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SEC ProbeInto Usana Is Under Way - WSJ.com http://online.wsj.com/article_print/SB117436051602942414.html March 20, 2007 DOW JONES REPRINTS SEC Probe This copy is for your personal, non-commercial use only. To order Into Usana presentation-ready copies for distribution to your colleagues, clients or Is Under Way customers, use the Order Reprints tool at the bottom of any article or visit: By KEITH J. WINSTEIN www.djreprints.com. March 20, 2007; Page C7 • See a sample reprint in PDF format. • Order a reprint of this article now. The Securities and Exchange Commission has begun an informal inquiry into Usana Health Sciences Inc., the marketer of vitamins and nutritional supplements said. The company said it was cooperating with the inquiry. The SEC didn't return calls seeking comment. Usana's stock has tumbled since Barry Minkow, a convicted stock-fraud felon turned private investigator in San Diego, last week released a 500-page report critical of the company. Mr. Minkow served jail time in the 1990s but has since been credited by the FBI with identifying several scams. Usana shares fell an additional 2.8%, to $47.75, in after-hours trading on the Nasdaq Stock Market after the company announced the SEC inquiry last night. Mr. Minkow accused Usana, Salt Lake City, of being a "pyramid scheme" that requires the constant recruitment of new distributors to sell its products. Mr. Minkow says he has bought "put" options on Usana's stock in a bet that the price would fall. On Thursday, Usana sued Mr. Minkow, saying his report misrepresented some laboratory evidence. The company yesterday called for the SEC to investigate Mr. Minkow, who said Usana's complaints were a "red herring." Write to Keith J. Winstein at [email protected] URL for this article: http://online.wsj.com/article/SB117436051602942414.html Hyperlinks in this Article: (1) mailto:[email protected] Copyright 2007 Dow Jones & Company, Inc. All Rights Reserved This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com. 1 of 2 3/21/07 10:55 AM SEC ProbeInto Usana Is Under Way - WSJ.com http://online.wsj.com/article_print/SB117436051602942414.html 2 of 2 3/21/07 10:55 AM.

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Barry Minkow
Barry Minkow Barry Jay Minkow (born March 17, 1967) is a former businessman, pastor and convicted felon. While still in high school, he founded ZZZZ Best (pronounced Zee Best), which appeared to be an immensely successful carpet-cleaning and restoration company. However, it was actually a front to attract investment for a massive Ponzi scheme. It collapsed in 1987, costing investors and lenders $100 million—one of the largest investment frauds ever perpetrated by a single person, as well as one of the largest accounting frauds in history. The scheme is often used as a case study of accounting fraud. After being released from jail, Minkow became a preacher and a fraud investigator, and spoke at schools about ethics. This all came to an end in 2011, when he admitted to helping deliberately drive down the stock price of homebuilder Lennar and was ordered back to prison. At first, Minkow struggled to meet basic expenses. Two banks closed his business account because California law didn't allow minors to sign binding contracts, including checks. He was also plagued by customer complaints and demands for payment from suppliers. At times, he found it difficult even to meet payroll. Faced with a shortage of operating capital, he financed his business via check kiting, stealing and selling his grandmother's jewelry, staging break-ins at his offices, and running up fraudulent credit card charges. After that, Minkow branched into the "insurance restoration" business. With the help of Tom Padgett, an insurance claims adjuster, Minkow forged numerous documents claiming that ZZZZ Best was involved in numerous restoration projects for Padgett's company.
