Celebration of Gary Welsh's Life

The following was sent via e-mail today by Leon Dixon.  I have been asked by the Indianapolis Tea Party to post it on my blog.  I've made a few minor changes.  Thanks Leon.  A similar call was issued by Paul Ogden on his blog. 

     "This Thursday evening, a gathering will be held to honor his memory and to let his family know how important he has been to Indianapolis and the cause of reducing political corruptions both large scale and small.  The gathering will be at K of C North, beginning at 6:30 p.m. and concluding officially no later than 8 pm.  There will be, as with our Tea Party North meetings, a special menu beginning around 5:30 p.m.  Gary had been a speaker several times to the TPN and often enough attended meetings when the topics were of interest to him.  

     I'm told that a number of Gary's family will show up as we had told them that the timing of their services in Terre Haute were inconvenient for a number of Indianapolis area people who also have day jobs.  Those of you who follow blogs in Indiana pretty much know that Gary's Advance Indiana had a good reputation

      Still, respect is due Gary for standing against and for exposing much that our timid mincing media can't touch for lack of ability, gonads, and the freedom to pursue (e.g. controlled media is controlled for reasons).  I know that Gary sourced some of his ideas with television stations who have attempted to pick up some of the slack.  Other print media actually stole Gary's work and used it without attribution (in my opinion).  Still others having attempted to have local media look into serious problems gave up on them and pushed Gary to break the news to people who cared about such.

       A really bad blow for those kinds of people is that Gary had a lock trap filing system mind.  He seems to have never forgot anything and was able thus to make connections of dots that would not make sense to anyone without his institutional memory.  This could produce long conversations but they were not boring because to the rest of us it was new information.  So, come on by, say a word or two, celebrate our loss."

Refugees With Infectious Tuberculosis Sent to Indiana by Federal Government

In 2015, almost 400 migrants with signs of Tuberculosis settled in Indiana, according to state records.

The state’s TB rate had declined for over 50 years up to 2010, but is now increasing as more migrants are forced by the Federal Government to settle in Indiana. 

According to the "State of Indiana Refugee Health Program Annual Report" dated last December 2015.  Here is the report link.

Why hasn't the press made the public aware of this problem? Is this another example of political correctness?

UPDATE:  According to Arizona officials, as reported by Breitbart, eighteen percent of all refugees resettled in Arizona arrive with a latent TB infection.  

Gary Welsh Dead

By Greg Wright

MBA, CFE, CFP®, CLU, ChFC

Certified Fraud Examiner

Certified Financial Planner™

Gary Welsh, died earlier today.  According to published reports, he died by his own hand in a stairway in the building where he lived. Like many lawyers today, he had complained about poor legal business.

He wrote the blog Advance Indiana and was unafraid of unmasking corruption.  Many of his friends had suggested that he be careful.  

Gary Welsh, on the right, is pictured while he addresses the Commissioners during a 2012 Marion County election commission meeting. He represented me in a matter I had put before the Commission.  I am pictured on the left of this photograph.    

I had asked the Election Board if then Sen. Richard Lugar and his wife, Charlene, had voted illegally in Marion County because they have not lived at the home address on their registration for more than three decades.  Gary won the case.

(Photo: Kelly Wilkinson, Indianapolis Star)

Inheritance hijacking by attorney

By Greg Wright

MBA, CFE, CFP®, CLU, ChFC

Certified Fraud Examiner

Certified Financial Planner™

Stephen W. Schuyler mug shot

Sarah Wilding trusted her attorney to give the remainder of her estate to her church’s building fund.  Elder attorney, Stephen W. Schuyler had other uses for the money.  Only recently, it finally came to light that Schuyler had over-charged and diverted as much as $500,000 from some of the 130 estate cases he was administering.

East Lynn Christian Church is a small Anderson Indiana church.  Following Sarah Wilding’s death on April 20, 2012, Schuyler paid her final expenses and distributed funds and assets to her named beneficiaries.  That was the plan.  The remainder, $145,003, was to go to the church building fund toward paying off the 2005 sanctuary expansion. 

The church was aware that Sarah had made a final gift to them, and they sought payment from Schuyler.  He stalled and requested the court approve yet another payment for additional attorney fees.  Undeterred, the church pressed him to close the estate and pay them.  Schuyler’s check bounced.

Finally, the police and prosecutor investigated.  They ascertained that, in addition to Wilding, other estates had been looted.  They identified four other estates specifically, and 130 unsettled estates that were eventually assigned to other attorneys.

The East Lynn Christian Church filed a civil complaint against Schuyler and his girlfriend, Kem Golden, for conversion of $164,101 from the Wilding estate. In addition to the civil complaints,

Charges have been made that involve the estate of Frances Clem from 2010 to 2014 of $156,790. Other victims may include other churches, and the local Humane Society. 

