Spear Safer

Miami, FL: (Jul-10-07) A financial fraud lawsuit was filed against accounting firm Spear Safer, alleging that the company improperly audited a financial company, Mutual Benefits, accused of defrauding 30,000 investors out of $830 million. Mutual Benefits bought 8,900 insurance policies from senior citizens and terminally ill patients, expecting the policies to yield death benefits of $1.8 billion. The company sold $1.2 billion in shares to investors until the Securities and Exchange Commission (SEC) closed down Mutual Benefits in 2004, charging it with operating a Ponzi scheme. Mutual Benefits' former president received a 20-year prison sentence in connection with the SEC crackdown. The plaintiffs' alleged that Spear Safer overlooked a series of red flags in Mutual Benefits' accounting statements while auditing the company between 1994 and 2003. Though Spear Safer did not admit wrongdoing, it agreed to a $3.5 million settlement to resolve allegations. [WEB CPA: FINANCIAL FRAUD]

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Published on Jul-11-07