0:02 his uh his
0:05 funds monus's pension for doubling up
0:09 his bets was about to prove his
0:12 undoing the wbl was a disaster soaking up
0:13 up
0:16 money remarkably monus directed that far
0:18 more funds be used to keep the league
0:21 going by 1991 millions of dollars had been
0:22 been
0:25 embezzled but then a check to this
0:28 travel agency for wbl expenses would
0:31 cause the entire scheme to unravel the
0:33 travel agent showed the check to her
0:36 landlord who happened to be a farm more
0:38 investor he brought it to the attention
0:39 of David
0:43 shapira David shapira called in pad Finn
0:44 for an
0:46 explanation now try to put yourself in
0:48 Pat Finn's shoes for a moment what would
0:52 you have done well true to form Finn
0:54 stonewald then admitted that a million
0:56 dollars of far more money had gone to
0:59 support monus's basketball league when
1:01 in fact when more than 10 million had
1:03 already been embezzled for this purpose
1:05 shapira said he wanted to see the check
1:08 registers himself so Finn raced back to
1:11 monus afraid the entire fraud might now be
1:12 be
1:15 exposed monus suggested one last
1:18 desperate gamble according to Finn he
1:20 said there was still time to paper over
1:23 the wbl fraud as long as they didn't
1:28 lose their nerve I felt like I um I was
1:30 almost like in quicksand
1:32 I kept sinking deeper and deeper and
1:36 deeper but I always had a belief that we
1:38 could fix it I never wanted to tell
1:42 myself that um that we couldn't fix it
1:44 because if we couldn't fix it there was
1:45 nothing but
1:48 bad I remember it very distinctly he he
1:51 called Stan and myself in his
1:55 office and he said that well we have to
1:58 we have to get these checks and and type
2:00 over who they were paying out to or
2:02 white out who they were paid to I flat
2:04 out refused I soon as I heard that I
2:07 said there's no way that I'm going to do
2:11 that finally someone had drawn the line
2:13 but there was still Stan cherelstein
2:15 finnn asked his controller to come to
2:17 his home the next
2:21 morning I arrived at Pat's house early
2:24 Saturday morning we look through the
2:27 journals very briefly before we looked
2:29 at each other and knew that there was no
2:30 way that we could cover up up $10
2:32 million in advances to the world
2:34 basketball league and I think at that
2:37 point in time he and I both knew that it
2:40 was over Shapiro needed to find out how
2:43 much money was missing who did he turn
2:46 to the Auditors Coopers and livebrand
2:48 when we first heard that these checks
2:50 had been found we pulled together the uh
2:53 audit team who simply went out to start
2:56 start digging into areas that uh uh had
3:00 not been dug into prior to u to to this
3:02 discovery Coopers began interviewing
3:04 employees who could tell them what
3:07 they'd missed John Anderson was anxious
3:11 to talk they needed my help I knew that
3:14 I wanted divorced from from the pat fin situation
3:16 situation
3:18 and and I must admit I was overwhelmed
3:20 but at the same time I was I
3:24 was I was not hesitant or reluctant at
3:25 all to kind of show them everything that
3:28 I knew was going on Anderson told them
3:30 the wbl payment were just the beginning
3:33 of a huge fraud with Anderson leading
3:36 them by the hand Cooper's now discovered
3:38 the full extent of what it had missed
3:40 during four years of audits the board
3:42 had to do something it fired the
3:45 Auditors blaming them for not finding
3:47 the fraud the game was
3:50 over in fact the company that even
3:53 Walmart feared hadn't earned a dime in 5
3:56 year a tip about a check for travel
3:58 arrangements had led to the discovery of
4:01 one of the biggest corpor frauds in US
4:03 history for Mickey monus it also
4:06 appeared to be over pharmore fired him
4:09 and he was indicted on 129 criminal
4:11 counts the government accused him of
4:14 directing the fraud their Chief witness
4:16 would be his Protege Pat Finn if
4:18 convicted monus would face life in
4:22 prison and fines of more than $36
4:25 million overnight farmor's image of
4:28 success was snuffed out company filed
4:30 for bankruptcy revealed feeling that it
4:32 needed half a billion dollars to erase
4:34 the losses and the shock wave spread
4:36 quickly across the nation's business
4:38 Community as suppliers Banks and
4:40 investors learned that they'd been
