Cooking the Books with Fuel Fraud

SPECIAL TO THE WEB

Robert Tie
Contributing Writer, Fraud Magazine

The nation's energy industry might soon seek more CFEs. False-statement frauds have plagued a complex federal program that mandates production of renewable fuel to reduce consumption of gasoline and diesel fuel and reliance on foreign oil.

Federal district courts in Maryland and Texas, in unrelated trials, recently convicted two men of stealing $60 million from the U.S. Environmental Protection Agency’s (EPA) Renewable Fuel Standard (RFS) program and numerous energy companies participating in it.

Under RFS, the EPA mandates the production of ethanol, biodiesel and other renewable fuels in volumes that by law increase annually — from 9 billion gallons in 2008 to 36 billion gallons in 2022.

Civilian tips on the suspects’ unusual behavior alerted investigators to both schemes, which until then had evaded existing EPA controls. The crooks were particular about how they got around. One, looking ahead, bought a Patton tank and a Gulfstream jet. The other, living in the moment, accumulated a fleet of ostentatious cars.

The fraudsters reported producing vast amounts of renewable fuel but actually made none. Through those misrepresentations they illicitly earned renewable fuel production credits that they sold on an EPA-hosted online trading system to buyers who, in good faith, assumed the credits were valid.

A proposed EPA Quality Assurance Program (QAP) designed to detect and deter such frauds could create employment or engagement opportunities for CFEs who are familiar with the energy industry and can demonstrate how their special skills could be useful in QAP.

JUST DESERTS FOR ALL?

The fraudsters have given up their toys, paid heavy fines and restitution and begun serving 12 to 15 years behind bars. They weren't the only ones punished, though.

RFS participants’ confidence went into a tailspin when EPA took enforcement actions against the victimized companies for not satisfying the renewable fuel quotas they were trying to meet when they were swindled.

The fines amounted to de facto penalties for not performing better due diligence before completing transactions with the fraudsters, who also participated in the RFS program.

“Since its inception in 2007, this has been a ‘buyer beware’ market,” says David Bennett, CFE, CPA, founder of RIN Attest and Advisory Services, LLC, a Stamford, Conn., firm that provides compliance and advisory services to more than 100 companies in the renewable fuel sector.

Read the full article at Fraud-Magazine.com.

Finding Your Professional Happily Ever After

GUEST BLOGGER

Leslie Simpson, CFE
ACFE Director of Events

When I graduated from the University of North Texas I believed I would search for and find the job of my dreams. I thought I would go to work every day, be the model employee, and my perfect career path would be laid out for me. It would just happen, right? Fast-forward to present times. I have learned that it doesn’t just happen and in order to stay fulfilled in my career there is a lot of effort, personal and professional improvements to constantly make, and strategy involved in finding that happily ever after.

Professional development means different things to different people at different stages of their lives, and luckily the ACFE’s Career Connection at this year’s 24^th Annual ACFE Global Fraud Conference will address many of those scenarios. Whether you’re seeking a job, embarking on a career change or simply looking to advance and improve, the Career Connection has something for you:

Featured Employers

The hardest part of finding a new job is getting your foot in the door and gaining the face-to-face time that allows you to show the remarkable personality a cover letter and résumé can’t convey. Conference attendees will have the chance to connect in person with staff and recruiters from the anti-fraud industry’s top companies and government organizations. They will be on-hand to talk about their organization’s work culture, share any job opportunities available and even informally interview on the spot.

Career Coaching

One of the most valuable benefits of the Career Connection is the coaching. Find answers to your professional questions or obtain useful advice during a private counseling session with a leading career strategist. These experts specialize in addressing your questions and concerns no matter what professional scenario you face.

Résumé Review

Making a lasting impression in less than seven seconds is a challenge, but it has to be done in order to grab a hiring manager’s attention for a possible interview. Attendees are encouraged to bring their résumé and sign up for one-on-one résumé reviews where coaches will cover proper formatting and highlight the accomplishments that will help convince hiring managers that you are the problem solver they have been looking for.

Mock Job Interviews

For the first time, attendees will be able to participate in mock job interviews. Our career strategists are prepared to ask the tough, open-ended questions typical in professional interviews. They will provide instant feedback that will help you to develop better interview strategies, improve your communication skills and manage the stress of the interview. 

Special Presentations

The Presentation Stage, located in the Exhibit Hall, will offer brief career development presentations that are full of tips and suggestions on how to get ahead and stay ahead in your career, all presented by a veteran hiring manager.

Jim Albright, my college copywriting professor gave me great advice when he said, “Do what you love, and the money will come,” but he should have followed that statement with a head’s up that the path to excellence is always a work in progress. The professional development to be obtained at this year’s Career Connection is priceless. I hope you will take advantage of it.

A Bit of Advice: Speak Up

GUEST BLOGGER

Christopher Ekimoff, CFE, CPA
Manager, Investigative Accounting & Financial Litigation, Duff & Phelps
Washington, D.C.

As a boisterous child, I never found it hard to speak up. Whether shouting out a response without raising my hand or sharing my thoughts during lunch with a friend a few tables away, speaking up got me noticed early on (and not always positively). That characteristic has transitioned into my career as well. I’m always the first to comment on the quality of the food I’ve ordered or the potential inefficiencies in a particular process.

The idea of “speaking up” has grown in the media and around the business world in recent years. In light of the 2008 financial crisis, more and more investors, Congressional committees and regulators have asked, “Why didn’t more people speak up?”

In the May/June issue of Fraud Magazine, Preet Bharara, U.S. Attorney for the Southern District of New York, and keynote speaker at the upcoming ACFE Global Fraud Conference in Las Vegas, Nev., outlines his focus on creating an environment that supports whistleblowing:

“First, there has to be a culture in which people who see something bad going on feel comfortable coming forward, and second, people who are taking in the complaints have to be smart enough and care enough to do something about it.”

In career terms, speaking up can be daunting. From reporting questionable behavior to inquiring about a specific task, fear of judgment by a superior can silence even the most confident individual. Often, however, the worry is twice as bad as the result. Speaking up to your superior about any number of issues can also work in your favor:

• Speaking up shares ideas – For any continually successful team, office or firm, sharing ideas and diverse viewpoints is necessary. By soliciting and valuing the opinions of all members, solutions come more easily and are more readily implemented.
• Speaking up differentiates you – A team member willing to share his or her ideas demonstrates confidence, a mastery of a certain set of tools and the ability to work collaboratively in a team setting.

Sure, we can’t all be famous whistleblowers. And being a whistleblower is hard. Harry Markopolos shared his take on Bernie Madoff with numerous government regulators, industry publications and media sources without being heard. Michael Woodford was fired as CEO of Olympus and shunned by his colleagues after reporting his concerns of improper write-offs to the Board of Directors. But, in time, their honesty and integrity erased any stigma that originated with speaking up.

Don’t be afraid to speak up. If you don’t, who will?