2007 Disciplinary Actions 


    December

    Editor’s Note: No disciplinary actions were published in the December issue of The CPA Letter.

    November

    —As a result of investigations of alleged violations of the Codes of Professional Conduct of the AICPA and/or state CPA societies, the following ethics cases have been resolved by settlement agreement under the Joint Ethics Enforcement Program.

    Member

    Paul T. Fink of Eagan, MN

    Information came to the attention of the Ethics Charging Authority (comprised of the AICPA Professional Ethics Executive Committee and the Minnesota Society of CPAs (MSCPA) Professional Ethics Committee), alleging a potential disciplinary matter with respect to Paul T. Fink’s conduct in the performance of professional services as controller and chief financial officer of a publicly held company (the “entity”).

    After an investigation, Mr. Fink was charged with violations of the AICPA and the MSCPA’s Codes of Professional Conduct as follows:

    Rule 102 - Integrity and objectivity

    Interpretation 102-1 -Knowing misrepresentations in the preparation of financial statements or records.  c. Signs, or permits or directs another to sign, a document containing materially false and misleading information.

    1. Mr. Fink knew and participated in backdating shipping documents when it was necessary to collect on expiring letters of credit whose terms had not been met. 
    2. With respect to the entity’s sale to a major customer recognized in the quarter ended March 31, 1996, Mr. Fink admitted he signed an invoice that included as support an internally prepared bill of lading dated March 29, 1996, which did not agree to the inland bill of lading signed by the carrier on April 5, 1996. 
    3. Mr. Fink admitted in his deposition given to the SEC that he did not sign the management representation letter for the third quarter of 1996 because he was concerned about a particular sale. He did, however sign the third quarter Form 10-QSB improperly affirming that the financial statements were prepared in conformity with generally accepted accounting principles.
    4. Mr. Fink knew prior to signing the Forms 10-QSB for the second and third quarter of 1996 that the entity would not be able to meet the terms of a contract for the sale of coating equipment being constructed for a customer and that the letter of credit securing payment would expire. However, the entity continued to recognize gross profit on the contract under the percentage of completion method.

    Interpretation 102-4 - Subordination of judgment by a member

    Mr. Fink failed to promptly investigate numerous suspicious transactions despite obvious “red flags” and his concerns over their treatment. Instead, he accepted his supervisor’s assurances as to the validity of the transactions. In addition, Mr. Fink failed to timely present his concerns to the entity’s audit committee and board of directors.

    Rule 203 – Accounting Principles

    Mr. Fink signed the entity’s Forms 10-QSB for the quarters ended June 30 and September 30, 1996; Form 10-KSB for the year ended December 31, 1996 and the SB-2 filed with the SEC on May 29, 1996 (that included the March 31, 1996 financial statements) improperly affirming that the financial statements were prepared in conformity with generally accepted accounting principles when they included improperly recognized revenues and sales credits on several transactions, improper recognition of gross profit on a contract accounted for by the percentage of completion method and improper treatment of a prior period adjustment.

    Agreement

    In consideration of the ECA forgoing further investigation of Mr. Fink’s conduct as described above and in consideration of the ECA forgoing any further proceedings in the matter, Mr. Fink agrees as follows:

    1. To waive his rights to a hearing under AICPA bylaws section 7.4 and Article XIV of the MSCPA.
    2. To neither admit nor deny the above specified charges.
    3. To comply immediately with professional standards applicable to the professional services he performs.
    4. To his expulsion from the AICPA and the MSCPA.
    5. That the ECA shall publish his name, the charges, and the terms of this settlement agreement.

    —As a result of decisions by hearing panels of the Joint Trial Board, the following members have had their AICPA memberships:

    --Terminated:

    Jean R. Banks Sherman Oaks, CA, effective August 16, 2007

    Ms. Banks was found guilty of violating AICPA Bylaw 7.4.6 for failing to cooperate with the Ethics Charging Authority in its disciplinary investigation of her alleged misconduct.

    William C. Boettger of El Cajon, CA, effective August 16, 2007

    Mr. Boettger was found guilty of violating AICPA Bylaw 7.4.6 for failing to cooperate with the Ethics Charging Authority in an investigation of his professional conduct.

    Kirk J. Dischino of Fairfield, NJ, effective August 9, 2007

    Mr. Dischino was found guilty of violating AICPA Bylaw 7.4.6 for failing to cooperate with the Ethics Charging Authority in an investigation of his professional conduct.

    --Terminated because of a final judgment of conviction for a crime punishable by imprisonment for more than one year:

    Norman W. Barrett of Dover, DE, effective July 6, 2007

    Mr. Barrett pled guilty to violating Title 26, USC section 7201, Tax Evasion.

