Insurance Management

Kenneth Randall Hoberman, CFE

** ********* ****, *** ******, N.J. 07976

(C) 973-***-**** (R) 973-***-****: *******@*******.***

Position Title: Forensic Accounting Partner

*/*/** ** */11/09: Beau Dietl & Associates: 1 Penn Plaza: NY, NY.:VP

of Financial Fraud & Investigations

. Oversaw the forensic audits and investigations of the white

collar unit.

. Set up forensic audit and investigative programs.

. Wrote an article on Occupational Fraud which was published in

the American Chronicle and California Chronicle.

. Interacted with President and CEO on a daily basis.

12/07 to 02/01/09: Waterfront Commission of N.Y. Harbor: 39 Broadway,

N.Y, N.Y.: Director, Division of

Audit & Control

. Supervised the Audit & Control staff of eight auditors with

their payroll, compliance, and forensic audits and

investigations of Stevedores and warehouses.

. Worked on budgeting and payroll.

. Set up forensic audit and investigation programs.

. Interacted with Director of Legal, Director of Licensing,

Director of Police, and the Executive Director on a daily basis.

. Interacted with Assistant U.S. Attorneys and Assistant District

Attorneys involving criminal investigations.

10/06 to 12/07: U.S. Department of State (Office of the Inspector

General/ Office of Audits/Security & Intelligence) 1700 North Moore

St., Arlington, VA: Senior Auditor (GS-0511-13/10)

. Worked as a Co-Team Leader on an IT audit of the security of all

Laptop computers in the U.S. Department of State. This includes the

physical security as well as the protection of sensitive agency

information to compensate for the lack of physical security controls

when information is removed from, or accessed from outside the agency

location. Issues such as assurance and encryption were involved.

4/89 to 10/06: U.S. Justice Dept: U.S. Treasury Dept. (Bureau of Alcohol,

Tobacco, Firearms, & Explosives) 3 Garret Mountain Plaza; West Paterson,

NJ: Senior Forensic Auditor (GS-0511-13/10)

. Worked on arson for profit investigations where businesses would be

burned down generally by owner for insurance proceeds, to minimize

losses, or to cover up crimes such as embezzlement by owner.

. Worked extensively with Special Agents of IRS, BATF, U.S. Customs &

the FBI. Worked extensively with the U.S. Attorneys' Office showing

how there was means, motive & opportunity on the part of the owner of

the business that went up in flames. Served as an expert witness on

many criminal & civil fraud trials.

. Developed and had several money laundering and racketeering cases

(RICO) successfully prosecuted. Several of these cases had asset

forfeiture ramifications.

. Developed issues such as transfer pricing which describes all aspects

of inter company pricing arrangements between related business

entities, including transfers of intellectual property, transfers of

tangible goods, services, and loans and other financing transactions.

Audited multinational corporations where substantial income was

arbitrarily transferred from domestic parent to subsidiary located in

low tax rate countries such as Ireland and Bermuda. Large adjustments

were made with assistance of U.S. Competent Authority.

. Worked on program, performance, economy, efficiency, quality control,

& financial audits as a Team Leader. This has included tax audits of

large public companies (consolidations & mergers) and operational

audits where the budget of a company is compiled annually. A finished

budget usually requires considerable effort and can be seen as a

financial plan for the new financial year. If the actual numbers

delivered through the financial year turn out to be close to the

budget, this will demonstrate that the company understands their

business and has been successfully driving it in the direction they

had planned. On the other hand, if the actual numbers diverge wildly

from the budget, this sends out an out of control signal and the share

price could suffer as a result.

