CFO crimes, litigation, financial control failures, ethics violations, and more (2024)

Published April 12, 2024

Welcome to the CFO version of the naughty list. This page, in chronological order, is coverage of CFOs involved in litigation, as well as examples of financial control failures, lack of adherence to the law, poor financial transparency, unprofessional communication and conduct, and/or poor ethics.

• Detroit Riverfront Conservancy’s former CFO William Smith and the missing $40 million

  By CFO Editorial Staff • June 20, 2024

  Smith, following an FBI investigation, has been charged with wire and bank fraud going back over a decade.Read the full article ➔

• PCAOB Hits KPMG Netherlands, Deloitte Affiliates With Exam Cheating Penalties

  By Andy Burt • April 11, 2024

  The civil penalties levied by the PCAOB reflect “egregious” widespread cheating on internal examinations required to maintain a CPA license.Read the full article ➔

• Royal Bank of Canada Fires CFO Over Undisclosed Personal Relationship

  By Andy Burt • April 8, 2024

  The internal investigation that ousted Nadine Ahnmay resultin forfeiture of significant compensation due to misconduct.Read the full article ➔

• Former Indiana Schools CFO Charged With Corruption, Theft

  By Andy Burt • April 5, 2024

  Scott Bumgardner faces 21 felony charges for corrupt business influence and theft, as the school system looks to recover the missing funds while shoring up its financial controls.Read the full article ➔

• Old National Puts CFO Brendon Falconer on Leave Following Child Molestation Charges

  By Dan Ennis • April 3, 2024

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  The Evansville, Indiana-based bank named its chief strategy officer as interim CFO on Monday after Brendon Falconer was arrested last week.Read the full article ➔

• South Carolina’s $1.8B ‘Mystery Fund’ Likely a Result of Communication Breakdown

  By Adam Zaki • April 2, 2024

  After coming across $1.8 billion of unaccounted-for cash, South Carolina’s state comptrolleris questioning the treasurer’s practices, while the treasurer is blaming poor communication on behalf of the comptroller.Read the full article ➔

• Former Long Island School CFO Found Guilty, Faces Sentencing

  By Adam Zaki • March 26, 2024

  The former CFO of The Schechter School, David Ostrove, has beenfound guilty of misappropriating over $8 million dollars from the private Jewish school.Read the full article ➔

• San Francisco 49ers, MLB Star Shohei Ohtani Wrestle With Poor Financial Controls

  By Adam Zaki • March 23, 2024

  A failure to maintain and implement proper accounting controls impacted some of the world’s most successful athletes and professional sports organizations this week.Read the full article ➔

• Former Long Island School CFO on Trial For Stealing $8.4M

  By Adam Zaki • March 1, 2024

  The ex-CFO used the funds to afford a “lavish lifestyle,” according to the Suffolk County ADA Jessica Lightstone.Read the full article ➔

• EY Hit With $3MEthics Penalty;PCAOB Finds Flaws in 46% of EY Audits

  By David McCann • Nov. 15, 2023

  The Big Four firm says deficiency rate rose to 46% in annual inspections.Read the full article ➔

• Tyson CFO Arrested, Reviving Critics’ Concerns Over Inexperience, Conflict of Interest

  By Andy Burt • Nov. 8, 2022

  John R. Tyson, the recently appointed CFO of Tyson Foods, was arrested in Arkansas on Nov. 6, after becoming intoxicated and waking in a home belonging to a woman he did not know.Per a preliminary arrest report, as reported by KNWA, Tyson was discovered at approximately 2:05 a.m. on Sunday. The ...Read the full article ➔

• PwC Fined Over Audit Failure

  By Lauren Muskett • June 13, 2019

  The U.K. Financial Reporting Council (FRC) fined PwC $5.8 million over failures related to its audits of the 2015 and 2016 financial statements of IT services company Redcentric.The FRC also fined two PwC partners, Jaskamal Sarai and Arif Ahmad, $178,000 each over their failings related to the Re...Read the full article ➔

• McKinsey Accused of Running ‘Criminal Enterprise’

  By Matthew Heller • May 10, 2018

  The founder of corporate restructuring firm AlixPartners has accused rival McKinsey & Co. of making at least $101 million in bankruptcy consulting fees by concealing potentially disqualifying conflicts of interest from the courts.In a complaint filed on Wednesday, Jay Alix said McKinsey had c...Read the full article ➔

• Ex-Soupman CFO Gets Jail for $600K Tax Fraud

  By Matthew Heller • April 13, 2018

  The former CFO of Soupman has been sentenced to nine months in prison for cheating the federal government out of nearly $600,000 taxes on compensation paid to employees of the gourmet soup company that licenses the recipes of the real-life “Soup Nazi.”Robert Bertrand, 63, admitted at his sentenci...Read the full article ➔