    John A. Snoble of Columbus, OH, effective July 20, 2007

    Mr. Snoble pled guilty to violating Title 18, USC Section 1956(h), Money Laundering Conspiracy.

    October

    Editor’s Note: No disciplinary actions were published in the October issue of The CPA Letter.

    September

    __As a result of investigations of alleged violations of the Codes of Professional Conduct of the AICPA and/or state CPA societies, the following ethics cases have been resolved by settlement agreement under the Joint Ethics Enforcement Program:

    Member

    Thomas D. Costello of Evanston, IL

    Information came to the attention of the Ethics Charging Authority (“ECA”) (comprised of the AICPA Professional Ethics Executive Committee) alleging a potential disciplinary matter with respect to Thomas D. Costello’s conduct as controller of a SEC registrant.

    Mr. Costello advised that he would be willing to sign a settlement agreement charging him with violating AICPA Bylaw Section 7.4.6, without admitting or denying such charge.

    Charge

    AICPA Bylaw Section 7.4.6

    The AICPA now charges Thomas D. Costello with violating AICPA Bylaw Section 7.4.6 for failing to cooperate with the AICPA in its investigation of his conduct as controller of a SEC registrant.

    Agreement

    In consideration of the AICPA foregoing any further proceedings in this matter, Thomas D. Costello agrees as follows:
    1. To waive his rights to a hearing under AICPA Bylaw Section 7.4.
    2. To neither admit nor deny the above-specified charge.
    3. To expulsion from membership in the AICPA, effective July 26, 2007.
    4. That the ECA shall publish his name, the charges and the terms of this settlement agreement.

    __As a result of decisions by hearing panels of the Joint Trial Board, the following members have had their AICPA memberships:

    --Terminated:

    Robert E. Carlson of Lakeland, FL, effective June 29, 2007

    Mr. Carlson was found guilty of violating AICPA Code of Professional Conduct, Rule 201, General Standards, for failing to exercise due professional care in the performance of professional services and Rule 501, Acts Discreditable, for failing to comply with a Florida State Board Order, by not obtaining the required Board consent to administer an estate trust account, for being found in contempt of court for failing to repay $28,197 to an estate trust account by the court ordered date, and for failing to file the final accounting for the same estate by a court ordered date.

    James N. Gailey of Huntersville, NC, effective June 29, 2007

    Mr. Gailey was found guilty of violating AICPA Bylaw 7.4.6 for failing to cooperate with the Professional Ethics Division in an investigation of his professional conduct.

    Robert F. Lewis of Bella Vista, AZ, formerly of Hart, MI, effective June 29, 2007

    Mr. Lewis was found guilty of violating AICPA Bylaw 7.4.6 for failing to cooperate with the Professional Ethics Division in an investigation of his professional conduct.

    __Under the automatic disciplinary provisions of the Institute’s bylaws, the following members have had their AICPA memberships:

    --Terminated because of a final judgment of conviction for a crime punishable by imprisonment for more than one year:

    Scott H. Beggs of Osburn, ID, effective June 12, 2007

    Mr. Beggs was found guilty of violating Idaho Code Section 18-2403(2)(b), 18-2407(1)(b)(1), Grand Theft by Embezzlement.

    Tara LaGrand of Naples, FL, effective June 12, 2007

    Ms. LaGrand pled guilty to violating Title 27, USC Section 7206(2), Aiding and Assisting the Filing of a False Income Tax Return.

    August

    Editor’s Note: No disciplinary actions were published in the August issue of The CPA Letter.

    July

    __Under the automatic disciplinary provisions of the Institute’s bylaws, the following members have had their AICPA memberships:

    --Terminated because of a final judgment of conviction for a crime punishable by imprisonment for more than one year:

    Martin Goldstein of Chestnut Ridge, NY, effective May 4, 2007

    Mr. Goldstein pled guilty to Tax Evasion.

    Lloyd Silverstein of Melville, NY, effective Apr. 24, 2007

    Mr. Silverstein pled guilty to Conspiracy to Obstruct Justice.

    Robert E. Vigil of Ribera, NM, effective Apr. 3, 2007

    Mr. Vigil was found guilty of violating Title 18, USC Section 1951, Hobbs Act, Attempted Extortion.

    Paul Weiner of Wayne, NJ, effective Apr. 24, 2007

    Mr. Weiner was found guilty of violating Title 18, USC Section 1956(h), Attempted Conspiracy to Commit Money Laundering.

