Zzzz best evidence limitation

He appeared to be the ultimate American success story. Minkow had blamed the fraudulent charges on unscrupulous contractors and another employee, and paid back most of the victims.

His original targets were penny stock companies, which are often havens for fraud. Gray had visited Sacramento weeks earlier to search for the site that Minkow had refused to divulge. Freeman determined that Minkow had perpetrated "a fraud on the court" that was so egregious that letting the case go any further would be a disservice to justice.

They were charged with "participating in and aiding and abetting various fraudulent activities," the U. The company claimed that its assets had been drained to the point that it was forced into Chapter 11 bankruptcy. Soon after becoming a friend of Tom Padgett, an insurance claims adjuster, Minkow devised a scheme to exploit that friendship.

On the same day, Minkow resigned as senior pastor of Community Bible Church, saying in a letter to his flock that since he was no longer "above reproach," he felt that he was "no longer qualified to be a pastor. Minkow was also a business partner with Robert Viggiano, a convicted jewel thief and reputed loanshark.

According to Minkow, the revenues from KeyServ would provide enough cash flow to end the Ponzi scheme. He also hired a well-known insurance agent, Tom Padgett, to be the principal officer of Interstate Appraisal Service and used these two companies to generate paper profit. Two banks closed his business account because California law did not allow minors to sign binding contracts, including checks.

The Scheme and the Downfall Minkow and business associate Tom Padgett created a fictitious company, Interstate Appraisal Service, to defraud banks and other lending institutions out of millions of dollars. After his early release inhe became an ordained minister and served as a pastor of a church in California.

Among other things, the federal indictment alleges that around July 1, Mr. Dingell, chairman of the U. Minkow spent Thursday night in jail after surrendering to Los Angeles police when he learned of the sealed indictment.

None of the various defendants could be reached for comment. Before the deal was closed, the jilted homemaker sparked a campaign against ZZZZ Best that would expose more than the fraud committed against her.

Minkow after ZZZZ Best In JanuaryMinkow and 10 other company insiders were indicted by a grand jury on counts of racketeering, money laundering, securities fraud, embezzlement, mail fraud, bank fraud, and tax evasion. Within months of striking out on his own, Minkow faced the ultimate nemesis of the small businessperson: Assuming the paperwork was provided by an independent third party, the CPAs used false appraisal documents to perform its audit.

When he was nine years old, his mother got him a job as a telemarketer with the carpet-cleaning business where she worked.

However, Drexel abruptly pulled out of the deal a few days later, causing the stock price to fall again. At times, he found it difficult even to meet payroll. As one journalist reported, rather than building a corporation, Minkow constructed a hologram of a corporation.One of the issues stemming from ZZZZ Best’s case is the difference between a review and an audit as evidence by civil suit filed by a California bank against the firm.

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The bank claimed that its decision to grant ZZZZ Best’s loan was based on the opinion of Ernst & Whinney review of ZZZZ Best’s financial statements period ending July 31, contracts, and visited selected restoration sites.

Comment on the limitations of the evidence that these procedures provide with regard to the management assertion of occurrence. Typically, third party confirmations provide %(1).

E&W effectively allowed ZZZZ Best to limit the scope of their audit.

ZZZZ Best Founder Minkow Indicted on Racketering And Fraud Charges

the auditors may wish to gather more evidence and strengthen their faith in the validity of contracts by collaborating with independent parties. Barry Minkow founded ZZZZ Best in his parents’ garage in when he was only sixteen years old.

Due to high competition in the industry, low enter barriers, and bad internal control, this young entrepreneur started to have cash flow problems, and a shortage of working capital. ZZZZ Best’s auditors obtained third‑party confirmations to support the contracts, reviewed available documentation, performed analytical procedures to evaluate the reasonableness of the revenues recorded on the contracts, and visited selected restoration sites.

Third parties such as Tom Padgett, as well ZZZZ Best's law firm that collude, limit the ability for auditors to collect sufficient appropriate evidence Question #3 Without observing the existence of the sites making the payments, Greenspan could not prove that the contracts for these payments exist.

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Zzzz best evidence limitation
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