• Ex-Bankrate CFO Charged With Criminal Fraud

  By Matthew Heller • Dec. 22, 2017

  The former CFO of Bankrate has been charged with criminal fraud for allegedly manipulating the financial services firm’s books to artificially inflate its stock price and enrich himself and others.The indictment unsealed Wednesday is the latest chapter in the legal troubles of Edward DiMaria aris...Read the full article ➔

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• Arrest of Huawei CFO Fans US-China Tensions

  By Matthew Heller • Dec. 6, 2018

  The CFO of Chinese telecom giant Huawei has been arrested in Canada at the request of the United States, fanning fears of a further escalation in tensions between the Trump administration and Beijing.The arrest of Meng Wanzhou, the daughter of Huawei founder Ren Zhengfei, in Vancouver has drawn p...Read the full article ➔

• Ex-American Realty CFO Gets 18 Months in Jail

  By Matthew Heller • Nov. 9, 2017

  Former American Realty Capital Properties CFO Brian Block has been sentenced to 18 months in prison for his role in an accounting fraud that overstated a key metric used to evaluate the REIT’s financial performance.U.S. District Court Judge J. Paul Oetken said Block “participated in a scheme to i...Read the full article ➔

• Banker Arrested For Illegally Profiting From Reverse Mergers

  By Katie Kuehner-Hebert • Sept. 11, 2015

  Benjamin Wey, the head of an investment firm called New York Global Group, was arrested Thursday for allegedly earning tens of millions from manipulating stock prices on Chinese “reverse mergers.”According to Reuters, the office of U.S. Attorney Preet Bharara in Manhattan charged Wey, 43, and his...Read the full article ➔

• SEC Charges Former CFO with Hiding Internal Control Failures

  By Iris Dorbian • July 31, 2014

  The Securities & Exchange Commission has brought charges against Marc Sherman, the CEO of QSGI, a Florida-based computer equipment firm, and Edward L. Cummings, former CFO, for misleading outside auditors and shareholders about internal control deficiencies.The SEC is alleging that both knowi...Read the full article ➔

• It’s Years More Jail for the “Tyco Two”

  By Stephen Taub • Oct. 16, 2008

  It looks like former Tyco International Ltd. chief executive Dennis Kozlowski and former chief financial officer Mark Swartz will be in the slammer for many years more, after all.The New York State Court of Appeals upheld their criminal convictions today, according to Reuters. In a written decisi...Read the full article ➔

• A Hedge Too Far: Bear Ex-Managers Arrested

  By Stephen Taub • June 19, 2008

  Former Bear Stearns hedge-fund managers Matthew Tannin and Ralph Cioffi were arrested, and are expected to be indicted on securities fraud charges after a year-long federal investigation that looked into the collapse of their subprime-mortgage-investment-heavy fund.Separately, after their arrest ...Read the full article ➔

• Remorseful CFO Gets Jail for Embezzlement

  By Stephen Taub • April 1, 2008

  The former CFO of a small provider of products for the photonics industry was sentenced to 46 months in federal prison for embezzling more than $800,000.William Miraglia was ordered to pay $796,621 in restitution to his former employer, Northvale, N.J.-based Photonic Products Group Inc. and an in...Read the full article ➔

• Embezzling CFO Gets Eight Years in Jail

  By Stephen Taub • July 18, 2007

  The former CFO and another former executive at an engineering consulting firm were sentenced Wednesday in connection with their role in a $36-million embezzlement.W. Scott DeLoach, the former finance exec of PBS&J, an employee-owned national engineering and construction, was sentenced to 97 m...Read the full article ➔

• Former NBC Treasurer Arrested

  By Helen Shaw • Jan. 25, 2007

  U.S. federal authorities have arrested the former treasurer of NBC Universal, Victor Jung, 34, on charges that he stole over $800,000 from the media conglomerate and used the money for personal gain.Jung, who was indicted on two counts of wire fraud Thursday, could be sentenced to a maximum of 20...Read the full article ➔

• On the Run, Ex-CEO of Comverse Arrested

  By Stephen Taub • Sept. 27, 2006

  The fugitive former chief executive officer of Comverse Technology Inc. was indicted on a number of counts stemming from the stock options backdating scandal, was arrested Wednesday in Namibia, according to government officials.Jacob “Kobi” Alexander, was arrested under a provisional warrant issu...Read the full article ➔

• Martha Stewart Arrested

  By Marie Leone • June 4, 2003

  Martha Stewart, the famed domestic doyenne and chairperson of Martha Stewart Living Omnimedia Inc. (MSO), was indicted by a federal grand jury today on nine counts. She was charged with committing securities violations, conspiring to commit them, and obstructed justice, among other violations, ac...Read the full article ➔

• Adelphia CFO Arrested

  By Stephen Taub • July 25, 2002

  Adelphia Communications Corp. founder John Rigas, his two sons, and two other finance executives were arrested and charged with bank fraud, securities fraud, and conspiracy yesterday. Apparently, the Rigas family and friends used the company as a “personal piggy bank,” according to Bloomberg’s ac...Read the full article ➔