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Originally posted by Rey HRH:

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Originally posted by ensigmatic:

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Originally posted by soflaac:
... a national account I worked on, their site managers created their own shell (vendor) accounts, routed work orders to that (shell) vendor which billed the manager in turn, invoice was approved by the same manager, and approved for payment by a higher level manager.

I guess that firm had never before then been audited by a real accounting firm? Because there is this thing called GAAP (Generally Accepted Accounting Principles), and their failure to observe GAAP would have raised numerous red flags immediately.

I know this because, as the Senior IT Guy, I had to certify Certain Things every year, as well as produce an analysis of all financial systems' user permissions to flag potential GAAP conflicts.

Adhering to GAAP won't eliminate such fraud, but it does mean many more people have to be involved to pull it off.

Nope. It's not GAAP; I think you're thinking SOX (Sarbanes Oaxley) compliance. And, no, you don't need many people. Just a few well-placed people who will approve setting up the account then approve invoice payments. In a small operation like this, the controller would have to have been involved given the relatively high amount of dollars.

Not directly related to GAAP nor to SOX.

The above relate to businesses’ external reporting of financial results & condition, and specifically as SEC registrants (ie publicly-traded companies).

Neither GAAP nor SOX is directly intended to prevent theft or embezzlement. SOX does address internal controls, but focuses on those controls related to financial reporting.

“ Section 404 of the Sarbanes-Oxley Act requires public companies' annual reports to include the company's own assessment of internal control over financial reporting, and an auditor's attestation.”

I had contributed to the WALL when it first got going. Later, things changed, and we were offered our money back if we wanted it.......I decided that I wanted my money back, and got back EVERY CENT that I sent in.

We will just have to wait and see how this all shakes out.

RedState article which touches the basics of the allegations. Postal Service was involved due to investigating wire fraud charges. Obviously hot off the press so more will be coming out.

I read 'shipwreckedcrew' a lot, trying to keep up on the Dunham investigation, he's got a lot of good insight being a fed prosecutor for 20+ years.

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As a general matter, this kind of “scheme” can walk the fine line between legal and illegal if the promoters and operators just follow a few established rules. Following those rules keep you off the IRS radar. Chief among those rules is don’t make knowing falsehoods in your promotional materials — don’t say things like the defendant’s said here such as “100% of the funds raised will be used in the execution of our mission and purpose”, or I’m not taking “a penny in salary or compensation,” if those things are not true. Making any kind of false representation for the purpose of obtaining money or something of value from another person is the heart of a “scheme to defraud.”

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Another rule to follow is be accurate in reporting the amount of money paid to executives of the non-profit. The IRS would not have batted an eye here if all four men charged had paid themselves $150,000 each a year from the funds raised as compensation for their work. That would have been a public filing, and exposure of that fact might have dampened contributions some — but they would have still raised a lot of money, and been able to take a decent amount for themsevles — all 100% legal. It might not have been quite the same amount they took by using false invoices to steer money to shell companies they controlled, but they wouldn’t be facing a decent amount of time in federal prison either.

https://www.redstate.com/shipw...federal-prosecution/

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Originally posted by soflaac:

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As a general matter, this kind of “scheme” can walk the fine line between legal and illegal if the promoters and operators just follow a few established rules.

Or just make it a left wing "charity", then you're untouchable.

I think that Bannon is innocent.

He’s a savvy guy, and well knows how intensely the leftist are looking for criminal behavior by anyone that’s ever been associated with President Trump. He’d avoid it for that reason alone.

The other three guys I don’t know about, but they’ll be under intense pressure to testify to Bannon’s guilt.

Timothy Shea, one of the guys charged, is the DEA Acting Administrator. WTF?

I would tend to believe Trey Gowdy. He looks before he speaks.

flashguy

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Originally posted by Pipe Smoker:
I think that Bannon is innocent.

He’s a savvy guy, and well knows how intensely the leftist are looking for criminal behavior by anyone that’s ever been associated with President Trump. He’d avoid it for that reason alone.

