Posted by Mohammed Almanqari.

Uber Company is always thought of being sued now and then for one or two issues. Apparently, the company has sued an advertising company called Fetch Media. Uber has taken to court Fetch Media accusing it of click fraud. The company had improperly billed Uber for online advertisements, which were not genuine. Fetch Media took advantage of the same and benefited from application downloads that did not belong to it. Fetch Media is owned by Dentsu, one of the largest advertising company in Japan. The case was filed by Uber on 19^th September 2017 in the US District Court in San Francisco.

After placing the charges, Uber said that it expected not less than forty million dollars as compensation for the damages caused by Fetch Media. However Uber is not fond of taking to court most of the issues it faces; in fact, according to report prepared by Bloomberg, Uber has been a plaintiff twice but has been accused in more than 250 cases. Ever since the internet became a money-making platform, fraud related to online advertising has been on the rise. “One of the biggest challenges we face as digital marketers is to reduce mobile ad fraud.” This was according to the chief executive of Fetch Media, James Connelly. According to the head of media at Fetch Company, Steve Hobbs, a big percentage of downloads from Fetch`s system are noted as invalid or not genuine.

Uber became aware of this fraud during a period when it was putting efforts to shut down and avoid a scandal that was different. Uber Company then requested Fetch Media not to post any advertisements on a certain website called Breitbart news which was being run by the former chief strategist of President Donald Trump. However, ads stills appeared on that site. Fetch canceled the running of ads from any network that was related to Breitbart but this did not reduce the number of application downloads. There is a specific fee paid to Fetch by Uber when a customer downloads the company`s application. From the years 2015 to 2017, Uber had paid close to $8.4m for ads regulated by Fetch Company.

Mohammed is a graduate student at the Feliciano School of Business, Montclair State University.

Reference:

http://www.fin24.com/Tech/Companies/uber-goes-on-rare-legal-offensive-suing-ad-agency-for-fraud-20170919

Posted by Alexa Constantine.

The New York Times on October 11th of this year released the article describing Wells Fargo’s fraud scandal that was brought to the public eye last month. The ethics scandal came to light last month, but the fraud has been going on for years, maybe even a decade with the first report in 2005. Julie Tishkoff in 2005 wrote to the Wells Fargo human resources about how she saw employees setting up sham accounts, forging customer signatures, and the sending out of unsolicited credit cards. Her complaining went on for four years. Tishkoff was not the only employee who was complaining to the internal ethics hotline, the human resources department, and to the managers and supervisors.

In 2011, John G. Stumpf, the board chairman, received at least two letters from Wells Fargo employees describing the illegal activities they have witnessed. Mr. Stumpf became president the year Julie Tishkoff wrote to human resources. In September of this year, Mr. Stumpf testified in front of Congress, twice, stating that, “he and other senior managers only realized in 2013 that they had a big problem on their hands — two years after the bank had started firing people over this issue.” In 2013, Wells Fargo launched the internal investigation within their company for the fraud they realized that was happening. But by then, the prosecutors and regulators caught on and in May of 2015 a lawsuit was filed. The Los Angeles city attorney filed the lawsuit for the creation of unauthorized accounts against Wells Fargo. The case was settled this September of 2016.

After the lawsuit settled, Mary Eshet, spokeswoman for Wells Fargo said, “We have made fundamental changes to help ensure team members are not being pressured to sell products, customers are receiving the right solutions for their financial needs, our customer-focused culture is upheld at all times and that customer satisfaction is high.” And since September 8th, Wells Fargo will pay $185 million in fines for the opening about two million customer accounts and credit cards without authorization. Wells Fargo is taking responsibility for the scandal and is making changes to the company.

