A Perth accountant who allegedly used his clients personal details to amass millions in fraudulent loans has been charged by police.
Police said the 41-year-old Menora man racked up nearly $4.8 million in funds for fake loans through his accountancy business, allegedly submitting loan applications based on fake invoices.
The man used the business details of his clients without their knowledge, and directed the money to his own company accounts, Sergeant Julie Hansen said.
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By June 2010, the man began defaulting on repayments of 130 separate loans while still utilising the cash for his own purposes.
Following an investigation, police yesterday charged the man with 130 counts of gains benefit by fraud, and he will be appearing in the Perth Magistrates Court tomorrow.
With all the talk of undisclosed foreign bank accounts and coming clean to the IRS, there?s renewed buzz about an age-old topic: what tax information can the IRS get?� Under the U.S. Constitution, you can?t be made to testify against yourself.� You can assert your Fifth Amendment rights and decline to answer IRS questions, even in front of a judge.�
But documents are a different story.��If you have documents?such as foreign bank account records?the IRS can obtain them with a summons, subpoena or search warrant.� That may make you wonder if you aren?t better off with sensitive information in the hands of your lawyer.� That?s especially true if you?ve considered a quiet disclosure.�
Thanks to attorney-client privilege, if you confess to a lawyer you?re hiding income or assets offshore the IRS can?t make the lawyer talk.� The IRS can?t even make your lawyer produce your documents with a summons or subpoena. See Latest Foreign Account Prosecution Fuels Fears.� Such are the basics of the attorney client-privilege.�
That should impact how you handle your case.� If you ask your lawyer to obtain your foreign bank records, your lawyer can?t be forced to hand them over to the IRS.� In contrast, if you obtain your own foreign bank records, they?re fair game.� �
Accountants, however, don?t have this privilege.� If you make statements or provide documents to your accountant, he can be compelled to divulge it no matter how incriminating it is. �The accounting profession lobbied for its own privilege in the 1990s, and a�statutory ?tax preparation? privilege was added in 1998 (IRC��Section�7525(a)(1)).� However,�it is inapplicable to criminal tax cases so is of little value.
In sensitive tax matters, the answer to this quandary for the last 50 years has been the Kovel letter.� Named after United States v. Kovel, it works like this: Your tax lawyer hires an accountant to work for him on your case.� In effect, the accountant is doing your tax accounting and return preparation, but reporting as a subcontractor to your lawyer.
Properly executed, this end-run imports attorney client privilege to the accountant?s work and communications.� However, recent IRS lawsuits are eroding this well-established principle.�
In United States v. Richey, the Ninth Circuit Court of Appeals refused to protect an appraisal that a taxpayer, lawyer and accountant were trying to keep out of IRS hands.� In United States v. Hatfield, a federal court in New York also cut back on Kovel, forcing disclosure of discussions between the lawyer and accountant.
Kovel is still good law and the practice remains widespread.� But additional precautions, such as more rigid direction from the lawyer to the accountant and segregation of accounting and legal files, are good ideas.
Robert W. Wood practices law with Wood & Porter, in San Francisco.� The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009, Tax Institute), he can be reached at wood@woodporter.com.� This discussion is not intended as legal advice, and cannot be relied�upon for any purpose without the services of a qualified professional.
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A new salary survey by the Institute of Management Accountants has found that Certified Management Accountants and CPAs earn substantially more than those without certification.
Dennis Whitney
The average total compensation in 2010 for those with a certification such as the CMA (Certified Management Accountant), CPA (Certified Public Accountant), or both is $135,695, which is over $27,000 more than those without certification ($108,938).
Respondents in their 40s and 50s (mid-career level professionals) reported increased salaries and compensation of $14,275 over their non-certified counterparts.
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IMA?s Annual Salary Survey explores salary trends of accounting and finance professionals and reveals that certain industries are faring better than others. Public accounting ranked first in terms of average salary, at $125,488, and second in average total compensation, at $153,395, both in 2010 and 2009. The survey was mailed to respondents last December, and the results have just been released this month.
?The CMAs in this year?s study make a little more than the CPAs,? said Dennis Whitney, senior vice president of certification at the Institute of Certified Management Accountants. ?For the younger professionals, it?s a little more per year. The number does seem to go up as you get older, but generally it?s a couple of thousand dollars. But the thing that?s the most dramatic is that people with both the CPA and the CMA fare the best.? For those with both certifications, the difference can be not only $27,000, but $35,700.
?Dual certification is definitely worthwhile,? said Whitney. ?It broadens your competencies. You have not only the financial accounting and auditing skills, but also the financial planning, analysis, and control skills and decision-making, which are very important today.?
