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International Fraud Scheme

Posted By George (Clint) Frederick CPA PLLC, George Frederick CPA PLLC, Thursday, November 12, 2015

 Note:  Had the fraud been successful my accounts would have been compromised.  Even though this 'appears' to be a valid offer from a legitimate billion dollar company that is publicly traded.

INTERNATIONAL FRAUD SCHEME

10/17/2015
Good Morning,

Central Glass Co., Ltd would like to employ your services on temporary basis on commission. Please write back for more details.

Juan Cui

Supervisor & Coordinator

Central Glass Co., Ltd

 

I responded with interest in the position thinking it might be fraud; they had my personal email from some source so a response seemed OK.

10/20/2015 - Another email is received with the following after some pleasant introductions:

JOB DESCRIPTION:

With the high demand of our products in your North America, we are currently working on establishing representative offices and sales centers in that region. Until the centers are established, we need a reliable company / individual (irrespective of the business type) that will stand as an intermediary between our customers in your country/region and Central Glass Co., Ltd.

In recent times we have had some good, bad and ugly experiences with our customers in North America, and we have been working out possible strategies to overcome these challenges. Some of these challenges includes (Detail listing followed).
COMPENSATION:

We shall be paying you the sum of $5,000 USD as monthly salary for your services, and you will be entitled to 5% commission of every payment received on behalf of Central Glass Co. Ltd. from our clients/customers. (Note this would be considered a part time position)

Kindest regards,

Takeo Komata; Executive Manager; Central Glass Co., Ltd.

Email: takeokomota@cgc-jp.net

http://www.cgc-jp.com/ 

 

NOTE:  The difference in spelling – Takeo Komata whereas email shows Takeo Komota.

Central Glass Company is listed on the Tokyo exchange.  It has a value of over $1 billion.  A list of the executives show Takeo Kamata is an executive of the company.  I attempted to call Japan to talk personally with Mr. Komata; but not speaking Japanese I couldn’t make it past the switchboard.

I sent a response of continued interest in the position.  I’m curious where this will lead.

On 10/22/2015 I received another email:
To speed up and commence with this process, we shall now proceed to signing of the Memorandum of Understanding. To do this, we require some information from you to prepare the Memorandum of Understanding. Information needed are as follow: (Note:  Requested information consisted of information that is public knowledge and nothing that I felt would jeopardize my accounts.) The email continued:

Upon receipt of the above, we shall send you a copy of the Memorandum of Understanding for signing. As soon as the signing of the MOU is done by both parties, we shall then forward your information to our customers and as well furnish you with their information.

 

On 10/26/2015 I sent an email directly to Takeo Komata as shown on the Central Glass Web Site requesting confirmation of the legitimacy of the offer.  I received no response.

On 10/29/2015 I received another email:
Attached hereto is a signed Memorandum of Understanding by our company. You are required to review, sign and return to us as soon as possible. Upon receipt of the M.O.U., we shall provide you with more information on our customers and supporting document (s). (Note:  The MOU was signed by the Chief Executive Officer of Central Glass Company along with his Executive Vice President.

I replied to the email containing the MOU, indicating that I would need to form a separate company, obtain a separate bank account, and pointing out the fact the company internal controls over accounts was very weak.  I did not sign the MOU.

On 10/30/2015 I contacted the local office of the Federal Bureau of Investigation (FBI).  I also sent by USPS (snail mail) letters to the officers that purportedly signed the MOU.

On 11/3/2015 I received a reply from the FBI: Please report this to our Internet Crime website at www.IC3.gov.  Thank you.

On 11/05/2005 the following email was received:
Thank you for your mail.

My apology for responding late. There was a fire outbreak in one of our ware houses. Properties worth millions of dollars was lost. This is a very big blow for our company at the moment.

The content of your email was clearly understood. We do not have an account in US for now but we are planning to set up one once we begin our liaison office in January. We are in agreement with your suggestion on the MOU. Please proceed to modify and return to us so that we can draft out another MOU and sign.

I did not respond to the last email.  On 11/11/2015 I received the following:


Thank you for your letter of 2nd of November. 
With regard to the offer and the MOU, we did not send you such offer and documents and the corporate email address written on the MOU and the person `Juan Cui' have no relation to our company. Also we recognized the signatures on the MOU as forged ones. It has come to our attention that there are a lot of spam emails being sent at the moment that indicate the sender as Central Glass Co., Ltd. or our officers and employees. 
Please discard these emails and documents you received. 
We apologize for any confusion these documents may have caused. 

