Sunday, December 20, 2015

Innovate Mississippi refiles lawsuit against accountants.

Innovate Mississippi sued its former accounting firm in Madison County Circuit Court on December 16.  The company accused accounting firm Carr, Riggs, & Ingram, LLP of failing to detect alleged embezzlement by its former Chief Financial Officer, Tanya Klauser.   Innovate Mississippi claims the embezzlement was more than $500,000 and probably $1 million.  Innovate Mississippi was formerly Mississippi Technology Alliance.  Ms. Klauser pleaded guilty to embezzlement in October 2014.

 Innovate Mississippi sued the firm in federal court in October but the case was dismissed for lack of jurisdiction.   Innovate Mississippi is a Ridgeland non-profit company that focuses on helping technology start-up companies obtain venture capital from private investors.  The company charged that CRI should have detected Ms. Klauser's alleged embezzlement.  The complaint restates the charges that were made in the federal lawsuit:

For each year it prepared audits for Innovate, CRI issued "clean" audit reports in every material aspect.  At no time during its tenure did CRI ever raise a concern of any significance involving Innovate's management, internal contrnols, or financial practices.  CRI repeatedly informed Innovate's board of directors that it uncovered no material deficiencies...

Innovate replaced CRI with BKD, LLP as its new auditor for the fiscal year ending on June 30, 2013.

Durins its initial assessment, BKD immediately discovered several issues of concern regarding Innovate's CFO, Tanya Klauser, and Innovate's internal controls.

BKD advised Innovate regarding its concerns and Innovate subsequently engaged BKD to conduct a full forensic investigation.

Through its forensic investigation, BDK discovered three types of unauthorized transactions perpetuated by Klauser:

1) unauthorized payments to Klauser's personal credit card.
2) unauthorized expense report charges
3) unauthorized charges to Innovate's credit card.

It was discovered that Klauser had embezzled more than $500,000 from Innovate during her employment.  The exact amount of Klauser's embezzlement has not been finally commputed but is believed to be approximately $1.0 million....

Indeed, BKD discovered Klauser's fraudulent activity in a matter of days whereas CRI gave no hint during its long engagement (six years) that either fraud was occurring....
The 2013 tax return states Ms. Klauser's salary was $115,916 and her benefits were $12,619.  The 2012 tax return states her salary was $110,311.  The 2013 tax return claims a loss on embezzlement of $165,123 although the 2014 tax return is not available.

The case has been assigned to Circuit Judge Steve Ratcliff. 

* Sentence: "30 days incarceration; 2 months halfway house; 3 years supervised release, with 6 months being home confinement; $598,143.38 restitution; $100 special assessment. Signed by District Judge Tom S. Lee on 9/10/2015 (ND)" Earlier post with copy of charge and order.

Kingfish note: The Clarion-Ledger has apparently chosen to bury this story.  The CEO of Innovate Mississippi pens a regular technology column for the newspaper.   One would think that an embezzlement of over half a million dollars from a local company and a lawsuit against the former accounting firm would garner attention on South Congress Street but such is apparently not the case. 




15 comments:

Anonymous said...

No way one person can steal this much with out help. This outfit has a history of being filled with dirty people.The audit firm did not look the other way without being made to.

Anonymous said...

Who was the partner from CRI on this audit? The manager? Someone reading this knows.

Anonymous said...

It is odd that the C-L is crickets about this story. She was ordered to pay $600,000 restitution and I hear she still teaches Sunday School.

Maybe JFP and Northside Sun can pick up this story and then the C-L and Supertalk radio will then say something about this rat hole.

Anonymous said...

Didn't she work at the firm before coming to Innovate? If the CFO and auditors are that close, theft and embezzlement be very easy. What is the story for the Clarion Ledger? We know a theft occurred. Time will tell the rest.

Anonymous said...

Didn't she work at the firm before coming to Innovate? If the CFO and auditors are that close, theft and embezzlement be very easy. What is the story for the Clarion Ledger? We know a theft occurred. Time will tell the rest.

Anonymous said...

How much State money has I.M under all its different names over the years.Many , many millions.

Anonymous said...

Kingfish....quit protecting CRI and let people name the partner/manager involved. I've tried to name them on this post, as well as the last post, yet for some reason neither comments were approved.

And if you think this is the only fraudulent audit conducted by CRI, then you are a fool.

P.S. CRI is very involved with the State of Mississippi and the Mississippi Development Authority.

Anonymous said...

I wonder what the correct spelling of Ms Klauser's first name is.

The suit uses Tanya but the filings in the criminal case use Tonya.

Anonymous said...

I already know I'll get beat up about this but isn't this the way the system's supposed to work? Somebody does something wrong, they get caught, they pay. I love the way all you W2 disgruntleds have an answer for everything. You must feel satisfaction that your non-credited thoughts "are up in lights". You guys are the best, I bet more than half of you work in state government and are just mad no one listens to you.

Jackistan Can! said...

If the original accounting firm is supposed to detect this level of fraud from its documents and spreadsheets, then what is the responsibility of the CEO and other staff at Innovate MS to detect such fraud as well? Should they sue themselves? Were they too dumb to notice after 6 years that the lady down the hall was a little richer than normal??

Anonymous said...