The scandal still continues after the settlement. Former employees whose are suing Wells Fargo state that many of the managers at the branch level and the people who heard their ethics complaints are still employed. The employees who complained and brought to light the fraud within the company lost their jobs shortly after they complained. Between 2011 and this year, Wells Fargo terminated the employment of 5,300 workers, “around 10 percent of those worked at the branch manager level or above, according to the bank, but only one — an area president — had a high-level management role.” The whistleblowers lost their jobs while the people who should have acknowledged the fraud kept their jobs. Mr. Stumpf acknowledged the outrage of former employees about how the bank should have heeded what they said were warning and taken action earlier by saying, “We should have done more sooner.” Mr. Stumpf’s answer does not satisfy former employees.

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

Posted by Anna Fintor.

Wells Fargo is currently involved in a legal scandal in which it is said to have opened bank accounts and credit cards without the costumer’s consent. According to Reuters, “The U.S. Consumer Financial Protection Bureau and other regulators ordered United States’ third-largest bank by assets to pay $190 million in fines and restitution to settle civil charges.” The scandal has been going on for several years and there were as many as 2 million accounts opened illegally.

Wells Fargo has been known for its “high-pressure” sales culture, which one of my personal friends who has worked in one of the branches can account for. The Bloomberg article I have read describes how anonymous users have been posting cartoonish videos on YouTube presenting the negative work atmosphere at Wells Fargo. The videos show how management pressured and threatened workers that if the unreasonable goals were not met the workers would be let go.  It is suspected that the videos were created by employees as far back as in 2010.

While reading the articles, I remembered one of the discussions from class of how in large corporations top executives can pressure the bottom level workers to commit the illegal activity. One of the YouTube videos shows that bankers received $5 McDonald’s gift cards for opening a new account, while the executives received generous bonuses. In my opinion that’s very unethical and just wrong.

In the recent weeks the CEO, Jhon Stumpf has resigned and Wells Fargo continues to be under investigation. I feel like this situation is going to hurt Wells Fargo not only financially but also create bad reputation. Due to the popularity of social media, the videos will spread to a vast number of the population, including to those who may not be keeping up with the news.

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

Sources:

https://www.bloomberg.com/gadfly/articles/2016-10-21/psst-regulators-watch-videos-for-bank-scandal-after-wells-fargo

https://www.bloomberg.com/gadfly/articles/2016-10-21/psst-regulators-watch-videos-for-bank-scandal-after-wells-fargon fines and restitution to settle civil charges

http://www.reuters.com/article/us-wells-fargo-accounts-california-idUSKCN12J2O

Posted by Ryan McNeilly.

Something we have come to know as Americans is that three things are certain in life. We will live, we will die, and we will pay taxes. Currently in the news, President’s Trump new tax plan has become the hot topic of discussion. People are disappointed to see another tax cut come about that seems to benefit the top 1% of society. Even some of the richest man in the world, like Warren Buffet and Bill Gates, are speaking up against the new plan because they feel that they do not need more money. They think they need to be giving more of it away so that people who live from paycheck to pay check can have a little bit more leeway and a better opportunity to increase their standard of living.

This article posted by Politico looks at this tax law and delves deeper to see what is occurring behind the scenes. They set the stage by opening the article with “A political battle over the fate of hundreds of regulations and other guidance for the new tax law may soon land on President Donald Trump’s desk, forcing him to choose between two of his favorite Cabinet members.” This alone is enough to capture the attention of any reader. As you continue to read you come to find out that the two Cabinet members they are talking about are Steven Mnuchin the Treasury Secretary and Mick Mulvaney the White House budget director.  The President must decide who will get to define the laws and regulations within the tax act.  This is crucial because the vision of the treasury differs from the view of the budget director.

This dispute has a greater impact than people see because now two crucial sectors of the White House will now be pitted against one another. With this occurring internally, it could hinder the President’s goal for growth. His goal is to get this plan into action, but he will not be able to unless an agreement occurs. The article states “OIRA and Treasury have been going back and forth for years over which entity should have final say over the department’s regulations.” This pressure has increased because of the decision date is slowly approaching. Politico speculates that the OMB has already made a deal with the White House. If this is true, then the OMB will get control of regulations and guidances for this tax act. None of this is confirmed so now we must wait and see how this internal debacle sorts itself out.