Tags:  business  finance  fraud  tips 

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Yes The IRS Can Give You Advice

Posted By George (Clint) Frederick CPA PLLC, George Frederick CPA PLLC, Thursday, November 12, 2015
IRS ADVISES TAXPAYERS TO CHOOSE A TAX RETURN PREPARER WISELY IR 2015-124
Noting that there is still some time before the next tax filing season, IRS has advised taxpayers to make use of that time to consider the appropriate options in choosing a tax return preparers. Basic advice. IRS provides some basic tips that taxpayers can keep in mind when selecting a tax professional and filing their returns:
• Select an ethical preparer; taxpayers entrust some of their most vital personal data with the person preparing their tax return.
• Check on the service fees up front; avoid preparers who base their fee on a percentage of the refund or those who say they can get larger refunds than others.
• Ask the preparer whether he has a current Preparer Tax Identification Number (PTIN); paid tax return preparers must have a current PTIN to prepare a tax return.
• Research the preparer's history; check with the Better Business Bureau, or, for the status of an enrolled agent's license, check with the IRS Office of Enrollment. For certified public accountants, verify with the state board of accountancy, and, for attorneys, check with the state bar association.
• Ask for IRS e-file; any paid preparer who prepares and files more than 10 returns for clients generally must file the returns electronically.
• Provide records and receipts; do not use a preparer who, against IRS e-file rules, is willing to e-file a return using the latest pay stub instead of Form W-2.
• Review your tax return and ask questions before signing; taxpayers are legally responsible for what's on their return, regardless of whether someone else prepared it.
• Never sign a blank tax return; the preparer could put anything they want on the return, even their own bank account number for the tax refund.
• Ensure the preparer signs and includes their PTIN; the preparer must also give the taxpayer a copy of the return. To help taxpayers determine return preparer credentials and qualifications, IRS offered the following information:
• Any tax professional with an IRS PTIN is authorized to prepare federal tax returns. • Enrolled Agents—licensed by IRS—are subject to a suitability check and must pass a three-part Special Enrollment Examination, which is a comprehensive exam that requires them to demonstrate proficiency in federal tax planning, individual and business tax return preparation and representation. They must complete 72 hours of continuing education every three years.
• Certified Public Accountants—licensed by state boards of accountancy, the District of Columbia and U.S. territories—have passed the Uniform CPA Examination and completed a study in accounting at a college or university and also met experience and good character requirements established by their respective boards of accountancy. In addition, CPAs must comply with ethical requirements and complete specified levels of continuing education in order to maintain an active CPA license. CPAs may offer a range of services; some CPAs specialize in tax preparation and planning.
• Attorneys—licensed by state courts, the District of Columbia or their designees, such as a state bar—generally have earned a degree in law and passed a bar exam and have on-going continuing education and professional character standards. They may also offer a range of services; some attorneys specialize in tax preparation and planning.
Representation rights. Taxpayers can designate their paid tax return preparer or another third party to speak to IRS concerning the preparation of their return, payment/refund issues and mathematical errors. The third party authorization checkbox on Form 1040, Form 1040A and Form 1040EZ gives the designated party the authority to receive and inspect returns and return information for one year from the original due date of the return (without regard to extensions). Enrolled agents, certified public accountants and attorneys have unlimited representation rights before IRS. Tax professionals with these credentials may represent their clients on any matters including audits, payment/collection issues, and appeals. Preparers without one of these credentials (also known as unenrolled preparers) have limited practice rights. They may only represent clients whose returns they prepared and signed, but only before revenue agents, customer service representatives, and similar IRS employees, including the Taxpayer Advocate Service. They cannot represent clients whose returns they did not prepare and they cannot represent clients regarding appeals or collection issues even if they did prepare and sign the return in question. For tax return preparers that have an active PTIN (PTIN holders) but no professional credentials and do not participate in IRS's Annual Filing Season Program (AFSP, a voluntary program requiring a certain number of continuing education hours), this is the final year that they will have those limited representation rights for returns they prepare and sign.
For returns prepared beginning Jan. 1, 2016, only AFSP participants will have those limited representation rights.
References: For who is a tax return preparer, see FTC 2d/FIN ¶ S-1117; United States Tax Reporter ¶ 77,014.24; TaxDesk ¶ 867,002; TG ¶ 71753. For standards of practice, see FTC 2d/FIN ¶ T-10900; TaxDesk ¶ 867,008; TG ¶ 71758. [ top ] ecently posted the following:
Posted Yesterday

Tags:  finance  fraud  tax 

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"Field Guide" to Financing Your Small Business

Posted By Joel Gottesman, Liquid Capital Of Arizona, Thursday, September 10, 2015
Finance

About the Author.  Joel Gottesman, is the owner and President of Liquid Capital of Arizona, specializing in alternative finance, including ABL, factoring, export, inventory and PO finance.  Joel has also been a successful attorney, banker and small business owner. 

