The former CFO of a publicly traded financial services and marketing organization based in Florida faces multiple counts of making false statements and entries, as well as conspiring to commit, and committing, securities and wire fraud.
The indictment alleges that the former CFO and his co-conspirators carried out a complex financial fraud scheme to manipulate the organization's financial statements and artificially inflate its earnings between 2011 and 2014. They allegedly engaged in "cookie jar" or "cushion" accounting by leaving over a million dollars in unsupported expense accruals in the ledgers and then systematically reversing it in later quarters to meet earning goals.
They also allegedly misrepresented some expenses as "deal costs," which artificially inflated publicly reported adjusted earnings metrics. The indictment also accuses them of making materially false statements to conceal the false entries from auditors, shareholders, and the public. While the former CFO was allegedly inflating the organization's finances, he made millions of dollars by selling his own shares in the organization.
According to those prosecuting the former CFO, his financial fraud scheme not only harms investors, but could negatively affect financial markets globally. "Former Chief Financial Officer at Publicly Traded Company Charged with Accounting and Securities Fraud Scheme," www.justice.gov (Dec. 20, 2017).