ZZZZ Best's Story

Minkow 's business had been clearly a Ponzi scheme. He promised investors highly returns on the insurance restorations business, but in reality, investors were being repaid with money from new investors. Some of the loans were negotiated at outrageous rates of interest so that they were obtained fast enough to pay off earlier loans. ZZZZ Best did operate its carpet-cleaning business which differed itself from a typical Ponzi and the carpet-cleaning division won high marks for its quality.iii However, its insurance restoration division was totally a phony department and little real business existed.

(Maurer) The Con Artist skillset in selecting the most valuable information makes his attending or processing of what is said further advance his agenda and sets him up to respond in a way that gains more confidence from the

Even though Skilling was committing crimes, such as fraud, he was being recognized for his accomplishments. Mr. Skilling was training Andy Fastow to become an accomplished individual not only criminally, but financially as well. Through all that Andy Fastow absorbed from Skilling, he started his criminal behavior. Andy Fastow created bogus companies to keep the companies debt a secret from others. With this entire event going on Fastow took money and implemented it into his personal accounts. When criminals steal money they tend to do it in small amounts, so others do not discover it, but eventually it gets to a point that it gets so out of control that the person committing the crime cannot stop because the rush is high. He felt as if what he was doing was perfectly acceptable because it should have been part of his daily routines. Since criminality is beyond social control, he had no issues committing them. He continued his behavior and Mr. Fastow only developed his ideas for the better. All of the top executives created an environment of intimate business interactions. They believed that deception was justified and “fraud is the reality” (Magnolia Home Entertainment).

This shows that Minkow is an egoist because his only concern was himself and how he could benefit himself and did everything to make sure he was continuing to make money. He defies the 6 Pillars of Character, which are trustworthiness, respect, responsibility, fairness, caring, and citizenship. As the case was briefly explained Barry broke each pillar by lying to everyone and creating the phony company. He was also lying about his revenue and overcharging customers for services, which is unfair because he is stealing from people who trusted him. He had the responsibility to do what was right and didn’t because he didn’t care about anyone but himself and becoming successful.

In fraud committed against organizations, the victim of fraud is the employee’s organization. In frauds committed on behalf of an organization, executives usually are involved in some type of financial statement fraud; typically, to make the company’s reported financial results appear better than they actually are. In this second case, the victims are investors in the company’s stock. A third way to classify frauds is via the use of the ACFE’s occupational fraud definition, “the use of one’s occupation for personnel enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets” (ACFE, 2010). The ACFE includes three major categories of occupational fraud: asset misappropriations involves the theft or misuse of the organization’s assets, corruption involves the wrongful use of influence in a business transaction in order to procure benefits contrary to their duty to their employer, and fraudulent financial statements involving falsification of an organization’s financial statements for personal gain.

In conclusion, Kozlowski and Swartz were both found guilty of breaking the law on different accounts, and receiving jail time as a part of their sentences was the correct punishment (Sorkin, 2002). These two men stole hundreds of millions of dollars from Tyco International through fraudulent claims, and used the money to pay for houses, apartments, events, and shopping expenses (Sorkin, 2002). Over the amount of time Kozlowski and Swartz were stealing from their company, they had a plan of how they were going to obtain extra profits, which was committing fraud and scamming the customers and company, and even the employees (Sorkin, 2002). It is important that large corporations, and even small businesses, do not oversee white-collar crime because

I think that any lier such as Stephen Glass would a person that puts a huge amount of thought into everything – and that is why they are con artists. However Stephen Glass struggled to think on his feet when bombarded questions by the other company and Chuck himself. I think that is the key differentiator between hiring someone like Stephen Glass and hiring an honest and talented person. Ideally, I would use some method to force them to think on their feet in a normal “editorial workplace” situation – for example, be given a little bit of context of a certain event, and to be able to create a “factual” story entirely based on the given