Total compensation fluctuated broadly for management accountants, with six industries (grouped by SIC code) seeing gains of more than $10,000 and five groups seeing it fall from the previous year. The six big winners, in order of increase, are contract construction (+$34,261); finance, insurance, and real estate (+29,856); wholesale and retail trade (+$15,090); mining (+$12,095); public accounting (+$11,593); and nonclassifiable (+$11,046). The five losing groups, in order of decrease, are agriculture, forestry, fisheries (-$48,947); government (-$4,885); manufacturing (-$3,793); transportation, communication, and utilities (-$2,673); and education services (-$1,921).
The survey found that younger professionals benefit from obtaining professional certifications. For both men and women overall, average salary and total compensation increased a little. The number of respondents who received an increase rose sharply but has not yet returned to pre-recession levels.
The economic recovery is noticeably different across industrial sectors, company size, ownership structure, responsibility area, and age. The average salary of members responding to IMA?s 22nd Annual Salary Survey increased $3,415 from $105,850 to $109,265?a 3.1 percent increase. Average total compensation increased $5,129 from $123,357 to $128,486?a 4.2 percent increase. For the third consecutive year, neither increase is statistically significant. This year the percentage increase in average total compensation is greater than the percentage increase in average salary, a reversal of the trend for the previous three years.
A Perth accountant has been charged with 130 counts of fraud. Source: HWT Image Library
A PERTH accountant has been charged with 130 counts of gaining a benefit by fraud after allegedly making false loan applications totalling nearly $5m.
Police said the 41-year-old man from Menora in Perth's inner north ran an accounting business and used a funding company to arrange loans for clients to pay their professional fees and insurance premiums.
They said that in May 2009 the man began submitting loan applications based on fake invoices, using his clients' business details without their knowledge and directing the funds to his own accounts.
By June 2010 the man began defaulting on repayments of the loans, which included 130 separate loan applications, with outstanding loans of almost $4.8 million, police said.
The man was charged on Tuesday with 130 counts of gaining a benefit by fraud and will appear in the Perth Magistrates Court on July 14.
SIOUX FALLS, SD - Officials with SDN Communications in Sioux Falls say they are the victims of embezzlement, and the person who is at the center of the case is their former chief accountant.�
SDN Communications, the largest fiber-optic network in the region, says former accountant Brad Whitsell has been charged in federal court for employee misconduct that involved a 'significant' amount of money.
The CEO of SDN says officials started noticing 'financial irregularities' connected to Whitsell last year, and he was put on administrative leave so they could conduct a forensic audit and internal investigation. But, Whitsell resigned before the investigation even began.
"Even though the dollar amount is significant, it allegedly happened over a number of years, so it has not significantly impacted our annual operations," Shlanta said.�
Whitsell made a court appearance Tuesday on federal charges SDN classifies as 'employee financial misconduct.'
"We are limited in what we can say since this is a pending court case, but I want to emphasize this alleged crime is an isolated incident by a single employee. Frankly, this is embarrassing and painful for all of us at SDN," Shlanta said in the YouTube statement.
And the company says it has already made changes to prevent similar incidents from happening again.
"The good news is SDN is a stronger, better company because we've taken measures to prevent any future issues," SDN Communications Board President Bryan Roth said.
They say they've increased checks and balances in their accounting and also set up a fraud hotline for employees for any future anonymous tips.�
"Our employees said honesty is the character trait they most value. All of us at SDN must live up to that, no exceptions. We want to live up to that by being as transparent as possible with you through this pending case," Shlanta said.�
KELOLAND News�left a message for Brad Whitsell at his Sioux Falls home Tuesday night asking for a comment on the federal charges he faces, but he did not return our call.
We hope to have more information on the exact charges he faces by Wednesday.
SALT LAKE CITY - The court-appointed accountant for a land trust once run by jailed polygamous leader Warren Jeffs wants Utah taxpayers to pay off $4.6 million in debts incurred for its management.
In court papers, attorneys for Bruce Wisan have asked a 3rd District judge to order state officials to pay the United Effort Plan Trust debts.
"The trust is facing a continuing, ongoing crisis due to a lack of funds to pay the costs of administration," Wisan's attorney, Jeff Shields, wrote in the May 27 court filing.
The Utah Attorney General's Office opposed the request in a response filed Friday with the court.
The money is owed to lawyers, Wisan's own Salt Lake City accounting firm, an engineering and surveying firm, a public-relations firm and others hired for trust-related business.
Wisan alone is owed more than $1 million, and the firm that employs Shields is owed nearly $2.4 million, according to court documents.
In addition, about $2 million in property taxes is owed on trust property in Utah and northern Arizona.
The $4.6 million currently owed is for expenses incurred since those working for the trust were last paid in 2008.
A message left for Shields by the Associated Press was not immediately returned.
Utah took over the communal-land trust in 2005 amid allegations of mismanagement by Jeffs, president of the Fundamentalist Church of Jesus Christ of Latter Day Saints, and other church leaders. All were removed as trust managers by the courts when Wisan was appointed.
