IAM012 – Fraud, Chaos and the Death of a Public Company (Part 1)

Dark Clouds


For an Internal Auditor, bad times at the company can be the best work experiences. When I concluded my investigation on allegations that included accounting fraud, I knew I was in for some very dark days. Great training for an Internal Auditor that I’m hoping I can pass on to you (sans the high blood pressure).

I took what I thought was the best possible job as an internal auditor with a resort company.  Within 45 days of starting, I received a whistleblower complaint alleging, among other things, accounting/tax fraud.  The subsequent year and a half were the hardest days of my work life.

In this podcast series (four parts), I’m telling my story.  This is the first in series when I describe my start at the company and the whistleblower complaint that set this whole thing in motion.

Below are some links to news stories from the times, if you’re interested in seeing the stories rolling out from the press.

CFO Magazine – Gloomy Skies for Sunterra (March 3, 2006)

CFO Magazine – Sunterra Puts CEO on Leave, CFO Leaves (June 23, 2006)

Letter from Shareholder (June 23, 2006)

Motley Fool – Sunterra’s Forced Vacation (July 6, 2006)

Reuters – Update 1 – Sunterra Says Internal Controls Weak (December 7, 2006)

Reuters – Update 1 – Diamond Resorts to Acquire Sunterra for $16/Shr (March 12, 2007)

Mackinac Partners Case Study (June 15, 2007)



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