Unsurprisingly, Schuyler’s law license was suspended indefinitely, and he is facing 13 felony counts. 

Since supervision may be lax or even non-existent, there are probably similar cases in other communities that have simply not been reported.  The deceased had counted on a trusted attorney to carry out their final requests and not to loot the estate.  But, the lawyer treated the estate assets like his personal piggy bank.

Inheritance hijacking is not that rare.  Thieves who target the elderly and the dead are cunning and patient.  The vulnerable elderly within us are perfect targets – 20 percent are victims.

Strongly consider not waive the requirements that executors be bonded, as many attorneys suggest.  Consider not giving your attorney authority to be your executor.

Oh Snap, 401K

By Greg Wright

MBA, CFE, CFP®, CLU, ChFC

Certified Fraud Examiner

Certified Financial Planner™

"401(K)s are a great way to save for retirement?"  Sometimes.  "Taxes deferred are taxes saved?"  Not always!

401(K) expenses may offset investment gains.

Employees are suing their employers because of high fees. 

Here’s a short list of employers being sued: Anthem, Cigna, Caterpillar, British Petroleum, Boeing, Wal-mart, New York Life.

The courts may be interested; but, the regulators appear to be less interested – especially in the smaller plans.  Smaller employers have even higher fees than the big boys.  Your boss’s BFF may pay his BMW lease because of your retirement account. 

Groucho tells the story when he went to Bloomingdales department store and stole a printing press.  He was caught on the way out, and the store manager threatened to have him arrested. Bloomingdale himself told the store manager, “All the kids in this neighborhood steal. Let him go.” So Groucho went home scot-free.  The same thing happens to small 401(K) plan sponsors.  Probably less fiduciary behavior; few are investigated and fined. 

The dirty little secret is that employees pay almost all the 401K expenses.  Many plans are designed so that the company pays very little except for a “standard” plan document.  Since it is a fill-in-the-blanks plan document in the salesman's laptop, there is little or no fee.  Here are some 401(K) costs.  How much are you and your fellow-employees paying for these expenses? 

·                Investment advisor fees for managing the fund’s portfolios

·                Marketing fees

·                Shareholder service fees

·                Custodial expenses

·                Legal expenses

·                Accounting expenses ·                Sub-accounting fees

·                Transfer agent expenses

·                Brokerage Commissions

·                Sales loads

·                Redemption fee

·                Exchange fee

·                Account fee

·                Purchase fee

·                Maintenance fee

·                Plan set-up

·                Portfolio management fees

·                Educational materials and services expenses

·                Record keeping services

·                Employee enrollment services

·                Customer service

·                Legal advice to employer

·                Compliance testing expenses & audits

·                Fees for additional features or services – e.g. investment seminars, investment advice, loan fee

This chart from Brightscope illustrates 401(K) costs by size of the plan.  If your expenses are above one or two percent, you are probably paying too much.  The 401(K) guy (increasingly a gal) that shows up to answer questions and give an “investment” training lecture must be paid.   Can we talk about 401(K) investment returns?  Please.   You did know that few plans do better than broad market indexes?  In a good year, maybe 25% beat the Dow – before plan expenses.  According to some sources, not one 401(K) asset manager has been better than the Dow or S&P 500 for four consecutive years.  One writer said that a monkey throwing darts at the newspaper stock page would do better than most. Even if the employer has some sort of match, after expenses, vesting and poor performance, your returns may be negative.  Does the employer match go the same place your money goes? Does your company plan suck?  High expenses, low returns, The rep shows up in a BMW, pals with the boss and lives large.  If your company 401(K) sucks, you may not want to sue your employer.  Yes, it could be career limiting.  Some are quietly going another direction.  Here is a partial list of 401(K) alternatives from a recent US News & World Report: Use a taxable investment account.  Automatic deposit to an annuity or bank savings account.  Consider the myRA.  Set up direct deposit for your tax refund.

Cheating the elderly

By Greg Wright

MBA, CFE, CFP®, CLU, ChFC

Certified Fraud Examiner

Certified Financial Planner™

About 20% of Seniors are victims of financial fraud, and yet only 5% of the victims report the abuse.  The reasons for the low reporting include humiliation, feeling ashamed and being afraid. 

According to Federal Trade Commission, the number of complaints by people age 60 and over more than doubled between 2010 and 2014.  In the face of these alarming statistics, regulators have suggested rules to help stem the epidemic. 

In 2008, new rules prohibited the use a senior-specific professional designation that indicates or implies that the insurance or stockbroker had special certification or training in advising or servicing seniors.  Excluded from the regulations were Certified Financial Planners and six other designations[i], in part, because of their training and professional organization oversight.

Unfortunately, this rule has not seen enforcement, and I am unaware that anyone in violation of the rule has seen his license suspended, revoked, or has been issued a “cease & desist” order.   I’ve asked both the Indiana insurance and securities regulators.