Audits are not designed to detect fraud. An audit is an opinion that the financials are presented according to Generally Accepted Accounting Principles (GAAP). In addition, Management bears responsibility for the financials NOT the accounting firm. It appears this was a case of management over-ride of internal controls.

https://www.crfonline.org/orc/cro/cro-11.html

Anonymous said...

Bernie went to jail becuase he was supposed to know. Whether he knew or not, he should have. Seems like this board needs to face a judge too. How can $500k or more be missed in such a small budget?

By the way, how much is the budget for this outfit and how much comes from taxpayers?

One more thought....why is this so different than what the Terry Mayor did? He got 20 years.

Anonymous said...

Bingo 12:00am Problem is, all of these "innovators" down there have not had a real job in the real world. The whole entity is quite silly.

Anonymous said...

The State funded this organization; what was their over sight? The entire effort has been under several names and many leaders and was a con game from the start.

Anonymous said...

Innovate Mississippi = GOP good ol' boy employment agency



Recent Comments

Search Jackson Jambalaya

Subscribe to JJ's Youtube channel

Archives

Trollfest '09

Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

Wrestling returns, except this time it will be a Battle Royal with Othor Cain, Ben Allen, Kim Wade, Haley Fisackerly, Alan Lange, and “Big Cat” Donna Ladd all in the ring at the same time. The Battle Royal will be in a steel cage, no time limit, no referee, and the losers must leave town. Marshand Crisler will be the honorary referee (as it gives him a title without actually having to do anything).


Meet KIM Waaaaaade at the Entergy Tent. For five pesos, Kim will sell you a chance to win a deed to a crack house on Ridgeway Street stuffed in the Howard Industries pinata. Don't worry if the pinata is beaten to shreds, as Mr. Wade has Jose, Emmanuel, and Carlos, all illegal immigrants, available as replacements for the it. Upon leaving the Entergy tent, fig leaves will be available in case Entergy literally takes everything you have as part of its Trollfest ticket price adjustment charge.

Donna Ladd of The Jackson Free Press will give several classes on learning how to write. Smearing, writing without factchecking, and reporting only one side of a story will be covered. A donation to pay their taxes will be accepted and she will be signing copies of their former federal tax liens. Ms. Ladd will give a dramatic reading of her two award-winning essays (They received The Jackson Free Press "Best Of" awards.) "Why everything is always about me" and "Why I cover murders better than anyone else in Jackson".

In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.


In order to help clean up the legal profession, Adam Kilgore of the Mississippi Bar will be giving away free, round-trip plane tickets to the North Pole where they keep their bar complaint forms (which are NOT available online). If you don't want to go to the North Pole, you can enjoy Brant Brantley's (of the Mississippi Commission on Judicial Performance) free guided tours of the quicksand field over by High Street where all complaints against judges disappear. If for some reason you are unable to control yourself, never fear; Judge Houston Patton will operate his jail where no lawyers are needed or allowed as you just sit there for minutes... hours.... months...years until he decides he is tired of you sitting in his jail. Do not think Judge Patton is a bad judge however as he plans to serve free Mad Dog 20/20 to all inmates.

Trollfest '09 is a pet-friendly event as well. Feel free to bring your dog with you and do not worry if your pet gets hungry, as employees of the Jackson Zoo will be on hand to provide some of their animals as food when it gets to be feeding time for your little loved one.

Relax at the Fox News Tent. Since there are only three blonde reporters in Jackson (being blonde is a requirement for working at Fox News), Megan and Kathryn from WAPT and Wendy from WLBT will be on loan to Fox. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both and a torn-up Obama yard sign will entitle you to free drinks served by Megan, Wendy, and Kathryn. Get your tickets now. Since this is an event for trolls, no ID is required. Just bring the hate. Bring the family, Trollfest '09 is for EVERYONE!!!

This is definitely a Beaver production.


Note: Security provided by INS.

Trollfest '07

Jackson Jambalaya is the home of Trollfest '07. Catch this great event which promises to leave NE Jackson & Fondren in flames. Sonjay Poontang and his band headline the night with a special steel cage, no time limit "loser must leave town" bout between Alan Lange and "Big Cat"Donna Ladd following afterwards. Kamikaze will perform his new song F*** Bush, he's still a _____. Did I mention there was no referee? Dr. Heddy Matthias and Lori Gregory will face off in the undercard dueling with dangling participles and other um, devices. Robbie Bell will perform Her two latest songs: My Best Friends are in the Media and Mama's, Don't Let Your Babies Grow up to be George Bell. Sid Salter of The Clarion-Ledger will host "Pin the Tail on the Trial Lawyer", sponsored by State Farm.

There will be a hugging booth where in exchange for your young son, Frank Melton will give you a loooong hug. Trollfest will have a dunking booth where Muhammed the terrorist will curse you to Allah as you try to hit a target that will drop him into a vat of pig grease. However, in the true spirit of Separate But Equal, Don Imus and someone from NE Jackson will also sit in the dunking booth for an equal amount of time. Tom Head will give a reading for two hours on why he can't figure out who the hell he is. Cliff Cargill will give lessons with his .80 caliber desert eagle, using Frank Melton photos as targets. Tackleberry will be on hand for an autograph session. KIM Waaaaaade will be passing out free titles and deeds to crackhouses formerly owned by The Wood Street Players.

If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

This is definitely a Beaver production.

Note: Security provided by INS
.