    --Terminated following revocation of their CPA certificate, license and/or permit to practice by their state boards of accountancy:

    John R. Buck of Dallas, TX, effective Apr. 24, 2007

    Mr. Buck’s certificate to practice was revoked in lieu of further disciplinary proceedings by the Texas State Board of Public Accountancy in connection with the Final Judgment of Permanent Injunction and Other Relief that he entered into with the United States Securities and Exchange Commission in Case No. 304CV2098-M.

    Michael R. Repoli of Fort Pierce, FL, effective May 30, 2007

    Mr. Repoli entered into a Settlement Agreement with the New Hampshire Board of Accountancy in which he agreed not to, in any manner, hold himself out to be a CPA licensed in the State of New Hampshire or perform public accounting services in New Hampshire, and to surrender his New Hampshire CPA certificate to the Board This agreement was based on his guilty pleas to two counts of a Class A misdemeanor, sexual assault, in the Hillsborough county Superior Court, Northern District.

    --Terminated following disciplinary action imposed by the Public Company Accounting Oversight Board:

    Edward L. Turner of Dallas, TX, effective May 30, 2007

    The PCAOB barred Mr. Turner from being an associated person of a registered public accounting firm based on their findings concerning his violations of PCAOB rules and auditing standards in auditing the financial statements of one issuer client during 2004.

    --Terminated following disciplinary action imposed by the Internal Revenue Service:

    John M. Sacco of Pound Ridge, NY, effective May 30, 2007

    Mr. Sacco was suspended from practice before the Internal Revenue Service for an indefinite period of time for failing to file his federal individual income tax returns for the years 2000, 2001, 2002, 2003 and 2004.

    June

    __Under the automatic disciplinary provisions of the Institute’s bylaws, the following members have had their AICPA memberships:

    --Terminated following revocation of his CPA certificate by the North Carolina State Board of Certified Public Accountant Examiners:

    Clark A. Clifford of Raleigh, NC, effective March 16, 2007

    Mr. Clifford’s certificate to practice was revoked by the North Carolina State Board of Certified Public Accountant Examiners for violating Board Rules: 21 NCGS93-12(9) and 21 NCAC 8N.0203, and thus 21 NCAC 8F.0111(a) for misappropriation of funds.

    --Suspended following suspension of his license to practice by the Washington State Board of Accountancy:

    Henry Chi Yin Lam of Hong Kong

    Mr. Lam’s license to practice was suspended coincident with the duration of the suspension period imposed by the Washington State Board of Accountancy in connection with his guilty plea to Eastern Magistrates’ Court summons for holding the Company in which he was the Executive Director and Shareholder of out as carrying on a business in a regulated activity namely, advising on corporate finance, when it was not licensed for such activity by the Securities and Futures Commission of Hong Kong.

    May

    Under the automatic disciplinary provisions of the Institute’s bylaws, the following members have had their AICPA memberships:

    __Terminated following disciplinary action imposed by the Public Company Accounting Oversight Board:

    Armando C. Ibarra, Sr. of Chula Vista, CA, effective February 5, 2007

    The PCAOB barred Mr. Ibarra from being an associated person of a registered public accounting firm based on their findings concerning his violations of PCAOB rules and auditing standards in auditing the financial statements of four issuer clients during 2003 and 2005.

    Armando C. Ibarra, Jr. of Chula Vista, CA, effective February 5, 2007

    The PCAOB barred Mr. Ibarra from being an associated person of a registered public accounting firm based on their findings concerning his violations of PCAOB rules and auditing standards in auditing the financial statements of four issuer clients during 2003 and 2005.

    __Terminated following revocation of his CPA certificate by the Texas State Board of Public Accountancy:

    Richard A. Causey of The Woodlands, TX, effective February 5, 2007

    Mr. Causey’s certificate was revoked for violating Board Rules: 501.53(b); 501.73(a); and 501.90(8) in connection with a Plea Agreement he entered into with the United States Department of Justice, whereby he admitted that he conspired with senior management of the Enron Corporation to make false and misleading statements, in Enron’s filings with the Securities and Exchange Commission and in analyst calls, about the financial condition of Enron, which did not fairly and accurately reflect Enron’s actual financial condition as he knew it.

    April

    __In lieu of an investigation of alleged violations of the Codes of Professional Conduct of the AICPA and/or state CPA societies, the following ethics case has been resolved by a settlement agreement under the Joint Ethics Enforcement Program:

    Member

    Paul R. Wilkinson of Santa Barbara, CA, effective April 6, 2006

    Mr. Wilkinson was expelled as a result of an Order Instituting Public Administrative Proceedings Pursuant to Rule 102(e) of the Commission’s Rules of Practice, Making Findings and Imposing Remedial Sanctions. Without admitting or denying the findings, Mr. Wilkinson was charged with engaging in improper professional conduct for purposes of Rule 102(e) of the Commission’s Rules of Practice and was permanently denied the privilege of appearing or practicing before the SEC as an accountant.

