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Posted by on Jun 11, 2010 in PROTECTING YOUR MONEY | 0 comments

Embezzlement: $4.5M was the biggest loss in 2009

On the Money From the  June 11, 2010 print edition In January, Marquet International Ltd. of Boston – a corporate investigations, due diligence and litigation consulting firm – released its annual Report on Embezzlement. The report, which talks about actions taken against U.S. companies – estimated to be in the nine-figure range – revealed that the average loss was more than $1 million and the median loss was $386,500. More than 60 percent of the incidents involved women. However, male perpetrators embezzled nearly twice as much as females. Nearly 25 percent of all losses occurred in financial institutions, and two-thirds of the incidents were committed by employees who held finance and accounting positions. Embezzlement schemes usually last about four years. Marquet examined 415 major embezzlement cases during 2009. That means there was a major embezzlement case in the news daily. The largest embezzlement case of 2009 happened at Koss Corp., a premier designer of stereophonic headphones, based in Milwaukee. The perpetrator allegedly used interstate wire communications to defraud Koss of...

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Posted by on Oct 3, 2008 in PROTECTING YOUR MONEY | 0 comments

Convertible debt buyers may be looking to take over company

On the Money From the October 3, 2008 print edition When raising cash for a new company, there are basically two things that a firm can do: Borrow money from a lender in exchange for a promise to pay later. Or, accept money in exchange for stock. Debt holders receive a promise to repay in cash. Equity holders become part-owners of the firm. When these two methods are combined, the arrangement becomes a “convertible debt.” A convertible debt (or convertible debenture) is a type of loan that can be converted into shares of stock rather than be repaid in cash, usually at some predetermined discount rate. The investor in the new company then has the best of both worlds – a promise of specific cash repayment, or if the new company does well, the ability to become a stockholder and share in the success. This type of security is especially favored for publicly traded companies, because there’s already a trading market for the stock. However, there is a dark side...

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Posted by on Jun 6, 2008 in PROTECTING YOUR MONEY | 0 comments

Financial frenzy feeds fraud; don’t become a victim

On the Money From the June 6, 2008 print edition Economic conditions remain challenging. Fuel prices are climbing to unprecedented heights, the number of home foreclosures is setting records, and the financial markets have more volatility than ever. As consumers and business owners work to survive the assault on predictability, it’s appealing to take on additional debt, with the idea that current conditions are temporary. Unfortunately, purveyors of illegal money schemes know this as well. A colloquial phrase says, “I’ll whip them into a frenzy.” Obviously, in a frenzy, people are less likely to make considered decisions. That opens the door to fraud schemes, especially those that involve “borrowing” money on a promise of relief or gain. It’s not long before the victims have more debt than they can handle. Therein is the vulnerability. According to the bureaus of economics and consumer protection of the Federal Trade Commission, an estimated 13.5 percent of U.S. adults — 30.2 million consumers — were victims of one or more frauds in 2005, and...

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Posted by on Jan 4, 2008 in PROTECTING YOUR MONEY | 0 comments

No redemption under new law actually is good news

On the Money From the January 4, 2008 print edition Colorado has new foreclosure laws, as of Jan. 1. Colorado House Bill 1157 went into effect then, enacting dramatic changes in an attempt to improve and simplify the foreclosure process, while also providing property owners with more realistic prospects of retaining ownership. The essence of the changes revolves around two words: “cure” and “redemption.” The cure period is the time between the commencement of foreclosure and the initial sale date. This time span has been increased from 45-60 days to 110-125, (215-230 for agricultural land). Owners now have about four months to work with their lender and cure the default, stop the foreclosure and retain their property. However, the concept of “redemption” — which is the ability to redeem after the sale for up to 75 days — is extinguished. The good news is that it’s far easier to cure than to redeem. In other words, it’s far easier to conquer the disease than to attempt resurrection after demise. “Cure”...

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Posted by on Nov 2, 2007 in PROTECTING YOUR MONEY | 0 comments

How to avoid the mortgage foreclosure rescue racket

On the Money From the November 2, 2007 print edition In the second quarter of 2007, about 10,017 fresh foreclosure filings were made in Colorado, an increase of 6 percent over the first quarter. In 2006, there were 28,435 foreclosure listings — and officials at the Colorado Department of Housing estimate that number will reach 36,000 by the end of 2007. As the credit markets continue to flounder, many homeowners facing foreclosure seek ways to avoid losing their homes. One foreclosure rescue company proclaims, “The rescue process is a simple one. Unlike conventional lending institutions that check multiple things such as credit, tax returns, assets, and income, our loans are based upon the value of the real estate or collateral securing the loan.” Statements like that set the stage for one of the most heavily promoted methods of avoiding foreclosure — the “sale and leaseback” of the property. Businesses have used this method to raise cash by selling assets. But in this distressed personal mortgage market, as the method is used...

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Posted by on Sep 7, 2007 in PROTECTING YOUR MONEY | 0 comments

A writ of assistance is a powerful tool for collecting money

On the Money From the September 7, 2007 print edition Cornelius Vanderbilt, when speaking to a competitor who owed him money, said, “You have undertaken to cheat me. I won’t sue you, for the law is too slow. I will ruin you.” Many would agree with the 19th-century shipping and railroad tycoon. The legal process takes time — and in the case of civil actions to collect money, two kinds of time. First, there is the time between initiating a lawsuit and obtaining a judgment. A judgment is simply the court saying that yes, the debtor owes you the money — hence the terms “judgment creditor” and “judgment debtor.” It’s not uncommon for several years to elapse before a creditor obtains this court-ordained document that theoretically forces the debtor to pay up. However, courts aren’t collection agencies. It’s the responsibility of the judgment creditor to collect on the judgment. A second clock starts ticking the moment judgment is entered — the post-judgment collection period. That’s the parade of post-judgment attempts by...

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