Question

In the Beazer Homes fraud case, describe the evidence that may have been collected.

Answer 1

Based on  the evidence at trial, Michael T. Rand the chief accounting officer of Beazer Holmes carried out the conspiracy by employing two different ways:

• Between 2005 and 2006, Rand entered into a hidden consensus with another company through one of its employees, which was set up in such a manner that would allow Beazer to procure cash and to inappropriately report revenue from the inflated “sales” of model homes. The above activity that is described is direct infringement of the accounting rules and obscured from Beazer’s auditors.
• Between 2000 and 2007, Rand directed a scheme to commit securities fraud and tried to cook false books and records at Beazer by practicing “cookie jar accounting,” which allowed Rand and others to falsely report profits in Beazer’s publicly reported financial statements.

The jury also convicted Rand of two charges of obstruction of a Federal Grand Jury investigation and a charge of destroying dossier in violation of the Sarbanes-Oxley Act (also known as the Public Company Accounting Reform and Investor Protection Act) . The evidence at trial showed that after being notified of the Federal Grand Jury’s investigation of Beazer in March 2007, Rand deleted nearly 10,000 e-mails, including emails containing evidence of his accounting fraud as well as the mortgage fraud occurring at Beazer Mortgage Corporation, an entity shut down by Beazer as a result of this investigation.