Executives of McCann-Erickson charged with accounting fraud
Posted on 30. May, 2008 by admin in Bad Apples
The SEC charged two executives at McCann-Erickson Worldwide with accounting fraud. The SEC charges allege that the company overstated revenue in the 1997 to 2002 time period by $181 million. The overstated revenue was material and defrauded the parent company investors.
Salvatore Lagreca, Vice Chairman and Director Finance, and Brian Watson, Director of Operations for the Middle East and Africa, were accused of deliberately delaying reconciling company accounts. Mr. Lagreca was responsible for corporate accounting, finance and strategic planning. Mr. Watson was not an accountant, but was responsible for the accounting operations in his division, because there was not an individual in the capacity of accounting manager. The division’s expenses were shown as receivables for the parent company, but the division’s expenses were never recognized. The SEC charges that the executives willfully delayed reconciliation so the error would not be discovered.
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