I hoped that Overstock.com (NASDAQ: OSTK) had finally learned the error of its ways. Now it seems that the company has again resorted to accounting shenanigans to inflate its reported income.
From Q2 2007 to Q2 2008, Overstock.com used an improper EBITDA calculation to materially overstate its pro-forma income in violation of Securities and Exchange Commission Regulation G. From Q4 2008 to Q3 2009, the company violated Generally Accepted Accounting Principles (GAAP) and materially overstated its reported earnings. I endured malicious personal attacks, cyber-stalking, pretexting, and threats to my personal safety from Overstock.com’s gun-toting CEO Patrick Byrne and his paid thugs in retaliation for exposing its illegal accounting practices. In each case, I complained to the Securities and Exchange Commission. Eventually Overstock.com was forced to stop using those illegal accounting practices. It seems that Overstock.com is up to its old tricks again.
Read the rest over at Eddie's blog. He's an insightful character. For some background, here's his disclosure statement:
I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped my cousin Eddie Antar and other members of his family mastermind one of the largest securities frauds uncovered during the 1980's. I committed my crimes in cold-blood for fun and profit, and simply because I could. If it weren't for the heroic efforts of the FBI, SEC, Postal Inspector's Office, US Attorney's Office, and class action plaintiff's lawyers who investigated, prosecuted, and sued me, I would still be the criminal CFO of Crazy Eddie today. I do not want or seek forgiveness for my vicious crimes from my victims. My past sins are unforgivable.
There is a saying, "It takes one to know one." I've provided professional work for the FBI, IRS, SEC, Justice Department, and other federal and state law enforcement agencies in training them to identify fraud and catch white-collar criminals. Often, I refer cases to them as an independent whistleblower. In addition, I teach white-collar crime classes for various government entities, professional organizations, businesses, and colleges and universities. Recently, I've helped the AICPA Fraud Task Force develop better methods for detecting fraud.