Posted by Johanna Ortiz.

An ex-executive Andrew Caspersen at New York investment bank was declared guilty to securities and wire fraud. He admitted defrauding investors of more than $38 million, and the judge gave him four years in prison because the defendant’s attorney asked him for leniency for gambling addiction.

Caspersen was a good worker. He graduated from Princeton University and Harvard Law School. Unfortunately, for his addictions, he defrauded investors’ money including his family and friends. “I lost their money” he said “I abused their friendship. I destroyed my family’s name” (news.findlaw.com).

He used to go to an organization which helped him with his alcohol and gambling addictions; however, he never finished his treatment. He always quit. His attorney used this as an excuse to let the judge know that he is not under control and he is unable to think or act as a normal person. The judge declared him with a very real gambling disorder and for that reason he gave him short-term prison sentence. He said to the judge that he learned from this and he is going to retake the treatment.

His defense attorney said his client was very ill with his addictions that he did not care about money, and he just wanted to play. At the end of the day, he lost over $100 million. He had hope that no matter how many times he lost, he would win and take the money back.

In my opinion, Caspersen acted without values, morals, and respect to investors. He knew his addictions and he was irresponsible and quit the treatments. All his irresponsibility were not investors’ fault and he had to pay for his mistakes.

Johanna is an accounting major at the Feliciano School of Business, Montclair State University.

Posted by Gregory Scavelli.

Super storm Sandy had a devastating impact on the North-Eastern portion of the United States, areas like Long Island, New Jersey and Connecticut got trashed because of the regions un-preparedness in cases of the storm. To bring in a personal connection, the area that I am from on Long Island got it particularly bad, the Long Beach boardwalk that was a staple of the town since 1914 was completely broken down and destroyed and after that the town went into rebuilding mode. Now Long Beach is for the most part is better than the way it was before the storm. This was happening the other regions as well, the Jersey Shore was another area that got hit particularly badly. It’s been 4 years since the storm, but now that the re-building process is almost complete a lot of problems are steaming from it.

Since the storm New Jersey state prosecutors have filled criminal chargers to 161 cases for over 15 million dollars on account of fraud. More than one third of those cases have been fired this year. An example of an Ocean County motel pleaded guilty to falsely claiming that he had sheltered Sandy victims to get $81,000 in federal funds.

The problem facing many of these corporations is that many of them have no ethical business policies. For example raising the price of gas in the time of a crisis is very unethical because in most of these crisis situations people are low on money and making the pay extra for basic needs is unethical. Also, taking personal benefit in a crisis situation is also unethical, the example I earlier about the motel using falsified records to get reimbursed is just taking a situation in which people are suffering and using it for gain. Which is just a very un-ethical way of doing business.

Gregory is a sports management and marketing major with a minor in legal studies at the Stillman School of Business, Seton Hall University, Class of 2019.

Posted by Timothy O’Shea.

Tesla Motors, an automotive company in the Automotive Energy Storage industry, “who’s mission is to accelerate the world’s transition to sustainable energy.”(tesla.com) It “was founded in 2003 by a group of engineers in Silicon Valley who wanted to prove that electric cars could be better than gasoline-powered cars”(tesla.com). As of now, all Tesla Cars will be made with complete self-driving software. It is their belief that these self-driven vehicles will help to improve safety while also aiding in the transition to the world’s sustainability. However, Tesla’s autonomy options have had some challenges and have caused Tesla some trouble. Tesla has now faced a number of lawsuit’s regarding false advertising and marketing, more specifically false advertising and marketing of the car’s “Insane Mode”, a performance mode intended for fast acceleration, and also for the car’s autonomous mode.

After a few crashes, one of which was fatal, Tesla Motors has been receiving criticism for the way in which it chose to market and deploy its Autopilot driving-assist system. In the summer of 2016, Tesla was admittedly being investigated by the National Highway Traffic Safety Administration, for its first reported fatality in a self-driving vehicle, while a second potential crash, involving the Autopilot feature, arose. Multiple cases have erected in China after Tesla crashes, with one resulting in fatality, a 23 year old driver whose “dashboard camera showed the car hitting a cleaning truck from behind while traveling on a highway in central Hebei province.”(forbes.com) Another fatal crash took place in Florida, where Joshua Brown, 40 year old supporter of Tesla, was hit by a tractor trailer which was undetected by neither driver nor autopilot. A final crash that raise concern against Tesla’s Autopilot software occurred on the Pennsylvania Turnpike on July 1, where Albert Scaglione reportedly activated the self-driving feature prior to hitting the guard rail “off the right side of the roadway… crossed over the eastbound lanes and hit the concrete median.”

