FAB Universal Corp. (fka FABU)

[eastwindwards]

Shady accounting/audit situation for these guys? The S-1 lists Gregory & Associates from Salt Lake City, UT, as the auditor. I did some digging and uncovered a few facts:
1. It's a one-man shop registered as a residential address
2. They have been FAB's longtime auditors from before and during the fraud that occurred a couple of years ago
3. They are also the listed auditors of Future Healthcare of America, a listed penny stock company that shares the same CEO/CFO/Board with FAB
4. Gregory & Associate's Public Company Accounting Oversight Board (PCAOB) reports indicate that they have had 1-3 clients in any given year

So, seems like FAB is reporting info on the S-1 from a one-man shop that is a captive vendor largely dependent on the FAB execs/board for his livelihood. Should this be cause for concern? Is this stuff even legal?

For those experienced with these matters, who bad was it that this auditor did not catch the $100 million fraud at FAB a few years ago? Is it something most auditors would not be able to see OR it is a wink-wink situation where the auditor technically did not break any laws but everyone knows they were in the pockets of a set of swindlers?


Here are links to the info I found:
Gregory & Associates registration in UT: https://secure.utah.gov/llv/search/detail.html?license_id=3879369

PCAOB reports:
- 2015: https://pcaobus.org//Inspections/Reports/Documents/2015-Gregory-LLC.pdf
- 2013: https://pcaobus.org//Inspections/Reports/Documents/2014_Gregory_Associates_LLC.pdf
- 2011: https://pcaobus.org//Inspections/Reports/Documents/2011_Gregory_Associates_LLC.pdf