Archive for May, 2012

According to an Associated Press story published in both the Chicago Tribune and Peoria Journal Star, a federal judge allowed a motion to sell some, but not all, of Rita Crundwell’s assets.  According to the AP story, the affected assets are four properties in Illinois, one property in Florida, and a $2.1 million motor home.  Her large horse ranch, Meri J, in Beloit, Wisconsin is not affected.  The horse ranch is being operated by federal marshals.

Quoting from the story:

Rita Crundwell has pleaded not guilty to a single count of wire fraud alleging she stole from the small northern Illinois city to pay for a lavish lifestyle and create one of the nation’s foremost horse-breeding operations.

Prosecutors allege that since 1990, the 58-year-old Crundwell stole more than $53 million from Dixon, where she oversaw public finances as the city comptroller since the 1980s. They say she diverted the money to an account she had set up for personal use and misled city officials.

Prosecutors say her scheme unraveled only when a co-worker filling in for Crundwell while she was on an extended vacation stumbled upon the secret bank account. Her arrest stunned tiny Dixon, a small city along a picturesque vein of the Mississippi River about a two-hour drive west of Chicago in Illinois farm country.

Photos of the luxury motor home were uploaded to the HorseForum.  I’m reposting them for readers who have never seen the interior of a motor home valued at $2.1 million.


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Today is Memorial Day in the United States.  It originally started out as Decoration Day, observed on every May 30.  The first Decoration Day was in 1868 for those killed in the American Civil War.  By 1915, when grave decoration with red poppies became popular, Decoration Day had been expanded to cover the graves of all fallen veterans.

In 1971, the U.S. Congress changed the date of Memorial Day to the last Monday in May, coupling the day to a weekend.  That changed everything.  No longer a day only for remembering fallen soldiers, it is now more comprehensive holiday.

I spent a part of yesterday reflecting on my parents, both of whom are now deceased.  I remember many extended family get-togethers with aunts, uncles and cousins.  They were great.  I also remember the many wiffle ball games in which my father played with the Albrecht kids and every other kid in the neighborhood.

This Memorial Day weekend, we focused on creating memories.  Both sons (28 & 24) were home.  They invited some of their 20-something friends.  We had an Indy 500 party, a wiffle ball game, and later on my sons and I played two games of Acquire, one of the best business games ever created.

The Albrecht boys develop a strategy to beat Dad in a game of Acquire.

Debit and credit – – David Albrecht

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Miscellany — interesting items that caught my eye during the week.

Little girl (age 9) from Scotland starts blog, NeverSeconds. It goes viral!

Gotta read, “Little Girl’s Lunch Review Blog Persuades Her School to Serve Healthier Meals.”

If blogs can be written by a 9-years-old girl and can evoke change, then why is it difficult for so many professors and accountants to get started?

Wow!  I picked a winner.  From BusinessInsider, “Google Chrome Just Passed Internet Explorer To Become The World’s Most Popular Web Browser.”

Google Chrome has been my browser of choice for the past 12-18 months.  Prior to that it was Firefox.  Prior to that, I don’t remember.  Oh, I sometimes use Opera.

No surprise here.  From Forbes, “IBM Study: If You Don’t Have a Social CEO, You’re Going to be Less Competitive.”

I’m sure the same characteristic applies both to CPA firms and individually to accounting and finance professionals.  Hint:  a firm hiring an outsider to do all social media activity is not the same as having a social CEO.

Unbelievable!  So says Francine McKenna.  So say I. From Bloomberg, “SEC Staff Ends Probe of Lehman Without Finding Fraud.”

The final item in this week’s list comes from Caleb Newquist of Going Concern. Caleb’s blog is so well done, he was named to Accounting Today‘s list of most influential people in accounting.  In his story, “The Dixon, Illinois Fraud Is the Latest Example of Why Reasonable Assurance Is Bullshit,” Newquist is highly critical of today’s audit:

See? Audits can be great and fraud can still happen! And we wouldn’t be shocked! OR audits can suck and fraud can still happen! And we wouldn’t be shocked! There’s really nothing you can do. The good professor knows, as all auditors, that most people out there don’t have any idea of what an audit really is. Fine, an expectations gap. It’s a crock, but again, there’s really not much you can do about it. You an try to explain to your cousin in Dixon why it’s not the auditor’s job to detect frauds like this and (s)he would look at you, confused, and say, “Then what good is it?” AHA!

Debit and credit – – David Albrecht

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Gene Morphis
Pic credit: Morph’s View

Gene Morphis was chief financial officer of fashion retailer Francesca’s Holdings Corp. until Monday, May 14.  On that day, he was fired for inappropriate social media activity.

Here is the company press release on the termination:

HOUSTON, May 14, 2012 (GLOBE NEWSWIRE) — Francesca’s Holdings Corporation (Nasdaq:FRAN) today announced that it has terminated for cause the employment of Chief Financial Officer Gene Morphis, based on an investigation by the Board of Directors with the assistance of outside counsel, which has found that he improperly communicated Company information through social media. The investigation was launched after the Company discovered this activity on May 11, 2012.

Gene Morphis is a social media type of guy.  He blogs (Morph’s View).  He tweets (@theoldcfo).  He’s on Facebook.  Apparently, his tweeting got him into trouble.  According to Rachel Emma Silverman of the Wall Street Journal in, “Facebook and Twitter Postings Cost CFO His Job,”  some of the postings that might have landed him in trouble include:


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Kenneth Leventhal
Pic credit: University of Southern California

Kenneth Leventhal died on Tuesday, May 8, 2012, at the age of 90.  He is well know for starting the respected accounting firm Kenneth Leventhal and Company.

After completing his bachelors degree at UCLA, Leventhal became a CPA in 1948.  Along with his wife,  Elaine Otter Leventhal, he started his firm in 1949.  It quickly became a leader in servicing the real estate industry.  Kenneth Leventhal and Company was eventually acquired by Ernst & Young, when it was the 9th largest CPA firm in the United States.

The Leventhal School of Accounting at the University of Southern California was named in his honor after he donated $15 million to form it.  He later donated an additional $10 million.

For more information, please read the following.

Debit and credit – – David Albrecht

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Ligia Baciu

Sorry, I just can’t resist this one.  Several California news outlets are reporting that Ligia Baciu, 35, has been arrested on several charges related to her alleged fraudulent activities at Sweet Life Enterprises.  She is due to be arraigned today.  Allegedly, she stole over $230,000.

I can’t help but wonder if she ever mouthed Ralph Krambden’s line from The Honeymooners, “How sweet it is.”  I also wonder if James Taylor in similar circumstances might have sung, “How sweet it is to stealing from you.”

According to CBS Los Angeles,

Prosecutors allege she used the stolen money to buy an engagement ring, pay for fertility treatments [emphasis added], put a down payment on an Audi, as well as paying for car insurance, groceries and other goods at Costco, Deputy District Attorney Marc Labreche said.

CBS Los Angeles had this description after interviewing  Deputy DA Labreche and hearing his allegations:

Baciu, who was responsible for the company’s credit card accounts, allegedly began stealing from the company in February 2008, Labreche said.

She managed to conceal the theft by ordering bills from the credit card companies that she could manipulate to make it look like the expenses were from various other employees, Labreche alleged.

Baciu was laid off from her job in October 2009, but allegedly kept using the credit cards. Her replacement in accounting uncovered the alleged theft in January 2010, Labreche said.

Sweet Life Bakeries, with 251-500 employees, is a subsidiary of Fresh Start Bakeries.

Thanks to Going Concern for the tip.

Debit and credit – – David Albrecht

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Kyle Dodwell is a young CPA at Brown, Smith Wallace, LLP.  I like him, a lot.  He’s active, engaged and upbeat, unlike his video persona in his series of video blogs.

His second installment has been released.  Here is the introduction from the BSW website:

As busy season winds down, Kyle was looking forward to using the frequent flier miles he received after opening a bank account for a nice trip. That’s until he received a 1099 in the mail requiring him to report the taxable value for these miles. Since 2002, the IRS has said that customer frequent flier miles aren’t taxable.

Suddenly this year, as reported by the Los Angeles Times, Citibank sent tax forms to customers that received airline miles as a reward for opening a checking or savings account. So, what’s up with the 1099? Watch what happens when Kyle calls the IRS.

Watch and enjoy.

Mike Bowlan (Marketing Director at Brown Smith Wallace) sends this along:

Kyle’s CPA Video Blog ventures into new territory next month in Vegas! [Association for Accounting Marketing’s annual conference in Las Vegas June 10-13]  It will be Kyle’s biggest, boldest adventure yet!!

For those who missed his world premier video, here it is:

Debit and credit – – David Albrecht

Want more of The Summa? Sign up to receive email notification of posts.  And please follow me on Twitter (@profalbrecht).

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