. Was the lead auditor on an arson investigation where there were

multiple fires over a ten-year period and repeated submissions of

fraudulent loan applications to banks to secure loan proceeds. The

U.S. Justice Department accepted my request to have the RICO

(racketeering) statute apply with the respect to the owners of the

company as well as the C.P.A. who prepared the fraudulent loan

applications (while BATF was still part of the U.S. Treasury

Department). On these fraudulent financial statements, accounts

receivables, as well as inventory, were overstated while accounts

payables were understated. I was able to determine that the financial

statements were fraudulent in the following manner. We sent letters

of confirmation to all of the target's creditors and customers

covering the three-year period immediately prior to and up to the day

of the fire. We requested that each creditor or supplier furnish us

with the amount the target owed to it on the last day of each of the

thirty six months immediately prior to the fire. We requested that

each customer furnish us with the amount it owed the target on the

last day of each of the thirty six months immediately prior to the

fire. The written responses from the creditors revealed that the

target's actual accounts payables were much greater than the accounts

payables reflected on its financial statements. The written responses

from the customers revealed the target's actual accounts receivables

were much less than the accounts receivables reflected on its

financial statements. These financial statements were presented to

banks to secure substantial loan proceeds. Money Laundering also

existed due to the fact the loan proceeds were derived from fraudulent

applications submitted to the bank and was therefore deemed to be ill

gotten gains. One principal as well as CPA pled guilty to bank & mail

fraud, and racketeering while the other 2 principals fled the country.

. Was the lead auditor on an arson investigation of an abortion clinic

where the intent of the arsonist was to make it appear that the arson

was done by anti-abortionists. I was able to pierce the corporate

veil and determine that the true owner of the clinic was not an M.D.

as mandated by the state, but a businessman who made it appear that an

Ob-Gyn M.D. employed by the clinic, was the owner of record. It was

at my urging that we subpoenaed the major insurance companies the

clinic submitted claims to. The subpoenaed records revealed that many

claims filed with the major insurance companies were fraudulent. The

target embezzled over one million dollars from the clinic. It was

done in the following clandestine manner. The target (true owner of

the abortion clinic) owned several abortion clinics. He set up and

owned a management company to bill all of his abortion clinics for

their rent, overhead, and administrative charges. This is perfectly

legal. However, when I analyzed the charges made to the abortion

clinic, I noticed that the charges appeared to be very high. By

visiting the clinic and examining its floor plans, I was able to

determine the clinic's actual square footage. I then determined what

the going rate was for commercial real estate in that particular area.

Based on the square footage analysis, I was able to determine that

the clinic was charged and paid more than five times the arm's length

rate for rent. I then used a "substance over form" approach to

determine that the clinic was grossly over charged and paid more than

five times the arm's length rate for its O/H and administrative

charges. In summary, the clinic(s) fraudulently over billed the

insurance companies and then was fraudulently over billed by the

management company, all at the direction of the target. In this

manner, the target who owned all of the clinics as well as the

management company was able to take direct control of the fraudulent

proceeds derived from the submission of claims to the insurance

companies. My findings which were presented to both the Department of

Insurance: Fraud Division as well as the U.S. Attorneys Office were

instrumental in the target pleading guilty to insurance and mail

fraud.

. Was the lead auditor on an arson investigation of several Medicaid

clinics in low income areas in the Bronx, Queens, and Brooklyn.

Patients coming to one of these clinics for treatment would be sent to

every doctor present regardless of medical complaint. Practices known

as "ping-ponging and family ganging" were designed to maximize the

profits of the clinic owners who received a percentage of each

doctor's gross billings. Other means used were "padding" of invoices

with additional procedures and visits to outright falsification of

invoices. Patients were also indiscriminately given blood tests, x-

rays and other tests in order to inflate billings. As a result of my

contribution, we obtained 25 convictions of doctors, chiropractors,

podiatrists and clinic employees, of a total of 81 felony counts,

which included conspiracy to defraud the government, false claims,

false statements, mail fraud, filing false income tax returns and

income tax evasion. Most of the convictions were by waiver of

indictment and plea of guilty. Most were sentenced to various terms

of imprisonment ranging up to one year. The government

obtained $620,000 in civil judgments under the False Claims Act. As a

direct result of this investigation, a new investigation was conducted

in conjunction with the Internal Revenue Service into medical

laboratories.

. I have an extensive knowledge of laws, regulations and legislation

relating to criminal statutes such as mail/wire fraud, false claims,

money laundering and the R.I.C.O. statute.

Job Related Training Courses

Advanced Microsoft Word-2009

Advanced Microsoft Excel-2009

Advanced Microsoft PowerPoint-2009

Job-related honors, awards, and special accomplishments:

. I am a Certified Fraud Examiner and am in good standing with the

Association of Certified Fraud Examiners.

