Report on Financial Statement Fraud Scheme
Instructor NameReport on Financial Statement Fraud Scheme
TO: Organization’s Management
FROM: Learning Team
SUBJECT: Fraud Examination Findings
A Summary of the Matter under Investigation
Crazy Eddie Electronics Stores a chattered company, traded under the symbol CRXY on the New York Stock Exchange. The company was under management of Eddie Antar family from 1971 until 1987 when Oppenheimer-Palmieri Fund (OPF) took over the company as a result of proxy bid (Sanburn, 2012). After a very short time; however, Oppenheimer-Palmieri Fund management decided to suspend the entire board of directors under the governance of the Eddie Antar family to allow room for investigation of a possible fraudulent paradigm in the company (Silverstone, 2005). OPF employed the Apollo Fraud Investigation (API) to investigate on the CRXY electronic stores internal control procedures functionality to prevent the occurrences of frauds and errors in the company’s statements. They were also aided by safeguarding the company’s investors in view of the Eddie Antar and family poor management controls (Albrecht, 2011). Soon after their preliminary investigations, Apollo Fraud Investigation consulted with Elias Zinn and Victor Palmieri of OPF, thus reaching a concession on the preceding of the CRZY management that eventually revealed fraud schemes. Among others the Oppenheimer-Palmieri Fund were informed that the Eddie’s Electronics had a substantial decrease in stock value. This, according to the investigating team was provoked by the Eddy Antar family manipulation of the financial statements to meet the stock exchange requirement, and to deceive the public on the company’s financial condition (Albrecht, 2011). In addition, supplier’s credit terms with CRXY were not adhered to, and this made creditors to freeze the company credit viability. This environment served as the detective measure to facilitate well...
References: Akron, C. (2004). Occupational Fraud and Abuse. Retrieved from
Albrecht, C. C. (2011). Principles of fraud examination. In J. Wells, Expert Fraud Investigation. Newyork: John Willwy & Son Hoboken publishers.
Antar, S. (2011). The Crazy Eddie fraud confessions of a white-collar criminal. White Collar Fraud. Retrieved from http://business.pages.tcnj.edu/files/2013/02/2011-09-07-The-Crazy-Eddie-Fraud-by-Sam-E.-Antar.pdf
Mulford, C. W., & Comiskey, E. E. (2002). The financial numbers game: Detecting creative accounting practices. New York, NY: John Wiley & Sons.
Sanburn, J. (2012). People Are Stealing Tide Detergent and Using It to Buy Drugs. Retrieved March 6, 2013, from http://business.time.com/2012/03/14/people-are-stealing-tide-detergent-and-using-it-to-buy-drugs/
Silverstone, H. R. (2005). Fraud 101: Techniques and Strategies for Detection. NY: John Willey & Sons, Inc.
Wells, J. (2011). Principles of fraud examination (3rd ed.). Hoboken, NJ: Wiley.
Please join StudyMode to read the full document