The Entrepreneurs Advocate

Archive for the ‘Fraud’ Category

I was talking to a friend at a Private Equity Group today who found out that a company they own a portion of is behind on federal withholding taxes. He does not know how big the problem is, but he his worried because as an officer and board member he might be PERSONALLY responsible (gulp).

How can investors, part owners, lenders (seller back note holders) and other affected parties stay informed and protect themselves from tax problems in companies that they are involved with? By using IRS Form 8821 (Tax Information Authorization).

Form 8821 can make sure you are notified of any notice (negative or otherwise) from the IRS. When I was in Asset Based Lending, form 8821 was always included in the loan documents to be executed by new clients. If as a seller you take back a note from the buyer make sure this form is executed. If you invest in or buy a percentage of a company you need to know.

Tax issues are usually a symptom of greater problems. This simple tool can act as an early warning system.

“Tom had this insightful article that I wanted to share, Chris”

“I can’t resist poking at the anti-capitalist crowd-CC”

By Craig Medred | Anchorage Daily News

Two hundred years of glacial shrinkage in Alaska, and then came the winter and summer of 2007-2008.

Unusually large amounts of winter snow were followed by unusually chill temperatures in June, July and August.

“In mid-June, I was surprised to see snow still at sea level in Prince William Sound,” said U.S. Geological Survey glaciologist Bruce Molnia. “On the Juneau Icefield, there was still 20 feet of new snow on the surface of the Taku Glacier in late July. At Bering Glacier, a landslide I am studying, located at about 1,500 feet elevation, did not become snow free until early August.

“In general, the weather this summer was the worst I have seen in at least 20 years.”

Never before in the history of a research project dating back to 1946 had the Juneau Icefield witnessed the kind of snow buildup that came this year. It was similar on a lot of other glaciers too.

“It’s been a long time on most glaciers where they’ve actually had positive mass balance,” Molnia said.

That’s the way a scientist says the glaciers got thicker in the middle. Read the complete story at adn.com

Business Renewal Series: Survive Hard Times, Navigate the Economy and Control Your Own Destiny… 

The Stetson University Family Enterprise Center in partnership with The Turnaround Management Association presents a unique group of seminars, The Business Renewal Series.  

 http://www.turnaround.org/Events/Calendar.aspx?objectID=9647

Survive Hard Times, Navigate the Economy and Control Your Own Destiny is the first of the series and deals with topics that have become increasingly more important as we deal with the economy, rapidly changing business conditions, rising costs and aggressive global competition. Many businesses are in need of a turnaround or renewal in order to survive and to build a platform for long term profitable growth. Recognizing this need and taking action are the first critical steps towards reinventing the business and controlling your own destiny.  Leaders must identify the causes of performance decline, impairment and stagnation early to avoid a crisis. If the company is in crisis mode, they must understand the options and develop an action plan. Strategy, financial capital and human capital must be integrated and aligned into an action plan that is clearly understood, managed and measured for results. 

Mention you saw it in the Bankers Advocate Blog and receive the Early Bird rate of $149.

WHO SHOULD REGISTER?

Executives, managers and other company leaders. Consultants, financial advisors, lenders, attorneys and accountants. Multiple participants from the same company are welcome. 

WHY SHOULD YOU ATTEND?

Business in turnaround or renewal cannot survive without a clear strategic direction and action plan. This program provides a framework to assess the state of the business, understand the options for performance improvement and to take action. The future of the business may depend on attending. 

WHEN?

Friday, November 21 2008 

WHERE?

Stetson Center at Celebration
800 Celebration Avenue

Celebration, FL 34747

SEMINAR FEES 

$189 per individual includes Continental Breakfast, Lunch and Seminar 

$169 per each additional individual attending from the same company 

Fraud is rampant in business today. According to the Association of Certified Fraud Examiners, U.S. organizations lose 5 percent of their annual revenues to fraud — about $652 billion a year. The median loss is $159,000, but one-fourth of the cases result in losses of at least $1 million. Fraud can be difficult to detect. The median length of schemes in an association study was 18 months from when they began until they were detected. Small businesses suffer disproportionately from fraud. The median loss suffered by an organization with fewer than 100 people was $190,000.

My friend John Capizzi, who is a Certified Fraud Examiner offers these Red Flags to look for:

• An employee under financial pressure.
• An employee with personality changes.
• An employee demonstrating poor money management.
• An employee living beyond their means.
• An employee with outside business interests.
• Poor company internal controls.
• Too much control in a single employee.
• Lax management.
• Failure to pre-screen employees.
• Records altered, missing or destroyed.
• Chronic shortages.
• Signatures on records appear to be forgeries.
• Employee drug or alcohol abuse.
• Employee gambling problems.
• Employee gives inadequate answers when questioned about missing supplies, property or funds.
• Customer or supplier complaints about shortages or discrepancies.