Question

3. Find a recent article of news that is related to computer crime or Accounting Fraud or Identity theft, Summarize it and tell me how it was detected and what was the punishment. 2-3 paragraphs. Use the internal control power points and chapter 11 from the AIS book as well.

Answer 1

One of the employees was sentenced to five years in prison, after he admitted that he misused client funds to invest in a wind farm project and to cover his own personal expenses, including college tuition for his children. The proceedings came after a former employee of the New York-based financial services firm who worked under Polese,

According to court papers, in 2014, Polese and Peterson transferred $100,000 from a Morgan Stanley client’s account without his permission to invest in a private equity fund created to support a wind farm project. Prosecutors said Peterson was on the fund’s board of directors, and Polese had himself invested money in the wind farm project, which needed additional funding. Both men later in 2015 used $400,000 from the account of an investor, to back a letter of credit in support of the project, causing him to incur $12,000 in fees, prosecutors said. Without investor approval, in 2016 they also transferred $350,000 from his account, which was used for a real estate investment and to pay for Polese’s personal expenses, according to court papers. Polese also in 2017 used more than $93,000 from investor’ account to make college tuition payments for two of his children and to pay his own credit card bills, prosecutors said.

This was uncovered by the investor when he was gone through the statement of account and find out that certain transactions and investments was made out without his approval or consent and even the Internal controls failed I,e division of responsibilities as the employees collide and it is one of the inherent limitation of the internal control Company should also implement control were as funds can be transferred only after the approval of the the investor and they should also perform external confirmation procedures once in a year Polese and Cornelius Peterson was sentenced in June to 20 months in prison for participating in the scheme. Polese,who pleaded guilty in April to investment adviser fraud and bank fraud charges.In addition to prison, court ordered Polese to pay a $30,000 fine and $462,000 in restitution jointly with Peterson.