Amongst the many crashes and accusations, Tesla has continued to stand behind it’s autopilot saying that the crashes resulted from human error, rather than system error, and in most cases the opposing parties have not been able to prove otherwise. On a bold posting on its website, the company said “there is no car company in the world that cares more about safety than Tesla and our track record reflects that.”(usatoday.com) This statement resulted from the NHTSA’s disclosure it was further investigating the electric car company for the possibility of having their customers sign non-disclosure agreements that would impede reporting. With repeated complaints, the NHTSA continues to investigate the validity of Tesla motors vehicle safety but has not found any major problems at this time. From suspension concerns, to accusations of false advertising, to crashes and claims against the Autopilot feature, Tesla remains under consistent fire and has been on its toes ready to adapt and turn its feedback into more environmentally, economically, and logistically friendly features.

In more current news, Tesla has been running into some speed bumps in its growth and develop in Germany. The Federal Motor Transport Authority of Germany, has recently sent a request to Tesla asking them to stop advertising the “electric vehicles’ Autopilot function, claiming that this feature misleads drivers into unsafe inattention to the road.”(eetimes.com) Yhe claim released in late September, implies that Motor companies must refrain from using misleading terms like “auto-pilot”, “automated”, or “self-driving” if their cars do not possess the ability to control themselves completely independent of human involvement.” (eetimes.com) Tesla has responded saying its “Autopilot always requires that the driver remain engaged and ready to take over at any time.” (electrek.com)

Timothy O’Shea is an undecided business major at the Stillman School of Business, Seton Hall University, Class of 2019.

Sources:

Tesla issues thorough response following harsh critique of Autopilot by German authorities

http://www.eetimes.com/document.asp?doc_id=1330633

https://www.tesla.com/about

http://www.forbes.com/sites/dougyoung/2016/09/19/tesla-takes-new-china-hit-with-driver-death-lawsuit/#37346299284f

Posted by Magdalena Jasionowska.

Precision and honestly are fundamental when it comes to accounting. Any error can have some consequences, but it is important to remember that fraud is a serious crime. Here is a brief summary of the most recent tax fraud cases.

Christopher Haynes, a franchise owner of Liberty Tax Service has been preparing false income tax returns in order to increase clients refunds at three franchises. A federal court has permanently barred the franchisee for all three locations, and Christopher Paul Haynes of Irmo, South Carolina, from preparing federal tax returns for others. Christopher Haynes and his employees prepared returns that included misstatements such as false or increased Schedule C income and expenses, false filling statuses, number of dependents and inappropriate employee business expenses.  Haynes’s Liberty Tax Service offices have prepared more than 9,700 federal income tax returns since 2010 and and for that reason they have to provide the government the list of all their costumers whom he and his employees prepared a return from 2010 till todays day.

Nicole Coleman,34, the owner and operator of Comunnity Tax Assosociates was sentenced on Wednesday to 36 months in prison for obtaining more than $1.65 million in fraudulent tax refunds. “Coleman, filed federal income tax returns for herself and clients and knowingly made false entries to inflate refunds for clients. Coleman then took a portion of the refunds as a fee.” She, definitely harmed her clients, who trusted her to prepare and file their income tax returns.

An attorney William Doonan, 69, who operated a tax preparation in  Bronx, New Yoork, has pleaded guilty to charges related to his participation in filing fraudulent returns and falsely claiming more than $6 million in bogus deductions. Since 2009, Doonan regularly prepared and filled clients returns that were fraudulent. He’s been adding false medical expenses, state and local taxes, home mortgage interest deductions, charitable gifts and other expenses.

In conclusion, fraud, embezzlement, and misappropriation can occur in every type of business, even in accounting, the most trusted profession.

Magdalena is an accounting student at the Feliciano School of Business, Montclair State University.

Posted by Rafaela Andrade.