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Gary Zeune: [00:00:00] Every Fraud That We Talk About Is a Situation Where Really Smart People to Do Really Stupid Stuff
Gary Zeune: [00:00:00] Every fraud that we talk about is a situation where really smart people to do really stupid stuff. Peter Margaritis: [00:00:17] Welcome to Change Your Mindset Podcast, formerly known as Improv is No Joke, where it's all about believing that strong communication skills are the best way in delivering your technical accounting knowledge and growing your business. An effective way of building stronger communication skills is by embracing the principles of applied improvisation. Peter Margaritis: [00:00:37] Your host is Peter Margaritis, CPA, a.k.a. The Accidental Accountant. And he will interview financial professionals and business leaders to find their secret in building stronger relationships with their clients, customers, associates, and peers, all the while growing their businesses. So, let's start the show. Peter Margaritis: [00:01:04] Welcome to Episode 21. My guest today is Gary Zeune, CPA. And his consulting practice provide CPAs, attorneys, and executives with hands-on experience in fraud, auditing, and corporate strategy performance improvement. Prior to forming his consulting practice, Gary was an Assistant Vice President of Corporate Finance at the Ohio Company, a Columbus, Ohio investment banking firm. Peter Margaritis: [00:01:30] He also spent more than five years in treasury and Finance at Wendy's International where he was responsible for mergers and acquisitions, financial and SEC reporting, and corporate finance. Gary has the only speaker bureau in the country specializing in white-collar criminals, The Pros and The Cons. His 40 plus ex-con speakers tell their stories of how and why they embezzled, took kickbacks, and cooked the books to the tune of $2.7 billion.
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Redacted Complaint
Case 4:20-cv-00311-SDJ Document 60 Filed 06/24/21 Page 1 of 76 PageID #: 1944 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION HOLLIS M. GREENLAW, TODD F. ETTER, CARA D. OBERT, BENJAMIN L. WISSINK, UMT HOLDINGS, L.P., UDF HOLDINGS, L.P., UNITED DEVELOPMENT FUNDING, L.P., UNITED DEVELOPMENT FUNDING III, L.P., UNITED DEVELOPMENT FUNDING IV, UNITED DEVELOPMENT FUNDING INCOME FUND V, UNITED MORTGAGE TRUST, and UNITED DEVELOPMENT FUNDING LAND OPPORTUNITY FUND, L.P., Plaintiffs, v. No. _____________________ DAVID KLIMEK, JAMES NICHOLAS BUNCH, JURY DEMANDED CHRISTINE L. EDSON, a/k/a Christy Edson, and DOES 1-10, Defendants. COMPLAINT AND JURY DEMAND Case 4:20-cv-00311-SDJ Document 60 Filed 06/24/21 Page 2 of 76 PageID #: 1945 TABLE OF CONTENTS SUMMARY ................................................................................................................................... 1 SUBJECT MATTER JURISDICTION ......................................................................................... 9 VENUE .......................................................................................................................................... 9 PLAINTIFFS .................................................................................................................................. 9 DEFENDANTS ............................................................................................................................ 13 RELEVANT PERSONS AND ENTITIES .................................................................................
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30+ EXPERT CONFERENCE SPEAKERS If You Can't Tell Who
10356 Wellington Bvld, Suite D Expert Powell, OH 43065 Conference 614-761-8911 www.TheProsAndTheCons.com Speakers [email protected] 30+ EXPERT CONFERENCE SPEAKERS If you can’t tell who fooled Internationally Recognized Cheryl’s Bookkeeper their CPAs… Security Expert Ben Wright Stole $400,000 Purchasing Mgr Past Exec Dir Tenn Board CFE Chrissie Powers Went to Prison of Accountancy NEW Finds Fraud Pulitzer Prize Winner Ex-CPA Did Time White Collar Criminal Gov’t Fraud and Abuse Expert for Ponzi Scheme Who Became a CPA …then your members can’t. Bookkeeper White Collar Criminal Walt Stole $345,000 Pavlo Writes Forbes Column Accounting ZZZZ Best CFO Ex-KPMG Partner Forgery Expert Mark Morze Insider Trading Investigates CPA Infamous Crazy Former NASBA Chair Malpractice Eddie Fraud CFO Gaylen Hansen Kathy Bazoian Phelps NEW - Google Expert Gary Zeune CPA Ponzi Scheme Garrett Wasny Managing Director Attorney and Author Retail Fraud Expert Fraud Expert Bookkeeper Thief Peter Goldmann Bank CEO Paul Allen Ex-CPA Ex-County Commits $2.7 Billion Fraud Auditor Kay Rogers Global Fraud Expert Drexel Burham Banker Dan Elder Fraud Expert Mortgage Fraudster Bubalo Insider Trading Jerome Mayne David Kessler WHICH EXPERT DO YOU NEED???? CON Scott London Ex-CPA Ex-Big 4 Partner Insider Trading Nov 2015 Scott London was a regional audit partner for KPMG with 500 people Scott London reporting to him. London explains how he signed and complied with the firm’s ethics policies for 25 years. He declined a friend’s request for help. Read WSJ Profile Then, as is often the case, started a slow slide down the ethical slippery slope.