 

Introduction.  Field guides help people learn about and identify different varieties of plant and animal wildlife.  This financial field guide can help you sort through the many financing alternatives available for small business.     

Available Financing Options.  The main financing tools in alphabetical order are: 

Asset Based Lending (ABL).  A line of credit from a bank or finance company in the form of a revolving line of credit tied to the amount of eligible assets, including accounts receivable, inventory and equipment.  The typical size of an ABL line is from $1 million to over $10 million.  ABL loans are generally for well-established businesses that do not qualify for a traditional or SBA bank loan.  Generally, the cost of an ABL line is higher than the cost of a bank loan, but less than Factoring.           


Bank Loans – SBA and Traditional

Banks provide a variety of loan options to small business.  Often the loans are made under the government guaranty programs of the U.S. Small Business Administration (SBA).  The SBA has a number of programs for financing real estate and equipment purchases as well as general working capital needs.   The loans are secured by the assets of the business or the assets financed by the loan.  The maximum amount for SBA loans is $5.5 million.  The SBA Express Loan Program offers loans on a streamlined basis for up to $350,000.   If a business can meet the underwriting standards, an SBA guaranteed loan is usually the most cost effective solution.

Cash Advances.

Cash advance loans are based on borrowing against future revenues based on the sales history of the business.  This is a fast-evolving financing tool for small business.  The typical loan advance is unsecured and ranges from $25,000 to $1 million.  The advance is usually repaid in daily withdrawals from your business bank account over a six to twelve month period.  Because the loan is unsecured, it is usually at the upper end of the cost structure for business finance. 

Community Non-Profit Lenders.  Non-profit community lenders offer loan programs for small business and start-ups.  Community lenders can provide loans ranging from $1,000 to $1 million on favorable terms and take into account community development efforts.

 

Equipment Finance 

Equipment leases and loans can be used to finance needed equipment.  The size ranges from $5,000 to over $5 million.  If a company has spent cash in the past to acquire equipment, it may be possible to “unlock” the cash by financing the owned equipment.    The cost varies with the credit of the business.  

Equity & Arizona Crowdfunding Law

Historically, equity investment for small business comes from the owner, family and friends, private “angel investors” and venture capital firms.  The latest development in Arizona is the new crowdfunding law that became effective on July 3, 2015.  The Arizona law is the first in the nation to “go operational” using a crowdfunding approach popularized by such firms as Kickstarter (non-equity raises).   Under the Arizona law, a company can raise up to $2.5 million if it has audited financial statements, or up to $1 million dollars if it does not.  Equity may be sold only to Arizona residents.  For investors who are “accredited” (meet certain minimum financial tests), there is no cap on the investment amount.  For investors who do not meet these tests, there is a cap on the investment of $10,000 per company.   The new law provides a streamlined process, but there are requirements of the Arizona Corporation Commission that must be followed.  

There are also new developments on the federal level.  On June 19, 2015, the SEC implemented Regulation A+, which permits well-established businesses to raise increased amounts of equity under streamlined disclosure rules.    

Equity investment is usually the most costly form of financing and you have a “partner” in the business until the equity is bought back or the business is sold.

Export Finance

Export sales can be a great channel to grow your business.  The key to export finance for small business is finding a lender that will fund sales to foreign customers. There are a number of alternatives, including bank loans, ABL loans or Factoring.  There are government guarantee programs offered through the SBA and the U.S. Export Import Bank (as of this writing the charter of the ExIm Bank has lapsed and may not be renewed by Congress).

Factoring

Factoring is the cash sale of your accounts receivable at a discount so you do not have to wait for your customers to pay before you can redeploy the cash.  A factoring line can range from $25,000 to over $10 million.  Finance companies usually make their credit decision based on your customer’s credit rather than your credit.  Factoring can help an early stage company as long as there are sales being generated.  Only receivables from businesses or government qualify; sales to consumers do not.   The cost of Factoring is higher than a bank loan or an ABL loan, but can put into place quickly.

