Fraud charged against H&R Block

If H&R Block did defraud clients, can those clients claim a deduction on their income tax when H&R Block prepares it? Or reduce Block's charges for the tax work?

Or maybe they would do better to try some other tax preparer...

Step One: Ask the IRS for the rulings on deductibility of losses from H&R Block.
Step Two: Change your tax preparer pronto.

My thoughts exactly.

Anyway, I've already got my taxes done, and NOT by H&R Block.

Me too! I've been using Turbo Tax for many years, and have been relatively happy with the results. The only problem has been the IRS's ignorant staff that double's some income to increase our tax liability.

I saw this article as well! H&R is really under heat right now. As we were discussing in a thread about taxes earlier, I wonder how many of these fees and "frauds" are due to H&R policies or policies from predatory lenders like HSBC. Do they get pulled into these types of lawsuits as well?

Jonsey, I don't find it surprsing for companies like H&R Block to do whatever it takes to increase their bottom line profit. That's the same crime perpetrated by most of the big accounting firms; they forgot about ethics for the big bucks.

You are right. I suppose I'm just hoping that someone will finally get some legislation passed that will hinder fees like this...that way places like HSBC and H&R block won't be able to get away with it!

Don't build up too much hope. The problem will never go away, because congress and accounting firms are part of the problem. They both play games at the expense of average Americans.

That's a fact of life that will not change during our lifetime.

I know you're right -- one can hope...although, if enough people harrassed banks like HSBC or congress, I'm sure it could help a bit I'm just so frustrated that they get away with this. At least use our taxes/money towards the programs that need it!

But I know I'm being too opptomistic...one can hope I suppose

Hope is the only thing that's left without totally divorcing ourselves from this world - which btw is almost impossible.

This is about Enron, but it's almost the same topic of fraud.

March 22, 2006
Enron Ex-Treasurer Says Lay Endorsed Accounting
By ALEXEI BARRIONUEVO
and VIKAS BAJAJ
HOUSTON, March 22 ?- A former Enron treasurer testified today that Kenneth L. Lay presided over meetings in which top executives discussed the energy company's precarious finances and endorsed the continued use of complex accounting arrangements because they made it possible for Enron to meet Wall Street's earnings expectations.

Ben F. Glisan Jr., the former treasurer, provided some of the strongest testimony against Mr. Lay heard by the jury so far, as the prosecution entered the home stretch of its case against Mr. Lay, Enron's former chairman, and Jeffrey K. Skilling, the company's former chief executive. The government expects to finish its case by the end of the month.

Corroborating previous testimony by several witnesses, Mr. Glisan detailed several meetings from the months leading up to the energy company's bankruptcy in late 2001, in which executives scrambled to shore up the company's shaky finances while Mr. Lay continued to publicly tout Enron as a stable and successful operation.

At one point, Mr. Glisan testified that Mr. Lay assigned him to "feel out" credit ratings analysts to see how big an accounting charge the company could take without risking a debt downgrade, a figure he said he determined was $1 billion.

"It was backwards; we should have taken the charges that we needed to take and deal with the consequences with the ratings agencies," said Mr. Glisan, who has served about half of a five-year prison sentence for falsifying Enron's financial results.

Dressed in a dark suit, blue shirt and red tie, Mr. Glisan, 40, spoke confidently as he answered questions from the prosecutor, Kathryn H. Ruemmler. Mr. Glisan is expected to face cross-examination from defense lawyers today later this afternoon or early on Thursday.

Mr. Lay endorsed the continued use of structured finance transactions to help the company meet its earnings targets during a two-day meeting of senior executives in the affluent Houston suburb of the Woodlands in early September 2001 and then again in a telephone call with a credit ratings analyst on Oct. 12, 2001, Mr. Glisan testified.

"We rely on those transactions," Mr. Lay said during the September meeting, according to Mr. Glisan. "They are imperative for us to hit our numbers and we will continue to do them."

But in response to questions during an all-employee meeting in Houston on Oct. 23, 2001, Mr. Lay said the company would not use the transactions, having learned its lessons. "Plain vanilla is just fine," Mr. Lay said then.

Mr. Lay also encouraged employees to talk up Enron to friends and family and reassured them that the company was in sound financial health. Mr. Lay was similarly optimistic in a conference call with Wall Street analysts in September 2001, describing the company as "fundamentally strong," and said "the balance sheet is strong."

"The company certainly wasn't strong and the balance sheet wasn't strong," Mr. Glisan said today.

Another instance of Mr. Lay's advocating for aggressive accounting, Mr. Glisan testified, came during a meeting of the board's finance committee in August 2001. At the meeting, Mr. Lay joined managers in making an appeal to directors to raise the risk limits for Enron's fast-growing wholesale power division so the company could meet its earnings target.

It was only when Herbert Winokur, the chairman of the finance committee, questioned if the earnings target was established with the assumption that the risk limits would be raised did Mr. Lay back down, Mr. Glisan testified.

Much of Mr. Glisan's testimony today focused on the period after Mr. Skilling left the company on Aug. 14, 2001, citing personal reasons. Mr. Glisan described the mood among senior executives as bleak and growing worse with each meeting.

Lay is a dead duck.


Enron's Lay lied to credit agencies: witness By Matt Daily
Wed Mar 22, 7:01 PM ET



HOUSTON (Reuters) - Former Enron Chief Executive Ken Lay lied to credit agencies to prop up the energy trader's ratings even as its cash dwindled, the company's former treasurer testified on Wednesday.


Former Treasurer Ben Glisan, 40, said Enron forewarned credit rating agency Moody's Inc. it would cut the value of some overvalued assets by $1 billion in October 2001, but Lay telephoned the agency to tell an analyst there the company had no other skeletons to hide.

In fact, Glisan said, those asset write-downs should have been at least $3.5 billion, but he and Lay knew revealing such dramatically bad news would send the company into a death spiral.

"I and Mr. Lay provided assurances that there were would be no further write-downs," Glisan said. "We knew there were large embedded losses in several parts of the company."

Lay and Skilling continued to declare their innocence, but to nobody that believed them.

They will now get what they are due.