Often time, people who commit fraud will use rationalization to justify their actions. A few common methods are to convince themselves that what they are doing is legal and that it is necessary as indicated by both Bucy et al.’s research (2008) and Dellaportas’ work (2013). Others have deployed Sykes and Matza's neutralization technique to help alleviate any guilt (Dellaportas, 2013; Trompeter, Carpenter, Desai, Jones, & Riley Jr., 2013). However, the key point here is that they must first view their action as wrong or else there will be no need to rationalize their actions (Trompeter et al., 2013). Mr. Boghossian in his court statement denied his wrong doing despite mounting evidence that pointed towards him committing fraud (R. v. Boghossian, 2015a), which shows that he is attempting to rationalize his behavior to alleviate himself of any guilt. Even though we now know significantly more about fraud then we used to, there is still an alarming increase in the rate of fraud (Wolfe & Hermanson, 2004), but perhaps by integrating criminal theories, we can grasp a greater understanding of why perpetrators commit fraud to better prevent them for doing so.

Records falsification was not the only illegal activity the Rigas family was wrapped up in. The family used company funds, unbeknownst to their investors, to finance personal endevours and interests. Examples include using corporate money to build a $12.8 million golf course on the Rigas property, using the company plane for personal vacation trips including a safari to Africa, and funding for two Manhattan apartments for his family (Markon, 2014). Not only this, but John Rigas purportedly used the company jet to fly a Christmas tree two times to his daughter in New York (Barlaup, 2009)! All of these incidents are just brief excerpts of the fraud and misuse of company funds that John Rigas and his family committed without any intention of ever paying back into the company. These actions, namely lying and stealing, prove to be the heart of the two moral issues that will be further analyzed.

“The first leg of the fraud triangle represents pressure. This is what motivates the crime in the first place. The individual

Jordan Belfort was supremely effective in business communications merely because he was able to incorporate the three most basic methods. Each method had a direct effect on the corporation and made even the most numskull employees seem brilliant. However, not to say Jordan Belfort was a mastermind, but he and his employees represented the epitome of negative business communications as well. With a formula that included drugs, partying, and sex he was setting himself up for disaster.

Many financial companies fail for various reasons that include fraud and the manipulation of assets within the company. The research done in the paper will discuss financial companies that have been affected because of fraud and the way they are ran. This will show how companies develop their organization amongst the managers and create communication throughout the Company. Also, there will be knowledge of competitive teams and what the companies bring to the table about while sustaining that business. Another way fraud develops is through the Shareholders in the company and how they control the stocks and make them

He created fake insurance restoration contracts for ZZZZ Best. This scheme was undetected by Greenspan, the company’s auditor, prior to going public. Greenspan believes that had performed his due diligent as an auditor, however Minkow had covered his tracks. Greenspan had reviewed the backup documents of the jobs, which Minkow had counterfeited. Greenspan had also contacted Tom Padgett, principal officer of Interstate Appraisal Services. Little did he know, Padgett is part of Minkow’s scheme. Minkow had created Minkow had created fake companies; he had his friend Padgett as a principal officer of them. Greenspan also missed the red flags because there were money coming in as payments to the jobs. Later it was revealed that the deposits were just an internal

Essentially, all three elements of the fraud triangle must be present for fraud to be committed: pressure, opportunity, and rationalization. Additionally, nine factors provided the atmosphere for the perfect fraud storm of 2000 through 2002. The nine factors included: economy, moral values, incentives, expectations, debt, accounting rules, auditor dependence, greed, and educator failures (Albrecht et al., 2012). When combined with the elements of the fraud triangle these factors enabled organizations such as Enron and WorldCom to commit the fraudulent activities that resulted in this perfect storm.

The ZZZZ Best case was such that management set out to conceal the fraud from the Securities and Exchange Commission, their clients and investors, and the auditors engaged to conduct the audits of their public financial statements. The foremost question is, should said auditors be held accountable for their failures in cases where management goes to excessive lengths to purposely conceal such fraudulent activities from the auditors. The