Inventory Finance

nventory finance can cover the cost of inventory in the form of raw materials, parts or finished goods.  This type of financing is usually only available to well-established businesses.  It is similar to PO Finance, but does not require that the product be pre-sold.   The financing can be in the range of $25,000 to over $500,000 or more.   The cost is similar to Factoring and PO Finance.

Purchase Order Finance (PO).  A specialized form of financing the cost of producing a product that is pre-sold to credit-worthy customers. PO Finance is used to pay for goods manufactured by a third-party and assures the manufacturer of payment once the product is made.  PO Finance can be useful to smaller companies that obtain a large volume of purchase orders.  The typical size of a PO Finance transaction can range from $50,000 to over $10 million.

Business Community Resources

There are many resources available in the business community to help small business owners and entrepreneurs.  A good starting point for more information is the In Business Magazine 2014/2015 Lending Guide.  The Lending Guide lists a number of Arizona lenders, lending resources and community organizations providing counseling and mentoring.  See the Guide at

http://issuu.com/mediapublishersgroup/docs/inbusiness_1014_lending_guide?e=1180713/9536086

Another excellent resource is the Arizona Small Business Association (ASBA) which also offers an effective mentoring program.  A listing of ASBA resources can also be found online at:

 http://www.asba.com/?business_resources

Wishing you much success in your business!

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Tags:  Access to Capital  entre  finance  financing  small biz  small business 

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LifeLock in IP Battle with Former Employee

Posted By Mary Juetten, Traklight, Monday, August 17, 2015

If you've seen HBO's Silicon Valleyyou know the perils that can arise from issues of ownership and work created while otherwise employed. While a creator can easily separate in their mind the work done for each separate entity and see no contradiction or overlap, the law is less forgiving of such indistinction. Hooli's case against Richard and Pied Piper works so well because we've all seen cases in the news where a entrepreneur has created a product or company in their spare time, only to have the ownership of said creations disputed by their current employer. At the very least, we're familiar with David Fincher and Aaron Sorkin's telling of Facebook's sordid origins in The Social Network, embellished as it likely may be. So we shouldn't be surprised to see new cases pop up all the time, even here in the Valley of the Sun.

Tempe-based LifeLock, Inc. has filed a lawsuit against the founder of Lemon, a company it acquired in December 2013, over the ownership of one of his other projects. LifeLock is alleging that Wences Cacares, the founder and former CEO of Lemon, used Lemon computers and resources to develop the source code for one of Cacares' other ventures, Xapo.  (For those unfamiliar with the company, Xapo offers offline, encrypted storage for bitcoins, in facilities with physical security measures that would give Danny Ocean pause.) 

At the time that LifeLock acquired Lemon, LifeLock also launched its LifeLock Wallet app that used Lemon technology to help customers protect their identity online by securely storing digital copies of credit and debit cards for use. What the lawsuit alleges is that Cacares and his team continued work on a bitcoin wallet component to the app that wasn't going to be a part of the LifeLock Wallet, even after being ordered to stop by Lemon's board. LifeLock is claiming that such work continued even after they purchased Lemon, and as such they are entitled to ownership of the company.

Cacares has responded by filing suit against LifeLock, claiming that LifeLock interfered with and mismanaged his team, leaving him unable to continue work on the LifeLock Wallet. Cacares was able to get a letter from LifeLock acknowledging that he owned the bitcoin vault as well as the involvement of two Lemon employees in advisory roles. But LifeLock claims that the role of these employees was misrepresented; rather than advisers, they were involved with Cacares in day-to-day operations as he and others continued development on Xapo with Lemon resources. Cacares further claims that after tendering his resignation, he was instead terminated by LifeLock for cause, resulting in the loss of $1 million in LifeLock shares.

Clearly this is a messy affair, sure to be strung along in the courts for months. And it's impossible to speculate from the outside on what went on within Lemon and LifeLock, especially when we have dueling lawsuits that give us twice the narrative we usually see from a court filing. But the larger paint remains: take care when working on your own business while still employed elsewhere (even if it's your own company). When you sell your business to a large company like LifeLock, then proceed to step out with your new venture, there is a chance that you'll draw suspicion, especially if it's related to a project from your old company. It's not a stretch to say that this Lemon could have used advice from a sage advisor.

Tags:  business  intellectual property  Legal 

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Good Time for Entrepreneurs in Search for Capital

Posted By Gabriel Salcido, Arizona Small Business Association, Thursday, July 23, 2015
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