EMBEZZLEMENT #2

A couple of weeks ago I sent out a copy of an embezzlement that was reported. Here is a second one. If you don’t think this could happen in your business you are thinking just like the owners of these two businesses.

Watch for our upcoming “Red Flag Training” webinar on how to spot and to stop employee theft.

STORE MANAGER PLEADS GUILTY TO EMBEZZLING

A former Plattsmouth, Nebraska convenience store manager pleaded guilty Monday in Cass County District Court to stealing $264,000 from his employer.

The 56 year-old man faces one to 20 years in prison for stealing the money in small amounts between July 2007 and November 2011 from the former Lucky’s convenience store. In exchange for his plea, prosecutors dropped a felony charge of misrepresenting sales tax collections.

The Cass County Attorney said the man admitted to investigators that he had taken the money. According to an affidavit filed by an U.S. Secret Service agent, the man said he stole the money by falsifying daily reports to make it seem the store did less business than it actually had.

FEDS FILE SUIT AGAINST THREE COMPANIES OVER ALLEGED MORTGAGE SCAM

Watch out for mortgage scammers! Just like with the scammers who promise to help settle IRS tax bills for pennies on the dollar, there are crooks willing to exploit homeowners with mortgage problems. Check out the article:
Feds file suit against 3 companies over alleged mortgage scam

SOCIAL SECURITY NEEDS MORE THAN JUST A 'TWEAK'

Below is an article that digs into the changes that need to be made to salvage the Social Security system. The understatement of the past two centuries. Click on the link to read the article:Social Security Needs More Than Just a 'Tweak,' Mr. President

IS FISCAL CLIFF ALREADY WREAKING HAVOC?

(CNBC) -- CNBC.com reports that CNBC's Larry Kudlow "thinks the looming 'fiscal cliff' has already started to do serious damage to the economy, and worries the damage could get much worse, with Congress ultimately driving Corporate America right to the edge." According to the story, the threat of the fiscal cliff, "or confluence of tax hikes and spending cuts that could go into effect as soon as January 2013," has hurt new orders for durable goods or long-lasting manufactured goods, which has dropped to its lowest level in 3-1/2 years.

To read the entire article click here: http://www.cnbc.com/id/49201294

RED FLAG TRAINING

It seems that we are seeing more employee embezzlement all the time. If you read the articles, the owner usually says “I would have never thought that this long time employee would have stolen from me." There are some signs that you can look for to spot fraud and there are some systems that you can put in place to keep employees honest. In November we will be doing a webinar, “Red Flag Training”, which will discuss these issues.

The following article is an example out of a local newspaper:

A Lincoln woman pleaded no contest to theft by deception for embezzling from a marketing firm she helped found in 2002. The employee stole $154,937 from a marketing firm between July 2006 and March 19, 2009 according to the Deputy County Attorney. She said the woman who took care of the company's finances used bookkeeping software to write herself checks and make it look as if they were going to creditors. The company's president was a co-worker of the woman for nearly ten years. He discovered the loss when he began to take control of the company's finances.

The Lincoln woman is set for sentencing on the felony charge.

SUPER-LOW INTEREST RATES MEAN BARGAINS FOR SHAREHOLDERS BORROWING FROM THEIR CORPORATIONS

It's the worst of times for savers invested in interest-bearing accounts, but the best of times for qualified borrowers, who are enjoying record-low rates thanks to the Fed's policies. Times can be better still for shareholder-owners of closely held corporations fortunate enough to be sitting on a cash hoard. These shareholder-owners may be in the position to borrow money from their companies at super-low rates without running afoul of the IRS required interest rates.

Today's super-low interest rate environment has produced the lowest interest rates allowable by the IRS rules in recent memory. For example, for the month of October, the short-term and mid-term AFRs are .23% and .93% respectively. The long-term rate is 2.34% for monthly and quarterly compounding, 2.35% for semi-annual compounding, and 2.36% for annual compounding.

Thus, for example, a closely held corporation making a three-year loan to a shareholder-owner could charge just .23% interest on the loan and escape the imputed interest rules. For a mid-term loan of three to nine years, made in October, just .93% interest could be charged, and for a fifteen-year loan, the rate assuming monthly compounding could be 2.36%.

SOMETHING TO THINK ABOUT

This is going to be political so do not look at if you will be offended...