Company claims it exposed Wasendorf's $215 million embezzlement
Written by Shelley Russell, Multimedia Journalist - bio | email
CEDAR FALLS (KWWL) -
A Nashville-based company, Capital Confirmation, says its technology exposed the schemes behind the former CEO of Peregrine Financial Group (PFGBest) Russ Wasendorf Sr.
"We're very pleased that our service did what we said it could do, but that wasn't the first fraud that we'd uncovered, and it certainly hadn't been the last," said Founder and President of the company Brian Fox.
Fox said about 80 percent of companies still use a paper-based confirmation system, leaving a high risk for fraud to continue to occur.
But according to Fox, more companies are switching to an electronic confirmation system through his company which he said is 100 percent fool-proof.
Fox said without electronic confirmation, it's easy for a CEO to hide illegal activities and theft because a CEO can pretend to be a bank, as was the case with Wasendorf.
Fox said when Wasendorf's bank, U.S. Bank, switched to an electronic method of confirmation, he was cornered.
"When he realized that the auditors were going to find out once they used the system on Monday, that was when he went in and tried to commit suicide that morning before the auditors found out a couple hours later that he had been committing fraud for 20 years," he said.
Fox encouraged investors to ask the auditor or regular how he or she verifies cash balances.
"If the auditors are verifying the cash or receivable via eelectronic confirmation, then they've got a much higher level of certainty taht the revenue is legitimate and cash is really on hand," he said.
More information on Capital Confirmation can be found online here.
Monday, September 1 2014 5:41 PM EDT2014-09-01 21:41:17 GMT
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