Ryan is a finance and information management systems major at the Stillman School of Business, Seton Hall University, Class of 2020.

Source:

Link: https://www.politico.com/story/2018/02/23/tax-law-white-house-power-struggle-364885

Posted by Lindsey Pena.

In business, ethics are strong guiding principles that aid managers, employees, and investors to correctly conduct business transactions. When ethical matters are disregarded, the end result is fraud, embezzlement, among many other illegal actions. One of these illegal actions is called a Ponzi scheme. Perhaps the most famous Ponzi scheme was devised by Bernie Madoff, a well-respected financier, who conned investors out of an estimated $65 billion. Madoff was caught in December of 2008 and charged with 11 counts of fraud, perjury, theft, and money laundering. He ultimately faced 150 years in prison as a result of his decades long Ponzi scheme.

Because of the magnitude of this Ponzi scheme, eight years later, the consequences are still being addressed. Recently, the estate of Stanley Chais, one of Bernie Madoff’s friends, agreed to pay the victims of Madoff’s Ponzi scheme $277 million to settle claims that insisted Chais profited from the scheme. Irving Picard, a trustee liquidating Madoff’s firm, has recovered more than $11.2 billion for the investors who were conned. They achieved this my suing the banks and offshore accounts that hid the money in addition to investors who profited from the fraud. In the 2009 lawsuit against Chais and his wife, Picard claimed that they “reaped about $1 billion in profit from fake securities transactions at Madoff’s firm.” Chais also reaped rewards through fees that he would earn when he gave his customer’s money to Madoff’s firm. In addition to this, Chais was also sued by the SEC in 2009 because he “steered assets from three investment funds to Madoff, “despite having clear indications Madoff was engaged in fraud.”

Chais, along with five of Madoff’s employees, were not the only ones who received consequences. Thousands of innocent investors trusted Bernie’s reputable, veteran background hoping to make profit from their investments. While reading this article, I could not help but to think about the Kantian ethics which states that a person should evaluate their actions by the consequences if everyone in society acted the same way. Bernie Madoff made the exception for himself when he decided to execute the treacherous plan and the consequences of his actions will cost him the rest of his life.

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

Posted by Basil Almubaddil.

On July 14, 2017, a renowned rapper by the name DMX pleaded not guilty to 14 charges against him concerning tax fraud. This was after he had spent a night in jail and later posted a $500,000 bond and he was released. According to the prosecutor, DMX whose real name is Earl Simmons had evaded $1.7 million in taxes during the peak seasons of his career from the year 2002 to 2005. “DMX allegedly went out of his way to evade taxes, including by avoiding personal bank accounts, setting up accounts in other`s names and paying personal expenses largely n cash.” The prosecutor clearly stated that no one  has the right to evade taxes regardless of title or fame. “Celebrity rapper or not, all Americans must pay their taxes.”

In addition, DMX was charged with failing to file tax returns from 2010 to 2015 in the United Bankruptcy Court. The bailed agreement argued that DMX is confined to the New York City area. However, his lawyer, Murray Richman, said that he was going to request permission for DMX to travel and perform his shows during the summer season that followed.

Mr. Simpson is quite a wealthy man.  This is because between 1998 and 2003, five of his albums ranked No.1 on the Billboard 200 chart. Mr. Simpson has also acted in various films like “Romeo Must Die” and “Belly” among other films. After the hearing on the charges against him, DMX told the reporters that his religious faith had been so helpful to him in dealing with legal troubles. “It`s allowed me not to be scared of the situation and face it head-on.” In addition, DMX told the reporters that his life was in God`s hands.

Basil is a graduate accounting student at the Feliciano School of Business, Montclair State University.

Reference:

Posted by Caroline Weeks.

