Filed under: Ripoffs and Scams, Tax

The Internal Revenue Service states that from 1999 to 2004, actor Wesley Snipes didn’t file tax returns… and his income during that time was a whopping $37.9 million. What’s more, he was told in 2002 that he was being criminally investigated, but he continued to not file.

How did this happen? Apart from possibly internalizing Leona Helmsley’s sage advice (”Only the little people pay taxes”), Snipes hooked up with Eddie Ray Kahn, a known tax protester who had been banned from filing tax returns for others because of his shenanigans with a group called American Rights Litigators.

In addition to not filing tax returns, he also is accused of trying to get fraudulent refunds for over $11 million of taxes paid in 1996 and 1997. Snipes was warned on more than one occasion that he was in trouble for his tax-related activities, but it doesn’t seem to have bothered him.

The trial begins today near Orlando, Florida, where prosecutors state Snipes lived when he committed his tax fraud. The government says that at the time the fraud was committed, Snipes signed deals for the movies “Blade II” and “Blade: Trinity,” and each deal was worth more than $10 million.

Taxes on almost $38 million of unreported income? Big. Interest and penalties? Large as well. Possible imprisonment if criminally convicted? Priceless.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Bookkeeping, and is the author of Essentials of Corporate Fraud.

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Filed under: Ripoffs and Scams

Okay, this is creepy. It’s one thing to be fond of toys or dolls. It’s another thing to take a doll and treat it like a human being, especially when you’re an adult. Youngsters are encouraged to have active imaginations and to pretend when they play. Adults need to be grounded in reality, except when playing with aforementioned youngsters.

“Re-Born” dolls are being sold to adults in the United States and Britain, with the life-size ones selling for $150 to a few hundred dollars. They’re dolls that look like real babies, in a scary sort of way. I mean they look so real, it’s frightening. Check out this clip from a documentary to see for yourself.

It all sounds creepy to me. Grown women running around with these dolls and pretending they’re real? And I suppose there are some really weird men who carry on with them too. They give them baths and change their diapers and generally pretend that these toys are living beings.

Seriously, if you need to bond with a baby, call a friend. They’ll be happy to let you babysit for free for an evening or two. Heck, if you’re not too weird, they might even let you hang with their kid regularly. Sure beats paying a couple hundred bucks to pretend a hunk of rubber is the real thing.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

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Filed under: Ripoffs and Scams

Despite the claims of many who are trying to recruit new victims into their Multi-Level Marketing (MLM) scheme, you are not going to find riches there. While there are often lofty claims about many millionaires originating in MLMs or a high percentage of women making six-figure incomes from MLMs… the reality is that the people profiting from MLMs are few and far between.

Have you ever asked someone pushing an MLM for support of their claims? Have you ever seen documentation that proved there were many making executive incomes? Have the MLMs ever voluntarily offered up statistics about the success and failure of distributors?

I can almost guarantee that your answer is “no.” Why is that? MLMs don’t release figures related to the number of participants involved during the year, the failure rates of participants, or even the success rates of participants because they’re beyond dismal.

Take Mary Kay Cosmetics, for example. In the United Says alone, about 1.2 million women will be distributors at some time during this year. Of those 1.2 million women, only about 600 will earn a six-figure income after business expenses. That means that just this year, only 0.05% of women involved in Mary Kay will make that massive income. Only a little fraction of 1% of women involved in Mary Kay will achieve the high earnings. And Mary Kay is generally thought to be one of the “better” MLMs out there.

Do you want to waste your time and your family’s money on a losing proposition like this? If you were told before you signed up that you had far less than a 1% chance of making that “big money” in your MLM, would you’ve signed up? It sounds to me like you’re better off playing the lottery.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Record-keeping, and is the author of Essentials of Corporate Fraud.

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