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Forensics Journal
process analysts and technicians undergo to obtain various work-related credentials based on qualifying education, experience, etc. Not all accrediting bodies require analysts or technicians to obtain specific certifications. In this paper, the term forensic science service provider may be used interchangeably with science service provider is defined as “having at least one full-time analyst, however named, who examines physical evidence in criminal and/or investigative matters and provides reports or opinion testimony with respect to such evidence in United States courts of law” (National Science and Technology Council 3). Understanding Fraud: From the Basics to Analysis By Lauren Rose Harry Markopolos was once an obscure financial analyst, a number-crunching fraud investigator from Boston. His career at a Boston investment firm focused on analyzing the trading strategies and revenue streams of exceptionally-performing compa- nies in order to replicate and/or produce superior results (Kroft). His obscurity ended after he uncovered Bernard Madoff’s 65 billion dollar Ponzi scheme. Madoff, former chairman of the NASDAQ stock exchange, was highly respected in the stock market industry. In fact, he was one of the most powerful men on Wall Street. Markopolos’ investigation lasted over eight years and his conclusion was that Madoff was committing fraud. Through mathematics, Markopolos was able to prove that Madoff was scamming investors out of millions of dollars. Over time, the relationship of mathematically analyzing financial data to the frequen- cy of discovered fraud has become more evident. This is due to increased awareness and knowledge of fraudsters’ motivations and opportunities, advancements in technology, improved education of and increased demand for professional fraud examiners and forensic accountants, and the overall higher occurrence of fraud.
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Minkow -- Press Release 01-21-14
NEWS RELEASE OFFICE OF THE UNITED STATES ATTORNEY SOUTHERN DISTRICT OF CALIFORNIA San Diego, California United States Attorney Laura E. Duffy Assistant U. S. Attorney Mark W. Pletcher (619) 546-9714 For Immediate Release FORMER INMATE TURNED PASTOR BARRY MINKOW PLEADS GUILTY TO BILKING CONGREGATION NEWS RELEASE SUMMARY – January 22, 2014 United States Attorney Laura E. Duffy announced today that former convict, turned fraud investigator and pastor, Barry Minkow, admitted embezzling and defrauding the San Diego Community Bible Church (“SDCBC”) and its congregation out of more than $3 million. Minkow, who is currently in custody after his conviction on unrelated securities fraud charges, entered a guilty plea today in federal court in San Diego before the Honorable William Gallo, United States Magistrate Judge. As part of his guilty plea, Minkow admitted to a litany of improper conduct, including opening unauthorized bank accounts on behalf of the SDCBC, forging signatures on SDCBC checks, using funds drawn on legitimate church accounts for his personal benefit, and charging unauthorized personal 1 expenses on church credit cards. In addition, Minkow confessed to diverting SDCBC member donations for his own benefit and embezzling money intended as church donations. In all, Minkow admitted purloining – and concealing from the IRS – at least $3 million from SDCBC’s parishioners and lenders. As described in court documents, Minkow’s conduct continued for over a decade. U.S. Attorney Laura E. Duffy remarked: “Barry Minkow is again convicted of fraud, this time for stealing money from the parishioners of San Diego Community Bible Church. With our law enforcement partners, we stand vigilant against those who cheat and steal without regard to the consequences wrought on their victims and their communities.” The U.S.