    __Under the automatic disciplinary provisions of the Institute’s bylaws, the following members have had their AICPA memberships:

    --Terminated following revocation of their CPA certificate, license and/or permit to practice by their state boards of accountancy:

    James R. Ahrns, Jr. of Dayton, OH, effective Jan. 18, 2007

    Mr. Ahrns’ license was revoked by the Accountancy Board of Ohio in connection with his suspension from appearing or practicing as an accountant before the Securities and Exchange Commission.

    Brian J. Brelje of Laguna Beach, CA, effective Jan. 18, 2007

    Mr. Brelje’s license was revoked by the California Board of Accountancy for committing repeated negligent acts; breaching his fiduciary duty when he failed to prepare and file federal and state estate and trust returns of a family trust and the final individual federal and state income tax returns of the decedent; for failing to return the family trust records and documents after being requested to do so; and for failing to respond to correspondence from the Board requesting further information after a complaint was filed by the trustee.

    --Suspended following suspension of their CPA certificate, license and/or permit to practice by their state boards of accountancy:

    Keith G. Mines of McPherson, KS

    Mr. Mines’ permit was suspended coincident with the duration of the suspension period imposed by the Kansas State Board of Accountancy for failing to timely comply with peer review.

    Edward P. Stucky of Wichita, KS

    Mr. Stucky’s permit was suspended coincident with the duration of the suspension period imposed by the Kansas State Board of Accountancy for failing to timely comply with peer review.

    David E. Wills of Pittsford, NY

    Mr. Wills’ license was suspended coincident with the duration of the suspension period imposed by the New York State Education Department for professional misconduct in connection with his failure to pay child support and maintenance.

    March

    Editor’s Note: No disciplinary actions were published in the March issue of The CPA Letter.

    February

    —In lieu of investigations of alleged violations of the Codes of Professional Conduct of the AICPA and state CPA societies, the following ethics cases have been resolved by settlement agreement under the Joint Ethics Enforcement Program: 

    —Expelled:

    Salvatore Censoprano of Foster City, CA, effective December 11, 2006

    Mr. Censoprano was expelled in connection with an Offer of Settlement he submitted on November 10, 2005 in connection with the Order Instituting Administrative Proceedings, Making Findings and Imposing a Sanction Pursuant to Rule 102(e) of the Commission’s Rules of Practice by the SEC, in connection with his performance of professional services as chief financial officer of a publicly held company. Without admitting or denying the findings, Mr. Censoprano was ordered to pay a $250,000 civil penalty and was suspended from appearing or practicing before the SEC as an accountant.

    —As a result of decisions by hearing panels of the Joint Trial Board, the following members have had their AICPA memberships:

    —Terminated:

    Phyllis Kramer of Oakland, MI, effective December 15, 2006

    Ms. Kramer was found guilty of violating AICPA Bylaw 7.4.6 for failing to cooperate with the Professional Ethics Division in an investigation of her professional conduct.

    Gregory E. Lively of Dallas, TX effective December 15, 2006

    Mr. Lively was found guilty of violating AICPA Bylaw 7.4.6 for failing to cooperate with the Professional Ethics Division in an investigation of his professional conduct.

    David S. Quindt of Onalaska, TX effective December 15, 2006

    Mr. Quindt was found guilty of violating AICPA Bylaw 7.4.6 for failing to cooperate with the Professional Ethics Division in an investigation of his professional conduct.

    January

    As a result of decisions by hearing panels of the Joint Trial Board, the following members have had their AICPA memberships:

    Terminated:

    Richard E. Lurie of Minneapolis, MN, effective November 15, 2006

    Mr. Lurie was found guilty of violating AICPA Code of Professional Conduct Rule 501–Acts Discreditable. While serving in a fiduciary capacity as trustee and “attorney in fact” responsible for managing his clients’ funds, Mr. Lurie committed fraud, breach of fiduciary duty and conversion of his clients’ money or property for his own use.

    —Under the automatic disciplinary provisions of the Institute’s bylaws, the following member has had his AICPA membership:

    --Terminated because of a final judgment of conviction for a crime punishable by imprisonment for more than one year:

    David W. Norris of Fishers, IN, effective Nov. 15, 2006

    Mr. Norris pled guilty to violating Title 18, USC Section 669 and 371, Conspiracy to Embezzle in Connection with Health Care Benefit Program.




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