Along comes the latest attempt this past September.  This latest proposed Model Rule has been designed to help protect vulnerable adults by requiring supervisors of stockbrokers and investment advisors to report when they have a “reasonable belief that financial exploitation of an eligible adult (age 60 or older) has been attempted or has occurred.” 

Good luck.  Caveat emptor. 

---

[i] Certified Investment Management Analyst - CIMA

Accredited Retirement Plan Consultant - ARPC

Certified Medicaid Planner - CMP

Certified Retirement Counselor - CRC

Certified Retirement Financial Advisor - CRFA

Certified Senior Advisor – CSA

Veros Partners Redux

By Greg Wright

MBA, CFE, CFP®, CLU, ChFC

Certified Fraud Examiner

Certified Financial Planner™

It was reported here last week that Veros Partners’ accounting business was quietly sold behind closed doors to insiders by the Court Receiver, William E. Wendling, Jr.  The business was not offered for sale to other potential purchasers and a written valuation report was not provided to the Federal Judge assigned to this SEC Ponzi fraud case. 

The attorney representing the accused has denied that it was a “Ponzi scheme.”  The case is complicated and will probably not be heard in court for another year.  Veros had hundreds of dental practice clients in Indiana and Ohio.  Perhaps Veros Partners had a market value of over $3 million before SEC case was filed. 

It is difficult to familiarize yourself with this case and not see hints of parallels with another Midwestern accounting firm that was crippled by its association with fraud – Arthur Andersen.  

You may recall that in 2002, Andersen was convicted of obstruction of justice for shredding documents related to its audit of Enron. Since the Securities and Exchange Commission cannot accept audits from convicted felons, the firm surrender its CPA licenses that year — effectively putting it out of business.   Even though the conviction was later reversed by the Supreme Court, it was too late.  The impact of the scandal combined with findings of criminal conduct ultimately destroyed the firm. 

A detailed account was published in 2002 by Andersen’s home-town newspaper, the Chicago Tribune.

Several key employees at Veros Partners were previously employed by Arthur Anderson.  It does not appear that any of these individuals were involved in the Enron scandal or have any prior blemishes on their professional record.  SED lawsuit defendant Matthew Haas is an Arthur Andersen alumni, 

Other Arthur Anderson alumni include some of the founders of the Veros Partners successor firms -- Trueblaze, LLC and MW Banks Consulting.  According to their LinkedIn pages and Veros Partners biographies, Adam Decker and Mylene Egenolf were employed at Andersen. 

Trueblaze was created on May 27, 2015, by Adam Decker and includes former Veros employees Sarah Robinson and David Osowski.  

MW Banks Consulting, LLC was formed on June 5, 2015 and appears to be operated by former Veros employees Amber Banks, Mylene Egenolf, and Wendy Day York.  Both organizations appear to have offices on the South side of Indianapolis near Greenwood. 

According to court records, before its purchase of assets from Veros Partners, MW Banks had already started providing services to former Veros clients and had received payments for those client services.  Further, court records indicate that Banks, Egenolf, and York has signed non-compete agreements while Veros employees. 

The bookkeeping, tax and audit business may not be as lucrative as you might first think.

 

According to the Chicago Tribune, Arthur Andersen embarked on a path that valued hefty consulting fees ahead of “bluntly honest bookkeeping,” and promoted a “slicker breed” of accountants who could turn modestly profitable auditing assignments into consulting gold.  Thus, the article concludes, eroding Andersen's prior good name.

Veros Partners’ defendants have not been convicted of wrongdoing.  I am certain that we will hear more from the defendants as the court date rolls around.

Veros Partners, not unlike other CPA firms, had moved beyond providing clients with “incidental” advice on investments and become Registered Investment Advisors.  Some CPAs offer personal financial planning and earn commissions by selling stocks, mutual funds, annuities and private placement investments. 

In 1988, after more than 80 years, the American Institute of Certified Public Accountants reversed a longstanding position by allowing accountants to sell stock, mutual funds, annuities, insurance products, limited partnerships and loan brokerage services in competition with other financial services professionals. 

For many of us, CPA firms are supposed to be guardians of the public trust, functioning like the police of the financial world. They know the rules, define the right and wrong way to keep the books. If a CPA firm puts its name on a financial statement, it certifies to the public that the company is playing by the rules and that the numbers conform to a high standard.

When a CPA – any CPA -- following a review of your taxes, suggests that you invest in his “homemade” private placement or a mutual fund, you might pause and ask yourself.  Is he making a higher commission on the investment than he makes for doing my taxes?  Do I need to find a CPA to review the investment suggested by my CPA?

By the way, court-appointed Receiver, William E. Wendling, Jr. has received fees of $390,375.26.  More than the court was paid for the Veros Partners accounting business.  You may read his justification for its sale at the end of last weeks article.  

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