Costco wholesale store is now using new Visa credit cards and no longer American Express after fifteen years.  Under a new contract, Citigroup, Inc. will now be the issuer for their credit cards along with Visa, Inc. Early this year, Costco reported that their earnings were not met and the stock price had dropped. The reason why the wholesale store left and would not renew the contract with American Express is due to economic reasons. When the news of this broke to the public, the “credit- card company’s stock fell 6.4%.”

Costco only accepted American Express for the past fifteen years. The wholesale store represented around $80 billion of their business and just on interest it was about $14 billion. This was clearly a major hit for American Express. AmEx is also limited in certain retail stores. It is said that even though AmEx offers great rewards it is costly for the merchants, costing the retailer about 3.5% where Visa and MasterCard have a cost around 2-3% or less. Costco members will have rewards and allowing them to use their new Visa cards where they are accepted.

American Express provided deals to the members such as 3% cash back on gas, 2% cash back on restaurants and even when traveling, 1% on Costco purchases and other purchases. Visa offers 4% cash back on gas, 3% cash back on restaurant and eligible travel purchases, 2% cash back on purchases from Costco, and 1% on all other purchases. This deal is great way to get extra cash and there is no annual fee for the credit card. Many Customers are happy with the results while others are not as happy. Costco had to do what is best for the company (enter a new contract) in order to keep generating business.

Rafaela is an accounting major at the Feliciano School of Business, Montclair State University, Class of 2018.

Sources:

http://www.latimes.com/business/la-fi-costco-visa-20150302-story.html

http://www.marketwatch.com/story/5-things-to-know-about-the-costco-and-amex-breakup-2016-02-11

Posted by Aliyah Ponton.

A former executive, Andrew Caspersen, at a New York investment bank admitted swindling investors of more than $38 Million. As a result, he was sentenced to four years in prison. During court he told the U.S. District Judge, Jed Rakoff, “I chose gambling over everything.” The Judge cited his gambling as a reason for leniency. Andrew Caspersen is 40 years old and is a graduate of Princeton University and Harvard Law School. He also defrauded his job, PJT Partners Inc., of over $8 Million.

Caspersen is the son of the late Finn M.W. Caspersen, who was a philanthropist and former chief executive of Beneficial Corp. “I destroyed my family’s name,” said Caspersen. In the court room it was packed with family and friends as well as members of organization he has joined. Many of his friends and families argued for leniency to the judge. Rakoff imposed Caspersen’s prison term by giving him way less then the 15 years that was entitled for by the sentencing guidelines and also less than the 7 ½ years recommended by the Probation Department.

Caspersen stole from his friends, family, and from investors. He took advantage of his Wall Street pedigree and even stole from charities. “Using his Wall Street pedigree, Andrew Caspersen deceived and defrauded investors – including his own family and friends and a charity – out of tens of millions of dollars,” said the U.S. Attorney Preet Bharara. When faced by the judge Caspersen said that he was dedicated to continuing treatment for his gambling addiction but Assistant U.S. Attorney Christine Magdu said Caspersen failed to follow through with his gambling addiction treatment. She also added that Caspersen quit therapy after only seven sessions. In the end, after going to court and fighting for leniency, Caspersen was sentenced to 4 years in prison.

Aliyah is an accounting major at the Feliciano School of Business, Montclair State University, Class of 2019.

Source:

http://news.findlaw.com/apnews/feb61e4e2ac8475b9110b70ba45e9928

http://abcnews.go.com/US/wireStory/executive-ny-bank-years-prison-38m-fraud-43313982

Posted by Nick Farkas.

A McDonald’s’ franchise in California has repeatedly gotten into legal trouble throughout the past few years because they were not paying and recording the overtime of their employees correctly. The Smith family owns the franchise and have around 800 employees working for them. They initially settled the claims for $700,000 but did not learn from their mistakes.

McDonald’s is not entirely liable because it is a specific franchise involved; however, they are going to pay the $1.75 million in damages and $2 million in legal fees to protect the brand. McDonald’s has also agreed to train the Smith family on the use of corporate software designed to ensure compliance with California’s distinctively strict employment laws.