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Classic Case Studies in Accounting Fraud”
“Classic Case Studies in Accounting Fraud” A thesis submitted to the Miami University Honors Program in partial fulfillment of the requirements for University Honors. by Justin Matthew Mock May 2004 Oxford, Ohio ABSTRACT “Classic Case Studies in Accounting Fraud” by Justin Matthew Mock Over the past several years, accounting fraud has dominated the headlines of mainstream news. While these recent cases all involve sums of money far in excess of any before, accounting fraud is certainly not a new phenomenon. Since the early days on Wall Street, fraud has consistently fooled the markets, investors, and auditors alike. In this thesis, an analysis of several cases of accounting fraud is conducted with background information, fraud logistics, and accounting and auditing violations all subject to study. This paper discusses specific cases of fraud and presents the issues that have been and must continue to be addressed as companies push the envelope of acceptable accounting standards. The discussion and findings demonstrate the ever-present potential for fraud in a variety of accounts, companies, industries, and time periods, while also having a powerful influence on an auditor’s work and preconceptions going forward. iii iv “Classic Case Studies in Accounting Fraud” by Justin Matthew Mock Approved by: _________________________, Advisor Dr. Phil Cottell _________________________, Reader Dr. Larry Rankin _________________________, Reader Mr. Jeffrey Vorholt Accepted by: __________________________, Director, University Honors Program v vi ACKNOWLEDGEMENTS “Classic Case Studies in Accounting Fraud” was completed under the direction of the Miami University Honors Program. The Honors Program provided financial support essential to the project’s research and successful completion.
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USANA Files Lawsuit for Defamation Against Fraud Discovery Institute and Barry Minkow in U.S. District Court
March 16, 2007 USANA Files Lawsuit for Defamation against Fraud Discovery Institute and Barry Minkow in U.S. District Court - USANA Responds to Allegations Made by Mr. Minkow and Fraud Discovery Institute in the Mass Media - SALT LAKE CITY--(BUSINESS WIRE)-- USANA Health Sciences Inc. (NASDAQ:USNA) ("USANA") ("the company") announced today that it has filed a lawsuit against the Fraud Discovery Institute and Barry Minkow in U.S. District Court in Salt Lake City, Utah for defamation. The company issued the following statement regarding public claims made today by Mr. Minkow, a convicted felon: "USANA believes Mr. Minkow's statements are part of a coordinated public relations program financed by a paying client and from which Mr. Minkow will profit personally. According to reporting in the March 15, 2007 edition of The Wall Street Journal, Mr. Minkow "...has bought 'put' options on USANA's shares in a bet the price will fall." Mr. Minkow admits that he has been paid to conduct his "investigation" against USANA. Further, he has engaged a public relations firm to propagate his false and misleading statements about USANA to the media. "USANA believes this is a campaign to manipulate USANA's stock price that is being orchestrated by an individual who served 7 years in prison for stock fraud. In 1998, Mr. Minkow was convicted on 57 counts of fraud and conspiracy related to his carpet cleaning business, ZZZZ Best. He was also ordered to pay his customers $26 million in restitution. "Mr. Minkow's assertions about USANA's sales model are false and misleading.
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USANA Files Lawsuit for Defamation Against Fraud Discovery Institute and Barry Minkow in U.S. District Court
March 15, 2007 USANA Files Lawsuit for Defamation against Fraud Discovery Institute and Barry Minkow in U.S. District Court - USANA Responds to Allegations Made by Mr. Minkow and Fraud Discovery Institute in the Mass Media - SALT LAKE CITY--(BUSINESS WIRE)-- USANA Health Sciences Inc. (NASDAQ:USNA) ("USANA") ("the company") announced today that it has filed a lawsuit against the Fraud Discovery Institute and Barry Minkow in U.S. District Court in Salt Lake City, Utah for defamation. The company issued the following statement regarding public claims made today by Mr. Minkow, a convicted felon: "USANA believes Mr. Minkow's statements are part of a coordinated public relations program financed by a paying client and from which Mr. Minkow will profit personally. According to reporting in the March 15, 2007 edition of The Wall Street Journal, Mr. Minkow "...has bought 'put' options on USANA's shares in a bet the price will fall." Mr. Minkow admits that he has been paid to conduct his "investigation" against USANA. Further, he has engaged a public relations firm to propagate his false and misleading statements about USANA to the media. "USANA believes this is a campaign to manipulate USANA's stock price that is being orchestrated by an individual who served 7 years in prison for stock fraud. In 1998, Mr. Minkow was convicted on 57 counts of fraud and conspiracy related to his carpet cleaning business, ZZZZ Best. He was also ordered to pay his customers $26 million in restitution. "Mr. Minkow's assertions about USANA's sales model are false and misleading.
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Accounting Scandals Accounting Scandals, Or Corporate Accounting Scandals, Are Political and Business Scandals Which Arise With
Accounting scandals Accounting scandals, or corporate accounting scandals, are political and business scandals which arise with the disclosure of misdeeds by trusted executives of large public corporations. Such misdeeds typically involve complex methods for misusing or misdirecting funds, overstating revenues, understating expenses, overstating the value of corporate assets or underreporting the existence of liabilities, sometimes with the cooperation of officials in other corporations or affiliates. In public companies, this type of "creative accounting" can amount to fraud and investigations are typically launched by government oversightagencies, such as the Securities and Exchange Commission (SEC) in the United States. Scandals are often only the 'tip of the iceberg'. They represent the visible catastrophic failures. Note that much abuse can be completely legal or quasi legal. For example, in the domain of privatization and takeovers : It is fairly easy for a top executive to reduce the price of his/her company's stock - due to information asymmetry. The executive can accelerate accounting of expected expenses, delay accounting of expected revenue, engage in off balance sheet transactions to make the company's profitability appear temporarily poorer, or simply promote and report severely conservative (eg. pessimistic) estimates of future earnings. Such seemingly adverse earnings news will be likely to (at least temporarily) reduce share price. (This is again due to information asymmetries since it is more common for top executives to do everything they can to window dress their company's earnings forecasts). There are typically very few legal risks to being 'too conservative' in one's accounting and earnings estimates. A reduced share price makes a company an easier takeover target.
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“That Is Not an Opinion”: How to Sue Short Sellers
“That Is Not An Opinion”: How to Sue Short Sellers Short sellers capitalizing on illegal “short and distort” schemes can, and do, wreak havoc on a company’s stock price, reputation, and the reputation of senior officers and directors. All too often, with just a single tweet. When this happens, companies find themselves playing defense—i.e., responding to a sudden drop in market capitalization, as well as (i) regulatory investigations, (ii) securities class actions, and (iii) derivative lawsuits that often follow a “short attack”. Many companies are sick of playing defense. Increasingly, clients want to stop “short and distort” schemes before they find themselves the victims of unfair, repeat attacks that can act as a drag on share price for years—even if the attacks are baseless. Common law claims such as defamation, unfair competition, and intentional interference with contracts, as well as claims for market manipulation, RICO violations, and securities fraud under federal and state securities laws all sound like appealing avenues for relief. But in practice, few companies decide to bring claims against offending short sellers. One reason companies shy away from bringing claims against short sellers is because, frankly, the claims often fail. The short sellers’ modus operandi is to publish negative statements about companies they hold short positions in (be it through short reports, social media, podcasts, etc.) while describing their statements as “opinions.” Because opinions are protected by anti-SLAPP (strategic lawsuit against public participation) statutes and the First Amendment, some companies believe that short sellers seem to operate as if they are untouchable.
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SEC Enforcement Actions and Issuer Litigation in the Context of a “Short Attack”
SEC Enforcement Actions and Issuer Litigation in the Context of a “Short Attack” By Charles F. Walker and Colin D. Forbes* Issuers faced with a short attack—short selling of the issuer’s stock combined with the spread of negative rumors—may contemplate defensive strategies such as litigation and contacting government regulators, in addition to the investor and public relations efforts that are typically utilized in the wake of negative media coverage. Precedent calls for caution in these circumstances, as the record shows that the results of such strategies are mixed, with the SEC often turning its investigative focus to the issuer, and with costly litigation frequently resulting in compromise. This article begins with a discussion of the recent history of regulatory and legislative efforts to address concerns around short attacks and “naked” short selling. It then turns to a discussion of the SEC enforcement cases and private litigation relating to short attacks, and concludes that the SEC has appropriately brought enforcement cases only in clear-cut instances of fraud, while policing the margins through enforcement of the technical requirements of Regulation SHO. The article shows that the SEC enforcement record in this area, and the proof issues generally attendant to these cases, present important considerations for issuers who perceive themselves under siege in a short attack. A “short attack” on an issuer, in its most blatant form, involves massive short selling of the issuer’s stock combined with the spread of negative rumors (and, in many cases, the spread of misleading or outright false information) about the company in the media.1 Perhaps the most noted alleged short attacks in the recent past are those cited in connection with the demise of Bear Stearns * Mr.
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