Accounting Fraud Cases

If you knew the people or companies involved in accounting fraud and how they did it could help to provide the necessary knowledge so a company could apply that knowledge to his or her own business. This would help cut down on so many fraud cases and accountants could win back the trust and reliability they had before.

 

·        WorldCom: Their accountant used fraudulent accounting methods to hide its declining financial condition. They turned what appeared to be normal daily operating expenses into long-term assets, thereby over-inflating revenue. They did this to make themselves look better than what they really were to help raise their stock prices. Because of what happened, WorldCom filed for chapter 11 bankruptcy protection in 2002. 

·        HealthSouth: HealthSouth is the US’s largest healthcare services provider. In 2003, the company’s founder and CEO was accused of falsely inflating the company’s earnings by $1.4 billion dollars, just to meet investor’s expectations and to raise the company’s stock prices. . Here is the next best thing. Many recruiters and hiring managers go to job boards like Monster, HotJobs, CareerBuilder, and Career Bank, to name a few. These job boards get thousands of hits a day. Going there you may see quite a number of accounting jobs. Keep looking everyday.

·        Adelphia: Adelphia was one of the largest cable companies in the United States. The founder of Adelphia was forced to resign as CEO in 2002 after being indicted for bank, wire, and securities fraud. They basically concealed $2.3 billion in liabilities to make investors thing they were doing better than they were. After this Adelphia declared bankruptcy.

·        Tyco: We all know Tyco and what products they sold. The former CEO of Tyco was convicted of not including more than $400 million of the company’s funds. He was charged with 22 counts of grand larceny for taking $150 million in non-approved bonuses. The total amount was raised to $400 million.

·        Enron: We all have heard of this company and what happened with them. They were the top seventh company in the top ten riches in the nation at one time. The chief financial officer was indicted on 78 counts of fraud, money laundering, and conspiracy. Of course, in 2001 the company had to declare bankruptcy.

·        Cendant: The former CEO of Cendant was accused of fraud after their company merged with CUC International and HFS Incorporated in 1997. The company inflated its revenue by $500 million over a three year period. This cost the company $14 billion in market value, which caused the stock to tumble from $41 a share to $12.

·        Rite Aid: The former CEO of Rite Aid was sentenced in 2004 to eight years for getting involved in a major accounting fraud case. The sentence included a $500,000 fine and three year’s probation.