. I have written an article on the Racketeering Influential & Corrupt

Organizations (RICO) statute for the PCIE/ECIE Journal of Public

Inquiry. RICO is a very powerful tool that the U.S. Government has

used against organized crime, insider traders, extortionists,

perpetrators of securities fraud, etc.

7/73 to 4/89: U.S. Treasury Dept. (Internal Revenue Service) 6 WTC, NY, NY

Internal Revenue Agent (GS-0511-13/4): 1982 to 1989 Team Coordinator: Large

Case (Received Promotion to GS-13 in 1985)

. As a Team Coordinator in the Large Case Branch of the IRS where I

worked on teams, coordinating examinations of multinational and

national corporations and other complex entities, I developed issues

such as allocation of income and expenses between related companies,

Controlled Foreign Corporations, foreign exchange rates, foreign

exchange trading solutions, piercing the corporate veil, etc.

. As Team Coordinator in the Large Case Section of IRS, I worked closely

with the senior levels of management of corporate tax departments and

their representatives. I researched and developed issues and conveyed

these issues with taxpayers via discussions and meetings. When very

technical or at times, embarrassing issues or adjustments would arise

from the Large Case audit, I would have to meet with the head of the

tax department, taxpayer and taxpayer's representative. The issues

and possible adjustments were at times, so sensitive, that extreme

diplomacy on my part had to be exercised. I was a representative of

the Internal Revenue Service, conducting large case audits of large

and powerful public companies. It was absolutely essential that the

companies we audited, perceive the IRS Team as being professional,

fair, and impartial. While auditing a well known public cosmetics

firm, I uncovered more than a half million dollars of prostitution

related expenses hidden and disguised in the travel and entertainment

account. I brought this to the attention of the head of the tax

department. After an unsuccessful meeting with just the two of us

attending, we had a second meeting in which the corporate taxpayer was

represented by a prominent tax attorney, two C.P.A.s from the firm

that prepared the corporate tax return, and the head of the tax

department. My supervisor and I represented the IRS. The tax attorney

began by stating that the expenses in question were ordinary and

necessary under Section 162 of the Internal Revenue Code and promoted

current and future business. I responded by stating that Section 162

of the IRC does not allow expenses that are against public policy nor

do they allow expenses that encompass the moral turpitude of society.

After much discussion and debate, I told the taxpayer's

representatives that I was prepared to write the case up unagreed.

The tax attorney's face turned ashen. He stated that it was

absolutely imperative that the shareholders do not find out about the

prostitution related expenses. I knew at that moment they were going

to agree with the dollar amount of my proposed adjustment. Keeping in

mind they were representing their client on an extremely sensitive

matter, I took it upon myself to be as professional & diplomatic as

possible. We had an agreed case for the full amount of my proposed

adjustment as I told them I would write the adjustment up as travel &

entertainment with no mention of the prostitution related expenses.

1973 to 1982: Internal Revenue Agent

. Performed tax examinations of closely held corporations, partnerships

and Sub Chapter S Corporations. I audited different taxpayers daily

and was exposed to different books of original entry, accountant's

work papers and internal controls on a daily basis. I researched and

developed complex issues such as thinly capitalized corporations and

allocation of income and expenses between related companies (Section

482 of the Internal Revenue Code). I obtained a proficient

understanding of internal control systems to plan the audit by

performing procedures to understand the design of controls relevant to

an audit of financial statements and whether the controls have been

placed in operation. Consideration was given to the extent to which

computer processing was used in each significant accounting

application, the complexity of the entity's computer operations as

well as the organizational structure of the computer processing

activities.

. Used statistical sampling on my large case audits while with the IRS

and on my revenue audits of breweries while with the BATF.

Statistical sampling is based on the laws of probability and is

derived from them through complex mathematical procedures. The

primary purpose of the statistical approach is to provide a more

objective result from a sample, together with a means of measuring the

reliability of the estimate so obtained. The appropriate degree of

testing will be that which may be relied upon to bring to light errors

in about the same proportion as would exist in the whole of the record

being tested.

Education: 1977-1980: St. Johns University, Jamaica, N.Y. (completed 18

credits toward Masters of

Business Administration in Taxation):

1969-1973: Pace University, New York, NY: Bachelors of Business

Administration, 1973: Accounting

and Financial Management (Two years on Deans list):

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