The other three guys I don’t know about, but they’ll be under intense pressure to testify to Bannon’s guilt.

SDNY has a 98% conviction rate. Bannon might have bigger problems with being a director of GTV. And of course he is innocent until proven guilty.

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Originally posted by Rey HRH:
Nope. It's not GAAP; I think you're thinking SOX...

Given the report I generated for the accounting firm annually was entitled "GAAP Analysis for System Foo," I'm pretty sure I'm thinking GAAP

The system in question was our Manufacturing (or Materials) Resource Planning (MRP) system. It processed all inventory control, purchase requests, purchase orders, invoicing, accounts receivable and payable, etc.

SOX is something else entirely. I had to deal with that, too. In fact it fell upon me to inform management of new data retention requirements under SOX, as well as certain provisions under the FRCP, the two of which, combined, required changes to our backup, archival, and storage procedures, which, in turn, required new review and certification for our ISO 9000 certifications.

All the servers that had data upon them relating to the company's business were audited for SOX compliance. Only the manufacturing system was audited for GAAP compliance, as well.

We'll see. I can't trust the feds nor bureaucracy anymore after the Russia hoax

Given the last four years I cannot help but doubt our justice system and question this arrest. I want to see justice applied equally and honestly not because of ones politics.

It took a while for the truth to come out about Flynn didn’t it?

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Originally posted by ensigmatic:

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Originally posted by Rey HRH:
Nope. It's not GAAP; I think you're thinking SOX...

Given the report I generated for the accounting firm annually was entitled "GAAP Analysis for System Foo," I'm pretty sure I'm thinking GAAP

GAAP is just making sure financial transactions are recorded or bucketed into the generally acceptable Accounting principles account.

SOX was legislation specifically created that imposed additional requirements on companies to implement policies and procedures to ensure fraud is prevented.

Maybe a cpa like CraigCPA can chime in to clarify.

Not sure why you guys want to wander off into the irrelevant weeds of GAAP and SOX. Please refer to my above post.

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Originally posted by FHHM213:
Not sure why you guys want to wander off into the irrelevant weeds of GAAP and SOX. Please refer to my above post.

Because Bannon and the other guy are indicted for funneling money to themselves rather than the wall. This would fit the definition of fraud. Guess what was created in response to corporate fraud? SOX

“ The Sarbanes-Oxley Act of 2002, often simply called SOX or Sarbox, is U.S. law meant to protect investors from fraudulent accounting activities by corporations.”

The video in Para’s link has Trey Gowdy characterizing the allegation as a “fraud scheme.” When GAAP was mentioned, I know it’s not that but SOX. My work is in Supply Chain which includes qualifying vendors, ensuring purchase orders generated are valid requirements, confirming invoices received match the purchase order and the goods or services are actually received. SOX requires controls that ensure Collusion is minimized in creating purchase order requirements, selecting vendors, and paying off invoices. Additionally, they have increasing approval and review requirements based on dollar amounts. I’ve had to work with IT and Accounting because they often interpret SOX incorrectly and give insufficient or incorrect transaction access to people.

SOX

I haven’t looked into all the minutia, but a guy like Bannon has to know the lefties are looking for ANYTHING on him. One would ‘expect’ he would act accordingly.

SOX was enacted due to several high-profile breakdowns of financial-reporting-related internal controls of publicly-traded companies. It is applicable to that domain.

This thread relates to poor internal controls of a fundraising / GoFundMe effort. The need for good internal controls predates SOX. All entities and their stakeholders should strive for good controls whether the entity is subject to SOX or not.

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Originally posted by sourdough44:
I haven’t looked into all the minutia, but a guy like Bannon has to know the lefties are looking for ANYTHING on him. One would ‘expect’ he would act accordingly.

One of the articles I saw related to the non-profit said that Bannon & a couple others were tipped off by a financial institution, that the feds were looking at their finances in 2019.

A bit lawyer-geek-talk but interesting: