
I mean I know the Credit Unions have some damn good lobbyists that keep them shielded from some of the oversight and regulations that banks deal with.... but not one external auditor, internal auditor (if there was one), or regulator saw that and thought that maybe that's not the best practice?
I knew a guy in junior high and high school that was a year ahead of me, later became a pastor, and stole several hundred thousand non-pesos from a Jackson-area megachurch that you never would have thought conceivable of ever doing such a deed.
Lucifer, that mad-scrilla w_hore of yours is a tempting mistress, apparently....
Lucifer, that mad-scrilla w_hore of yours is a tempting mistress, apparently....
Overspending is the first thing authorities look for in spy cases. I would think it would be the same in cases like this as well.
Back when I was in high school, early 80’s, girl in the class below me had an older sister who was Sam Walton’s personal assistant. Yep Wal Mart Sam Walton. She was arrested for embezzling 28 million from Sam. He dropped the charges and refused to prosecute because she was like a daughter to him. She got to keep the money, or at least part of it. She never worked another day in her life as far as I know. Lived with her parents and always drove a new Porsche convertible.
Now we're talking.
I looked at their list of wasting money and it was noticeable to me how lowbrow their car purchases looked. They apparently had $95M to work with and got two Mercedes for $127k (obviously no S or G-Wagon in that number) and one $65k Tesla. Embarrassing. Not one Phantom or Continental GT on the list.
Birkin bags and jewelry are easier to hide away. You can always say they're fake if people start asking questions. Hard to explain a G63 or a Urus on a upper middle class salary.
I wonder what ole Chad was buying with his allowance?
That's the wild thing to me, they are wealthy because they stole the money and can use that money to defend themselves.
I know next to nothing about accounting, but would something of this nature be the end of a firm like BMSS ? Or just the one that serves the Jackson area? They're not huge, but not small either based on locations -- 4 separate offices with headquarters in the Birmingham area, and presence in other Alabama major towns, and one in Ridgeland MS.
Second question, coming from a fiscally conservative engineer: I can understand the Steinway, but how can a woman's purse possibly cost $30,000?
I think it's the end of them, and potentially a really big problem for the individuals working personally on the account, but I'm not sure BMSS going away is that significant. if the NCUA hammers them with a judgment, somebody will pick up all the accountants (or at least the vast majority of them). Hell, other firms could in theory pick up one or more of the offices basically like it was a purchase. They could hire the people and assume the office lease and even buy the existing equipment out of whatever auction to liquidate assets and it wouldn't look much different than if they had purchased the firm outright, except the partners/owners wouldn't get the benefit of the value of the equipment and instead of receiving any upfront payment for the sale and presumably some sort of earnout based on retaining clients, they wouldn't get any payment for the purchase, they'd just get some sort of compensation package highly contingent on on how many clients they retained.I know next to nothing about accounting, but would something of this nature be the end of a firm like BMSS ? Or just the one that serves the Jackson area? They're not huge, but not small either based on locations -- 4 separate offices with headquarters in the Birmingham area, and presence in other Alabama major towns, and one in Ridgeland MS.
Second question, coming from a fiscally conservative engineer: I can understand the Steinway, but how can a woman's purse possibly cost $30,000?
I suppose retaining clients would be very difficult. I wonder if there might have been some inside "help" from some of the BMSS accountants? I don't suppose this is at the Enron level, but it certainly wouldn't help their reputation.
Further Googling says the company has 375 employees, 125 CPAs, and 37 partners. I suppose that would be a mid-sized firm.
Headquartered in Birmingham. I think this could definitely be the end of them. It’s a massive failure.I know next to nothing about accounting, but would something of this nature be the end of a firm like BMSS ? Or just the one that serves the Jackson area? They're not huge, but not small either based on locations -- 4 separate offices with headquarters in the Birmingham area, and presence in other Alabama major towns, and one in Ridgeland MS.
Second question, coming from a fiscally conservative engineer: I can understand the Steinway, but how can a woman's purse possibly cost $30,000?
another nugget here. The new president of the AICPA is a partner in the Ridgeland office. I hope like heck she’s not personally involved in that audit because I’m acquainted with her and like & respect her.
Doubtful. Auditors aren’t charged to detect fraud per se. The job is to audit the financial statement. As long as they documented the work, they’re probably safe. The audit business has become all about documentation.
I could go on for days about the documentation bullsh*t but I won’t here. But auditors are absolutely responsible for detecting fraud that is material to the financial statements. The Enron fraud brought down the biggest CPA firm in the world.
It’s just about run me out of it too. And what really sad is all the bull*t they came up with to address the audit failures haven’t made audits any better. If anything it’s the opposite.
Right. It’s like the financial statements don’t matter as long as you have the checklists filled out.
edit. We’ve increased revenue and lost stomach acid since quitting.
Great movie btw!
this is what I was thinking as I was reading it.
Maybe a combo of hush $$ and a throuble ?
