MARKET SCAMS

[thepennyking]

San Jose club sues Deloitte
Paul Ivice
Correspondent
SOUTHSIDE -- Stung by an alleged embezzlement loss of more than $1 million, San Jose Country Club is suing the accounting firm it contends should have noticed the theft.


The lawsuit filed in Duval County Circuit Court names as defendants Deloitte & Touche and Gabriele M. Beyer. He is the audit manager at Deloitte & Touche the club says was responsible for the audit of the club's financial statements.

William Dietz, 47, who was controller for San Jose Country Club from 1994 until shortly before his arrest last October, is charged with grand theft. He posted a bond of $35,003 and is awaiting trial, set for March 22.

Investigators said in their arrest report Dietz confessed to embezzling the money, which was allegedly taken between 1998 and 2001.

At the time of Dietz's arrest, investigators put the total amount taken at $999,473. The lawsuit says the country club has suffered damages totaling about $5 million. The suit contends Deloitte & Touche should be held responsible for the $200,000 it collected in fees over the period of the theft, as well as the $200,000 it cost to research and discover the embezzlement and $3.5 million in lost revenue.

"We're in the process of determining those losses and we believe those losses will be substantial," said Greg Anderson, the club's attorney.

The suit accuses Deloitte & Touche and Beyer of accountant malpractice and breach of fiduciary duty. It alleges that Deloitte & Touche "failed to advise SJCC of problems with its internal controls which allowed Dietz to engage in his theft," and that its audits were not in accordance with generally accepted auditing standards.

Deloitte & Touche did not respond to requests for comment on the lawsuit.

[e-mail] / 396-3502



© 2004 American City Business Journals Inc.

http://jacksonville.bizjournals.com/jacksonville/stories/2004/02/16/story5.html