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Fraudulent Activity in an Organization

(1) Identify an organization that has suffered from fraudulent activity. It can be one that has been in the news or an entity that you know has committed a fraud and find everything you can about that entity from various Internet sites and other resources. Assume you have been hired by a company to investigate this person's background. Write your findings up in a report.

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Please see response attached, which is also presented below. I hope this helps and take care.

RESPONSE:

(1) Identify an organization that has suffered from fraudulent activity. It can be one that has been in the news or an entity that you know has committed a fraud and find everything you can about that entity from various Internet sites and other resources. Assume you have been hired by a company to investigate this person's background. Write your findings up in a report.

Let's look at the Sunbeam scandal. I located information on the scandal, as well as the CEO implicated in the fraudulent activity (All Dunlop) who still maintains his innocence. Interestingly, Sunbeam's auditor was Arthur Andersen LLP, which also audited the books at Enron and WorldCom. Was he the real culprit?

Example 1: THE AX FAILS ON SUNBEAM'S CHAINSAW AL. (CEO for Sunbeam from 1996 to 1998, Al Dunlop, nicknamed "Chainsaw" Al, landed in court)

Why?

. Dunlap's goals were perhaps unrealistic for Sunbeam Yes, and illegal--see highlighted in yellow below (in attached response)
. Dunlap's slice-and-dice plan was based on a short-term strategy and a long-term strategy as well; however, the ethics of the plan came in front of the courts (e.g., "get-rich-at any expense" era).

Mainly, because both set of goals were based on information that was based on accounting irregularities as stated in the case against the company below. In other words, it was based on a picture of the company that did not exist.

. Dunlap's turnaround strategy backfired

Why? He used unethical means to an end, which always have a way of catching up to people. The court case against Dunlop is presented below:

The following articles and examples expands on these ideas:

Article 1: SETTLEMENT ARCHIVED:

Sunbeam Ex-CEO 'Chainsaw Al' Dunlap Settles SEC Case
By: Neil Roland and Judy Mathewson -- with reporting by Robert Schmidt in Washington

Bloomberg News. September 4, 2002
_________________________________________________________________________

EXCERPT: Former Sunbeam Corp. Chairman and Chief Executive Officer Albert Dunlap agreed to pay $500,000 to settle Securities and Exchange Commission charges that he defrauded investors by inflating sales at the largest U.S. maker of small appliances. Dunlap, 65, nicknamed "Chainsaw Al" after firing thousands of workers to try to revive different companies, sought to inflate Sunbeam's earnings to make it more attractive to prospective buyers and increase his own potential gains, the SEC alleged. "Dunlap was the guiding presence at Sunbeam when it did a panoply of things wrong," SEC assistant enforcement director Richard Sauer said in an ...

Solution Summary

This solution discusses and describes an organization that has suffered from fraudulent activity and provides numerous links for further research. Two highly informative articles are also provided.

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