It’s Friday, and the Arizona Republic reported yesterday that a former Scottsdale accountant swindled $67 million from investors in his real estate Ponzi scheme: [Thanks M!]
A former Scottsdale accountant was arrested Wednesday and stands accused of devising a $67 million real-estate Ponzi scheme, authorities said.
Scottsdale police arrested Dan Wise, 52, on theft and fraud charges, police said Thursday.
Detectives along with federal agents served search warrants at Wise’s Scottsdale residence, businesses and a storage facility, police said.
While the investigation remains ongoing, police believe there are victims in multiple states.
Last week, the U.S. Securities and Exchange Commission obtained a temporary restraining order against Wise and froze his assets. Authorities believe the former certified public accountant targeted his clients in a multi-million dollar real estate investment scheme, according to a SEC statement.
When I read this, I was thinking this was peanuts compared to Bernie Madoff’s $65 billion scheme. [Or the trillions the government is spending.] Then I thought, "How sad is it when $67 million starts sounding like peanuts?"
So what else is sad, funny, interesting or odd out there today? This is an open thread, so let us know what’s on your mind.
twist -
Here’s Google News’ top biz story as of a couple of minutes ago. I guess you get your confidence where you can find it
“Citigroup Says It Has Its Best Quarter Since Early 2007″, by Matthew Saltmarsh, New York Times, April 17, 2009.
John-
Here’s more suspect "good news":
How can you change the definition of "quarter"?
twist -
“Would you buy it for a quarter?” Remember it was fiddling at the boundaries of financial reporting periods, the infamous cookie jar accounts, that did in Frank Raines and the gang at Fannie Mae.
“Under the rule, companies are allowed to record any declines in the market value of their debt as an unrealized gain.”
Wait, what?
People owe them money, but the money owed is worth less than before, therefore they profited by the difference?
Ok, right.. so in reality, they went from a 5.11 billion loss to a .9 billion loss (1.6 – 2.5 from a bogus rule). Give those guys more bonuses!
I thought Enron taught us that while “thinking outside the box” was a good trait, it was NOT one you wanted in your accouting team…
Ya know, looking at things now, I’m *so* glad my parents made me actually go to class and do my homework and learn basic math skills.
yeah…freeze foreclosure for a month or so and whaddayaknow…..foreclosure rates were down (for a month)!! change an accounting rule here and there (and a SIGNIFICANT rule at that) and whaddayaknow……balance sheets aren’t as bad as was thought. rather than appointing all of these special czars….why don’t we appoint an economy fairy that can magically change things EVERY month and then the good news will continue to come.
i have a couple ideas of my own. let’s drive a million chevys off of a cliff…..inventory will be down x% which would indicate chevys rebound. then, bulldose a few empty but developed neighborhoods around the valley….poof!!!! inventory is down form last month so obviously the housing market is rebounding!!! i’d also like to rename detroit as atlantis. atlantis has no prior year numbers to compare so we could just take detroit out of the housing stats, unemployment stats, etc…..EVERYTHING will look better.
Okay, when someone such as the taxpayers absorb your toxic assets and then someone such as the federal government launders your bad accounts by exchanging bad debt for new capital provided at near zero interest and when a subsidized Wells Fargo can purchase the good assets of a now defunct bank for pennies on the dollar and then slash dividend payments to the bone and then put a few thousand employees on the street to lean down the operation and then throw in a few accounting changes…making a paper profit really isn’t all that difficult.
Wells Fargo stock remains at about 50% of its former value and they have HUGE exposure to commercial real estate losses and future residential mortgage losses. I sold out at $33 and I’m not looking back.
Igor is on task, the economic education of the average American is “sad.”
LINENOISE:
I think you’re reading this backwards. You say that people owe them money. You are right but what I think you are forgetting is that these financial institutions issue truck loads of bonds where they owe the bondholders money.
What FASB allows from an accounting perspective is reality… The company, if solvent enough, can go out there and buy back a lot of their bonds that have fallen in value due to the financial institution’s deteriorated debt rating.
Bond buy-backs are being employed by many of the gaming companies trying to avoid bankruptcy right now. (I live in Las Vegas and these reports are all over the media. Harrah’s just purchased back some of their debt at greatly reduced prices due to their now crappy credit.)
I don’t know what you guys think but this makes sense to me. If they can go out there and retire a bunch of their debt at prices way less than face value, that’s a gain in my book. They gain by being able to retire the debt at a way lower amount than they otherwise would have.
I wish I could go out and buy back my house’s loan for it’s face value out on the market. We should be allowed to do that just like corporations can with their debt to get ourselves out of this pickle.