This is not the end of McDonald’s’ lawsuits and it is certainly not the beginning. Earlier this month, a union-backed group filed sexual harassment complaints on behalf of workers. McDonald’s has to decide which cases are worth fighting, and which cases they should automatically plead guilty. These decisions are based on risk and image.

Nick is an accounting major at the Feliciano School of Business, Montclair State University.

Posted by James Awad.

Florida’s death penalty law has been slightly changed after their Supreme Court ruled that there needs to be unanimous support from the jury to sentence someone to death.  This means that in Florida you now need ten or more jury member’s consent to use the death penalty.   The issue had been raised by Timothy Hurst “a death row inmate whose appeal led lawmakers early this year to rewrite the state’s death penalty law”.  He believed that the death penalty was a violation of his Eighth Amendment right.   In light of the court’s decision the justices of Florida “also ordered that Mr. Hurst have a new sentencing hearing for his conviction for a 1998 murder in Escambia County, in the Florida Panhandle.”

There are about thirty states that still have capital punishment and most of them require that there be unanimous support by the jury.  This highlights the movement toward eliminating the death penalty altogether in the United States.  Many people do not agree with it and about twenty states have banned it such as New Jersey and New York.  There are a large group of people who say that it violates your Eighth Amendment right which pertains to cruel and unusual punishment.

In Florida “The Florida Department of Corrections said Friday that the state was housing 385 prisoners who had been sentenced to death”.   It seems that now that the law has changed, many of these men and women will receive retrials and most likely get their death penalties taken away.  Most of these people, like Mr. Hurst, have been appealing and prolonging the process for years.  In the case of Mr. Hurst, he had avoided the death penalty for more than fifteen years through appeals.

James is an accounting major at the Feliciano School of Business, Montclair State University. 

Posted by Anas Khalil.

A former executive at a New York investment bank who admitted defrauding investors of more than $38 million was sentenced to four years in prison by a judge who cited his gambling addiction as reason for leniency.

Caspersen is a gambler and an alcoholic who put his family members and friends in a situation of losing millions of dollars through an elaborate scheme involving a make-up of a private equity ventures, with a fake mail addresses, and a fake fictional financier. Caspersen had a gambling illness that once he hit a high of over $100 million one day and bet it all the next on whether the market would go up or down. Thus, he was left with nearly nothing at the end of the trading day.

I think Caspersen’s family members and friends who lost millions of dollars should’ve know that an alcoholic gambler should never have an access to big chunks of dollars. A person who is addicted to gambling will not take a consideration that the money he is using does not belong to his pocket and that he is responsible to turn back the money to who it belongs. However, Caspersen will just gamble with all the money he will have an access to thinking he will earn back the money he lost.

When you have big money, you should be more aware of how you invest your money and to whom you lent it. Caspersen’s family members and friends should have never lent Caspersen any money the minute they knew that he was an alcoholic and a gambler, but unfortunately it is too late to say this.

In conclusion, Caspersen imposed a prison term that fell well short of the 15 years called for by sentencing guidelines or the 7 ½ years recommended by the court’s Probation Department. Caspersen is now going to face jail time which is the lesson for every criminal that breaks the law and put other people in impasses.

Anas is an accounting major at the Feliciano School of Business, Montclair State University, Class of 2018.

Posted by Navjoat Aulakh.

PepsiCo’s famous ‘healthy’ beverage line, Naked Juice, is being stripped down and exposed for it’s misleading marketing tactics.  The line of beverages features images of various fruits and vegetables, and claims to be ‘all natural’.  The CSPI (Center for Science in the Public Interest) has argued that “a single 15.2-ounce container (the smallest option) contains 61 grams of sugar, about 50% more sugar than a 12-ounce can of Pepsi”.  The American Heart Association’s suggested sugar intake is 37.5 grams a day, PepsiCo’s Naked Juice almost doubles this suggested amount.

Although the lawsuit is less than two months old, it is expected to make impact in due time.  CSPI is asking that the company be more transparent in the ingredients of the drink, and to compensate monetary damages to customers.  Although the compensation of damages is not likely, PepsiCo will most likely have to change it’s marketing tactics.  The CSPI has a strong history of exposing the misleading marketing of products, and has even caused changes in rival companies such as Coca-Cola.

Navjoat is an accounting major at the Feliciano School of Business, Montclair State University, Class of 2019.