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Jeremy Wilson spent 25 years fabricating new aliases, leaving behind a thicket of confusing and falsified records. Along the way, he had more than 27 aliases in five states. Now he is at Rikers Island, awaiting trial.

Questions:
1. How did Mr. Wilson use these various identities to commit fraud?
2. What does the article mean when it talks about his approach to fraud as old-fashioned?
3. What was Wilson’s first con job?
4. What red flags of fraud were mentioned regarding Mr. Wilson?
5. What do you think was his most outrageous fraud?
6. How did the frauds benefit him, if at all? Discuss in terms of the fraud triangle.

Source:
McKinley, Jr, J. and R. Rojas. (2016). The Lives and Lies of a Professional Impostor. The New York Times, Feb. 4 (Retrievable online at http://www.nytimes.com/2016/02/07/nyregion/jeremy-wilson-a-compulsive-con-man.html) 07CONMAN-COMBO-master675-v2

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Martin Shkreli, the former chief executive of Turing Pharmaceuticals, repeatedly exercised his Fifth Amendment right to avoid self-incrimination, infuriating members of the House Committee on Oversight and Government Reform. Mr. Shkreli is facing federal securities fraud charges.

Questions:
1. What is the scandal that Mr. Shkreli’s company is apart of?
2. What is the connection of Valeant Pharmaceuticals International with this hearing?
3. If Turing had acquired the rights to Daraprim, a 62-year-old drug for a parasitic infection, and raised the price fiftyfold, to $750 a pill, what was its orignal price?
4. The article said that little of substance was discussed on what to do about the increases. Discuss whether the FDA should be apart of this process or what other types of solutions you would suggest.
5. Are the drug increased prices at the heart of the federal security fraud charges for Mr. Shkereli, or is there another matter?

Source:
Pollack, A. and E. Huetteman. (2016). Martin Shkreli Invokes the Fifth Amendment During Grilling by Congress. The New York Times, Feb. 4 (Retrievable online at http://www.nytimes.com/2016/02/05/business/drug-prices-valeant-martin-shkreli-congress.html)

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According to the article, a small but growing number of dedicated food pantries have sprung up to help people feed their pets. This is in response to pleas from people who see their pets as family and will spend their last dollar on pets, despite going hungry themselves.

Questions:
1. What is the ASPCA?
2. How much has the ASPCA awarded in grants to feed pets since 2010? If you were the accountant for the organization, what journal entries would you make regarding these grants?
3. Do you agree or disagree with Joel Berg? Why or why not?
4. Prepare a budget for Mr. Lopez (mentioned in the article). Assume that his rent is $500 and the cost of feeding, clothing, and care of his family is $1,000 per month, his utilities are $400 per month, and his take-home pay is $6.40 per hour after taxes. After paying $60 for pet food per month, what is his disposable income? What percentage is the $60 of all his expenses?

Source:
Hu, W. (2016). Pet Food Pantries Offer Relief to Animal Owners Struggling With Bills. The New York Times, Feb. 7 (Retrievable online at http://www.nytimes.com/2016/02/08/nyregion/pet-food-pantries-offer-relief-to-animal-owners-struggling-with-bills.html)

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A criminal investigation by Chinese officials has found that the online company, Ezubao, once a dynamo of the financial industry, offered mostly fake investment products to its nearly one million investors. This has highlighted the urgent need for tougher supervision of online financing system in the world’s second largest economy.

Questions:
1. What interest rate was Ezubao offering on most of its “fake” investments? Discuss this in terms of red flags of fraud.
2. The platform for Ezubao was set up by the Yucheng Group in July 2014. What do we now know about Yucheng’s chairman, Ding Ning, and his brother, Ding Dian?
3. What did the company do to hide evidence of the fraud?
4. Explain the importance of peer-to-peer lending in the Chinese economy.

Source:
Gough, N. (2016). Online Lender Ezubao Took $7.6 Billion in Ponzi Scheme, China Says. The New York Times, Feb. 1 (Retrievable at http://www.nytimes.com/2016/02/02/business/dealbook/ezubao-china-fraud.html)

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According to Ms. Pattanaik, GOLD is not the safe haven that it once was. In fact, she concludes that gold may only come back as a safe haven if the markets face even grimmer news than that of recent times.

Questions:
1. According to the author, what are the reasons why investor panic is not translating into a bigger bounce in gold?
2. By how much has gold dropped in price since November 2015? What happened to gold’s rebound on January 20?
3. According to the author, explain why gold is not a good hedge against inflation in the western world.

