Month: January 2011

The two founders of the property finance company Australian Capital Reserve will face a committal hearing on criminal charges related to the $332 million collapse of the company.

Samuel Pogson, 49, from Wahroonga, and Murray Lapham, 48, from Turramurra, have been on bail since they were charged in March with one count each of making a false statement to obtain a financial advantage for ACR.

Mr Pogson was later charged with a second offence of making or omitting a matter from a document to make it misleading.

Both men, who are due to appear in the Downing Centre Local Court for the day-long hearing, are accused of misleading investors in their sixth prospectus lodged on April 7, 2004.

The prospectus claimed that ”as at December 31, 2003 the [parent company] Castle Investment Company Limited and controlled entities’ profit before income tax was $7,409,483”, court records state.

Both men are accused of knowing this statement was false or misleading because the pre-tax profit ”took into account sales revenues that were not transactions that had properly occurred prior to 31 December 2003”.

The charges against the two former real estate agents were brought by the Australian Securities and Investments Commission. Two ASIC investigators served the men with court notices in March.

ACR, a subsidiary of the Estate Property Group, raised so-called ”mezzanine” or second-ranking development finance from small investors using deposit notes paying interest of as much as 10 per cent a year.

(Source: Vanda Carson, SMH, December 1, 2010)

About Rushmore Forensic

Andrew Firth is a Director of Rushmore Forensic. He has worked on a number of investigations tracing property financing transactions and other alleged frauds involving mortgage brokers.  He has also acted as an expert witness in property and money tracing related cases.

He is a forensic accountant based in Sydney. Andrew can be contacted directly for a confidential and complimentary discussion.

A directory entry or unauthorised advertising fraud targets small businesses, trying to bill you for a listing or advertisement in a magazine, journal or business directory.

The fraud might come as a proposal for a subscription disguised as an invoice for an entry in a bogus international fax or trade directory. Sometimes they are created to look like those used by genuine directory publishers.

Alternatively, you might be led to believe that you are responding to an offer for a free entry—but in fact, the order is for entries requiring later payment. Another common approach used by fraudsters is to ring a firm asking to confirm details of an advertisement that they claim has already been booked. The fraudster might quote a genuine entry or advertisement your business has had in a different publication or directory to convince you that you really did use the fraudster’s product.

If you refuse to pay, they might also try to intimidate you by threatening legal action or even physical harm.

Warning signs

You receive a call from a business directory or other publication you’ve never heard of, ‘confirming’ your entry or advertisement.

You receive a document in the mail that appears to be an invoice from a publication you’ve never heard of.

The caller claims that the government requires you to be registered in their register.

The caller reads out your listing or advertisement and you recognise it as a listing you put in a different publication.

Protect yourself from directory and advertising (false billing) frauds

• Make sure the business billing you is the one you normally deal with.
• Always check that goods or services were both ordered and delivered before paying an invoice.
• Never give out or clarify any information about your business unless you know what the information will be used for.
• Try to avoid having a large number of people authorised to make orders or pay invoices.
• Never agree to any business proposal on the phone: always ask for an offer in writing.
• If you are unsure about any part of a business offer, ask for more information or seek independent advice.

As well as following these specific tips, find out how to protect yourself from all sorts of other frauds.

Do your homework

If you think that the publication is a legitimate one and you may have authorised an entry, ask for proof of its existence. You should also make sure you keep written records of authorisations for advertising or directory entries so that if you receive an invoice or a telephone call, you can go back to your records to check it. Always get proof of the entry before paying anything. You do not have to pay for any directory entry that you did not specifically authorise in writing.

Another way to look into the legitimacy of the directory is to ask for details of other local businesses that have previously advertised and check with them that they received what they paid for.

Be sure to check with your local fair trading agency—they can tell you if they have taken legal action against the person who has contacted you.

The ACCC has recently instituted proceedings in the Federal Court against a Spanish-based directory listing company, European City Guide S L, trading as Industry and Commerce. It is alleged that Industry and Commerce engaged in misleading or deceptive conduct and made false or misleading representations. This matter is listed to return to court on 9 February 2010. For more information about this case, refer to the ACCC’s media release.

The ACCC warns business owners to be wary of unsolicited letters/emails that may appear to be trade mark, patent and/or renewal invoices. If you own a registered patent and/or trade mark, you may find yourself the target of letters/emails regarding overseas registration of your application. If you are unfamiliar with the organisation, especially letters/emails requesting payment for unsolicited services, you should treat the request with extreme caution.

Never pay for an advertisement or entry you didn’t authorise. If you receive a telephone call or an ‘invoice’ that comes from a publication you have never heard of, or that you don’t remember putting an entry in, don’t pay or give out your details until you have looked into the matter further.