On November 5, 2015 a dam in the Brazilian city of Mariana collapsed, resulting in multiple causalities and irreparable damage to the surrounding cities and ecosystems. In total, nineteen people lost their lives. The collapse also “released a torrent of sludge that washed away villages, displaced hundreds of people, and traveled more than four hundred miles through southeast Brazil’s Rio Doce basin before reaching the Atlantic Ocean.” It is said that this is “believed to be the biggest disaster of its kind anywhere.” The yearlong criminal investigation into the collapse recently ended and has resulted in homicide charges being filed against twenty one people in connection with the disaster. Some of the people charged are “current and former top executives of mining giants Vale SA and BHP Billiton Ltd., and Samarco Mineração SA.” In addition, employees of a consulting firm that performed checkups on the dam were charged with “presenting false stability reports.” This disaster is an example of companies being concerned solely with short run profit maximization and an inherent lack of corporate social responsibility.

The federal prosecutor in Brazil has stated that “the motivation of the homicides was the excessive greed of the companies.” It has been detailed that the victims were killed by the “violent passage of the tailings mud” and that they “had their bodies mutilated and…dispersed across an area of 110 kilometers.” These innocent employees died a cruel and painful death at the hands of corporate greed. Samarco focused on short run profit maximization and did not take into account the effects of their actions. The prosecutor says that there is evidence that Samarco, and its shareholders, were “aware of chronic structural problems” as early as April 2009. If this is true, the company knew about critical problems with the structure for more than 6 years and chose to continually ignore the warnings. The board not only failed to make the facility structurally sound, but responded to these structural issues by “pressuring the company to extract more iron ore.” If the company had simply taken head to these warnings they would’ve prevented the loss of innocent lives, the damage of surrounding communities, and incredibly expensive lawsuits along with a permanently tarnished reputation. These findings show the goal of the company was to maximize profits as quickly as possible. They did not take into account the repercussions of a dam collapse and innocent people paid the price for their greed.

This fatal event also details Samarco’s lack of corporate social responsibility. The company chose to focus on profits and purposely chose to ignore the issues with their facility. The company did not act ethically and they certainly did not take into account the surrounding communities. As a result of the dam collapse, families have lost their homes, and even entire communities have been washed away. Not only have these villages been destroyed, but so has the surrounding ecosystem. The river “is still tainted a rusty red form the sediment” that washed through the river basin after the dam collapsed. If the company had acted ethically, they could’ve saved lives and communities. This disaster is a prime example of executives acting carelessly in the hopes of inflating their bank accounts.

Caroline is a mathematical finance major at the Stillman School of Business, Seton Hall University, Class of 2019.

Posted by Lindsey Pena.

In business, ethics are strong guiding principles that aid managers, employees, and investors to correctly conduct business transactions. When ethical matters are disregarded, the end result is fraud, embezzlement, among many other illegal actions. One of these illegal actions is called a Ponzi scheme. Perhaps the most famous Ponzi scheme was devised by Bernie Madoff, a well-respected financier, who conned investors out of an estimated $65 billion. Madoff was caught in December of 2008 and charged with 11 counts of fraud, perjury, theft, and money laundering. He ultimately faced 150 years in prison as a result of his decades long Ponzi scheme.

Because of the magnitude of this Ponzi scheme, eight years later, the consequences are still being addressed. Recently, the estate of Stanley Chais, one of Bernie Madoff’s friends, agreed to pay the victims of Madoff’s Ponzi scheme $277 million to settle claims that insisted Chais profited from the scheme. Irving Picard, a trustee liquidating Madoff’s firm, has recovered more than $11.2 billion for the investors who were conned. They achieved this my suing the banks and offshore accounts that hid the money in addition to investors who profited from the fraud. In the 2009 lawsuit against Chais and his wife, Picard claimed that they “reaped about $1 billion in profit from fake securities transactions at Madoff’s firm.” Chais also reaped rewards through fees that he would earn when he gave his customer’s money to Madoff’s firm. In addition to this, Chais was also sued by the SEC in 2009 because he “steered assets from three investment funds to Madoff, “despite having clear indications Madoff was engaged in fraud.”

Chais, along with five of Madoff’s employees, were not the only ones who received consequences. Thousands of innocent investors trusted Bernie’s reputable, veteran background hoping to make profit from their investments. While reading this article, I could not help but to think about the Kantian ethics which states that a person should evaluate their actions by the consequences if everyone in society acted the same way. Bernie Madoff made the exception for himself when he decided to execute the treacherous plan and the consequences of his actions will cost him the rest of his life.

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

Posted by Kelly Shaw.

Morris Zukerman, age 72, plead guilty in June 2016 to obstructing the IRS as well as tax evasion. He was sentenced to 70 months in prison for his criminal offenses in March 2017. Morris sold a co-owned petroleum products company, which was owned by a subsidiary of his investment firm M.E. Zukerman & Co., and then proceeded to mask the income he received from the sale. By doing so, Morris was able to evade taxes on his $130 million in income in 2008.

One may wonder how Morris was able to hide such a large profit from his accountants and receive clean audits over the years. The cover story that was given stated that in 2007, Morris transferred ownership of the subsidiary to a trust account. He even went as far as creating false documents to support his story such as a promissory note. By not reporting the $130 million sale, M.E. Zukerman & Co was able to avoid paying $33 million in corporate income taxes.

To add to Morris’s list of crimes, he also claimed a $1 million charitable contribution deduction in 2009  and 2011, which he was not entitled. Morris was registered to purchase a property on Black Island that the Maine Coast Heritage trust (MCHT) was preparing to purchase and use for business purposes. After contemplating about whether he would make a charitable contribution or not, he ultimately purchased the land for himself through his new LLC for $1 million. On his personal tax return, he convinced his accountant that the purchase should be stated as a charitable contribution to MCHT which was incorrect.

A quote from the US Attorney John H. Kim, “While amassing a personal fortune through, among other things, the $130 million sale of his company, Morris Zuckerman cheated on his taxes for years, illegally scheming to evade almost every one of his tax liabilities. Through his criminal schemes, Zukerman deprived the public of over $45 million in taxes he rightfully owed.” It is evident that Morris Zukerman’s actions were motivated by pure greed with little regard for the consequences of his actions.

Kelly is an MBA student with a concentration in accounting at the Feliciano School of Business, Montclair State University.

Reference:

https://www.justice.gov/usao-sdny/pr/manhattan-energy-investor-sentenced-70-months-prison-evading-over-45-million-income-and

Posted by Abdullah Almohammadi.

51-year-old Steven Croman is a landlord with more than 141 apartment buildings in Manhattan. In 2016, was arrested for the allegations of obtaining loans fraudulently and committing tax fraud. Croman pleaded guilty for giving false business records, grand larceny, and criminal tax fraud. He was sentenced to one year jail and a five million fine.

The case came from the investigation of the allegations that Mr. Croman was harassing his tenants. He was alleged that he pushed rent-regulated out of their apartments. He also withheld the state payroll taxes to earn a bonus for forcing the rent-regulated tenants.

He was taken to court on Tuesday but declined to address the court. Justice Jill made a judgment stating that he was given time in jail to think about the people he has harmed. As he left the court in handcuffs heading to prison, an elderly tenant, Carol, stated that his apartment was in bad condition since Mr. Croman had refused to clean the apartment. Another elderly tenant by the name Cynthia suggested that the public ought to be protected from such a person as Croman forever. This indicated that Mr. Croman should have life jail term. On the other hand, Mr. Croman lawyer believes that Mr. Croman will behave appropriately in jail which will make him be released after eight months instead of one year.

Abdullah is a graduate accounting student at the Feliciano School of Business, Montclair State University.

Source:

http://www.foxbusiness.com/features/2017/10/03/nyc-landlord-sentenced-to-year-in-fraud-case.html