Source:
Pattanaik, S. (2016). Gold’s prospects are dull. Reuters.com, Jan. 25 (Retrievable online at http://blogs.reuters.com/breakingviews/2016/01/25/golds-prospects-are-dull/)gold-investment-25076051

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The federal government gave Johnson Controls a bailout in 2008 to avoid certain bankruptcy, along with its customers, the large automakers – General Motors and Chrysler. This week, Johnson Controls renounced its United States corporate citizenship by selling itself to Tyco International, based in Ireland. This deal was struck, in large part, to reduce an annual tax bill by $150 million.

Questions:
1. What other large companies does the article mention as part of exodus of companies seeking lower tax havens?
2. Explain the term “corporate inversion.”
3. Between 1992 and 2009, what amount of tax breaks has Johnson Controls received from Michigan?
4. What does the author point to as the solution for keeping American companies in America?

Source:
Sorkin, A. (2016) A Tidal Wave of Corporate Migrants Seeking (Tax) Shelter. The New York Times, Jan. 25 (Retrievable online at http://www.nytimes.com/2016/01/26/business/dealbook/a-tidal-wave-of-corporate-migrants-seeking-tax-shelter.html)

tax shelter

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Google has agreed to pay 130 million pounds (or about $185 million) in a tax settlement to U.K. authorities, where the British Labour Party criticizes the government’s handling of the case and the normal use of corporate tax strategy workarounds.

Questions:

1. How far back in time does the settlement go to cover back taxes?
2. What are the two shelter strategies that Google has used to avoid billion of dollars in taxes around the world?
3. What is the name of Google’s parent company?
4. Make the journal entry that Google would record for this settlement, assuming that it will be paid sometime in the near future.

Source:
Womack, B. (2016). Google Agrees to Pay $185 million in U.K. Tax Settlement. Accounting Today, Jan. 25 (Retrievable online at http://www.accountingtoday.com/news/tax-practice/google-agrees-to-pay-185-million-in-uk-tax-settlement-77030-1.html)

chess

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In an unprecedented move, the Treasury Department will begin identifying and tracking cash sales of real estate in an effort to expose money laundering and secret buyers of high-end properties.

Questions:
1.At which locations will the new initiative begin?
2. Is the use of shell companies legal in real estate?
3. How will the real estate deals be tracked (e.g. via paper trail or e-documents)?
4. Do you see any way around these proposed procedures?
5. Why is the real estate industry worried about this move by the federal government?

Source:
Story, L (2016). U.S. Will Track Secret Buyers of Luxury Real Estate. The New York Times, Jan. 13 (Retrievable online at http://www.nytimes.com/2016/01/14/us/us-will-track-secret-buyers-of-luxury-real-estate.html)

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Norovirus, salmonella, and E. Coli outbreaks during 2015 at fresh food restaurants run by Chipotle have cost a huge loss of business. However, in mid-February, the chain plans a strategic marketing campaign aimed at trying to bring these customers back.

Questions:
1. By how much did comparable restaurant sales fall in the fourth quarter of 2015 for the Chipotle stores?
2. How do you think the criminal investigation into Chipotle will affect the marketing efforts?
3. How much will the new food safety protocols and marketing cost Chipotle and what is the outlook for the company’s campaign in the long-run?

Wong, V. (2016) Chipotle Has A Plan To Woo Customers Back Into Restaurants. Will It Succeed? Buzzfeed, Jan. 14 (Retrievable online at http://www.buzzfeed.com/venessawong/chipotle-has-a-plan-to-woo-customers-back#.sxRovPlzv)

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As Powerball mania and the promise of $1.6 Billion swept the airways, Andy Kiersz came up with his own idea on how to win. Unfortunately, it would require 189,000 people filling out all the possible Powerball combinations on those annoying scantrons, working 10 hours a day at a rate of 50 tickets per hour.

Questions:
1. Read the comments to the story. Which is your favorite and why?
2. Assume that Kiersz was one of the three actual winners after buying all the ticket combinations and selected the cash option. Present a profit and loss statement using this information and discuss whether this was a good idea.
3. What type of relationship is shown in the graph of The Likelihood of Avoiding a Split Pot vs. Number of Tickets Sold? What effect does this have on Andy’s plan?
4. Did you buy a Powerball ticket? Why or why not?

Source:
Kiersz, A. (2016). What If You Bought All 292 Million of the Possible Powerball Combinations? The Atlantic, January 13 (Retrievable online at http://www.theatlantic.com/business/archive/2016/01/powerball-ticket-all-combinations/423930/#article-comments)