(Source: ACCC)

About Rushmore Forensic

Rushmore Forensic has assisted exporters in Australia with extricating themselves from aggressive threats made by overseas fraudsters.  If you have a matter which requires expert advice, please don’t hesitate to contact Andrew Firth for a complimentary and confidential discussion.

Andrew Firth is a Forensic Accountant in Sydney and Director of Rushmore Forensic. He has over 10 year experience in financial investigations and other aspects of forensic accounting.  Andrew is a former investigator with the Serious Fraud Office in the UK.  He has also worked for KPMG and Deloitte during his career. Andrew is based in Sydney and provides forensic accounting services throughout Australia.

Background checks on individuals or company’s? – 10 key steps to conducting corporate intelligence checks yourself

In business we are constantly forming new relationships and are introduced to new people and organisations. Before you agree to work with an individual or company it’s beneficial to run a few basic background checks.

Step 1 – The Name

For companies, this is a simple process of checking online with the corporate regulator.  In Australia this is the Australian Securities & Investments Commission.  New Zealand companies can be checked with the New Zealand Companies Office and the same can be done at the UK Companies Office.

Type in the exact name from the correspondence you have.  These searches also reveal other useful information, like the year of incorporation, the registered office and if the registration is still valid.

For individuals, I recommend typing the persons name into Google with quote marks around the first and surname. For example if you were searching for the name Andrew Firth.  I would search for “Andrew Firth” in quote marks. It’s also useful to try and locate a person by also adding in the name of the persons business, industry, or assumed residence e.g. “andrew firth sydney” or “andrew firth accountant”.  Other places that can be used to verify a person is the LinkedIn website or Facebook.

Step 2 – Tax, GST or VAT Number Search

A tax number search is a basic yet effective method of tracking individuals, companies and other unincorporated entities.  Online searches can be conducted either with the entities tax number of by simply typing in the person or company’s name.

Step 3 – The Trusty Phone Book

The online Whitepages or Yellow Pages can still be a very useful tool to find a persons address and phone number.  This can be cross matched to the results of other searches.  Online phone books work best where the persons surname is not common and you know the State or area where they are located.

Step 4 – Reverse Phone Number Searches

If you have a company or individuals phone number, I recommend typing this into Google with the area code enclosed in quote marks.  For example if the phone number was (02) 9954 6200, then type “02 99546200” in quote markets.  Also try the same search with the space removed e.g. “0299546200”.  Using Google in this way is like using a reverse telephone directory.  You will be surprised what can turn up!  It’s also entirely legal unlike a real reverse telephone directory.

Step 5 – Electoral Role Searches

Most electoral commissions allow you to search their registers or electoral roles for a small fee.  Google “electoral commission” to find the website for your location.

Step6 – Real Property Searches

If you have the address of a person, you can obtain the Transfer Deeds and other documents through the governments Land Titles Office.  In Australia these are State based and the web addresses can be found through Google.  These records provide very valuable information that may be difficult to find elsewhere.

Step 7 – Google Street View

You’ve probably used Google Street View to look at houses for sale, however it is also a great investigative tool and can be used to view a photo of the target’s address or determine if the address is commercial or residential.

Step 8 – Court Records

Court records can provide key insights into a person or company.  Run a Google search for court records and the location you are interested in to find the right resource for you.

Step 9 – Media Searches

A Media Search can be a key source of information in particular cases but for many people they can come up empty. Make a judgement call depending on the profile and background of the person or company involved.

Step 10 – Verify personal details with Professional Associations

Recently I was looking at forming a new venture with an individual and at the last minute I decided to check that the individual was a member of the CPA as had been disclosed on the persons business card and CV. On checking with the CPA, I found that the individual was not a current member of the CPA and hadn’t been for around 20 years. Verifying this one detail made me reassess the venture with the individual (which didn’t proceed). Even though I’m a professional investigator, I nearly made a basic and potentially costly mistake.  Remember never to accept what is presented to you at face value and always make enquiries to satisfy yourself that you know who you are dealing with. If you are interested in some red flags to look out for then read a recent article I wrote on the matter.

And if you are still not satisfied…Hire a Private Investigator

It may seem an extreme suggestion however if you wish to know what the target is actually up to then the use of Private Investigator can be a great investment.  You can request photo’s, audio, or video and the Private Investigator can give you real time surveillance that is unattainable through other means. Rushmore Forensic often uses Private Investigators on investigations and outsources the enquiries to a network of investigators across Sydney and Australia. Please contact us for further information on corporate intelligence, background checks and other forensic accounting matters.

About the Author

Andrew Firth is a Forensic Accountant in Sydney and Director of Rushmore Forensic. He has over 12 years experience in financial investigations, corporate intelligence and aspects of forensic accounting.  Andrew is based in Sydney and provides forensic accounting services throughout Australia.  If you have a matter which requires expert advice, please don’t hesitate to contact Andrew Firth for a complimentary and confidential discussion.