Businesses and individuals in California and around the country rely on professionals such as attorneys, accountants and brokers to manage their affairs, and both professionals and their employers can face severe penalties when documents required by state or federal law are falsified or not submitted in a timely manner. One such case involves an accountant who served as the chief financial officer of a leading management consulting company between 2008 and 2016. Media accounts reveal that the man has been indicted in connection with a scheme that allegedly led to his employer underreporting approximately $12 million in workers’ compensation expenses.
According to prosecutors, the man falsified his employer’s periodic filings with the Securities and Exchange Commission by improperly reporting workers’ compensation costs as fees and payroll taxes. The man is said to have taken advantage of the scheme by selling 35,300 shares that he had purchased using his stock options for $467,261. Court records reveal that the man received more than $2.4 million when he sold the shares.
The man was fired after disclosing his activities to his employers in 2016. The SEC has also filed cases against both the man and his employer. The company agreed to pay a $1.5 million fine to settle the matter with the SEC. The company’s former comptroller has also agreed to pay a fine of $20,000 and will no longer work as an accountant.
This case reveals how serious matters involving professional malpractice can become. Attorneys with experience in this area may help individuals and companies to identify misconduct or malpractice and craft legal strategies to mitigate the impact of such activities. Attorneys might also advocate on behalf of professionals accused of misconduct and clients embroiled in fee disputes with lawyers or other professionals.
Source: Nasdaq, Former CFO Of Barrett Business Services Charged With Accounting Fraud, Staff report, Sept. 20, 2018