4:42 backing a loser all these
4:45 years farmor's last official act before
4:47 it filed for bankruptcy was to sue
4:50 Coopers and liebrand claiming their
4:51 audits fell far short of accounting
4:54 standards were in fact
4:56 incompetent but Cooper and liebrand has
5:00 its excuse it was royally snookered just
5:03 like everyone else when you have the
5:05 most Senior Management of the company
5:06 particularly it's financial management
5:09 uh consciously setting out to fool the
5:12 Auditors uh to hide information from
5:14 them as they've testified in the monus
5:17 trial it's very hard to get around that
5:21 kind of activity uh by the by the Senior
5:24 Management but according to the SEC
5:27 Auditors have a responsibility to do
5:30 more the Auditors at the end of the day
5:33 have no room to compromise they have a
5:35 responsibility to dig deeper to be
5:38 skeptical to ask questions and to impose
5:41 a discipline on management and on the
5:44 financial reporting process that may
5:46 otherwise not be there if found
5:48 negligent Coopers will be liable for
5:50 hundreds of millions of dollars but
5:53 they're fighting back we're suing David
5:56 shapira as the CEO uh and our assertion
5:58 is that he either knew or was recklessly
6:01 indifferent in not knowing of what was
6:03 going on around him uh we believe that
6:05 they are principally responsible for the
6:09 fraud surprising to many Mickey monus's
6:12 first trial ended in a hung jury oh no
6:14 we had our minds made up he was as
6:17 guilty as I'm standing here really
6:21 there's more than enough fact to convict
6:24 I feel but some people just refus to see
6:28 the facts who was undecided one person
6:30 hung the whole jury every single kind I
6:33 believe the person was paid off myself
6:35 just I mean ta the FBI is taking these
6:37 allegations seriously and is
6:39 investigating for possible jury
6:41 tampering John Anderson in return for
6:44 his cooperation was never prosecuted
6:46 despite his role in hiding the fraud for
6:49 four years he still sees himself as a
6:52 victim you see him I used to have this
6:54 belief that all people were good and
6:56 that all people had good
6:59 intentions and where I'm at right now is
7:00 I really have a hard time trusting
7:03 people and that's something I have to
7:05 learn to do again cuz I want to do that
7:08 again but having been to this particular
7:10 experience that
7:13 really has has made me look at people
7:15 and situations and business and in unfavorable
7:16 unfavorable
7:20 Manner and I have to to learn to trust
7:23 people again Stan chlin was fired by far
7:26 more but never charged with anything
7:27 he's named in several civil suits
7:29 brought by investors and now Works in
7:32 Florida as an accountant I really think
7:35 that the situation at Farm more occurs
7:37 at small companies and midle middle siiz
7:39 companies all the time
7:41 time
7:43 and my
7:46 recommendation to any accountants or
7:50 chief financial officers would
7:53 be don't let it happen don't let it
7:58 start because once you start it's very
8:01 easy to let it happen a second time and
8:04 who knows where where it will
8:09 end it ended in jail for Pat Finn last
8:10 February having admitted his
8:13 responsibility for crafting the fraud he
8:15 reported to a federal prison to begin
8:18 serving a 33 Monon
8:21 sentence it's okay to be loyal it's okay
8:24 to uh to
8:28 uh as I to try to build a company to
8:30 nurture something from the beginning
8:33 but never never lose sight of yourself
8:35 never compromise yourself for that it's
8:36 not worth
8:39 it it's not worth
8:42 it no matter how much of a team ball
8:43 player you think you
8:46 are you're just destroying yourself and
8:47 destroying things that are that are
8:50 important to you you can understand
8:52 certain things you can understand
8:54 aggressive accounting you can understand
8:56 people who are Executives who are hard
8:58 charging who are optimistic that's how
9:00 they get to be
9:04 leaders those very things that made
9:07 someone a superb executive a superb
9:09 account a superb Chief Financial
9:12 Officer sometimes also make them a superb
9:19 criminal Mickey monus is still gambling
9:21 still denying everything and now awaits
9:24 the start of his second trial about the
9:26 jury will have to decide whether Mickey
9:35 entrepreneur what a sad day it is for
9:37 Youngstown what a black day it is for young
