Get real Nerd.
"Committed fraud? That would be an act of a human. The company could be based upon a fraud, but the act itself isn't a possibility."
Parse the words all you want, but the fact remains that the company is being charged with fraud and Monterosso didn't bring this company down on his own.
"The Commission brings this action against GlobeTel Communications Corp. ("GlobeTel" or the "company"). . .for violations that span more than five years and include fraud. . ." The recent charges also show that "new" management has continued to try to conceal this fraud in that the restated 2004 and 2005 financials still contained "materially false and misleading information."
You can also follow the timeline below to see that Globetel hired a firm to conduct their internal investigation only long enough to announce that they were conducting an internal investigation. They didn't need to investigate what they already knew. When Lynch brought up the Centerline revenues in October of 2006, he was dismissed.
Apri 7, 2006 Jimenez retires as CFO.
Apr 10, 2006 Lynch promoted to interim CFO
Oct 7, 2006 Klein and Dumas leave.
Oct 09, 2006 Globetel delisted from AMEX and announces SEC investigation along with its own internal investigation. Globetel hires law firm to conduct the internal investigation. Lynch announced as interim CFO and Monterosso promoted to COO.
Oct 26, 2006 Lynch dismissed. The SEC claims he was terminated because he raised questions about Centerline revenues and profits.
Nov 15, 2006 Globetel states financials to be delayed; because, "The Audit Committee has commenced an investigation and will determine what action, if any, the Company will take. No conclusions have been reached by the Audit Committee to date."
Dec 01, 2006 SEC alleges, "by about December 2006, Globetel had stopped the investigation."
Jan 04, 2007 Company fires Dohan and announces appointment of McKean Paul Chrycy Fletcher & Co. as certified accountant.
Mar 2007 Muntz, Castellano and Heyn resign. DeCarlo resigns as CFO. McKean Paul Chrycy Fletcher & Co. declines appointment as accountant. Globetel no longer has an audit committee or external auditor.
Apr 16, 2007 Globetel announces Weinberg & Co. as accountant.
Apr 27,2007 Monterosso terminated.
May 08, 2007 Globetel announces intent to restate past financials and Centerline revenues.
May 09, 2007 SEC writes ltr to Globetel asking for more details on intent to restate financials.
Jun 19, 2007 Globetel responds to SEC stating it had misapplied a rule and should have reported net verses gross revenue for certain transactions. States Weinberg not engaged and Dohan was again their accountant.
Jun 29, 2007 Globetel files statement releasing more details of Centerline misstated revenues. States matters not discussed with independent auditors."
Sep 12, 2007 Globetel formally announces Dohan as accountant. States that during past fiscal year, "the Company nor any one on behalf of the Company has consulted with Dohan." (three months earlier, Globetel had stated to the SEC that they had elected to engage Dohan and that Dohan was "advised" of its role.)
Oct 5, 2007 Globetel receives Well's Notice.
Nov 7, 2007 Globetel restates 2004 financials.
Dec 5, 2007 Globetel restates 2005 financials.
May 1, 2007 SEC files charges against company and its employees alleging, among other things, that Centerline revenues were based on fictitious/fake invoices (not a misapplied rule), and that its recently released amended financials for 2004 and 2005 were also, "materially false and misleading." Other signs that point to the company's complicacy in the fraud is that revenues were reported for a period of about six months through equipment that wasn't even installed. The company knew that there were no formal contracts with any of the companies that were purportedly involved. No money changed hands. Revenues were available on demand and manipulated for PR value after the end of reporting periods. As early as 2004, Monterosso informed the board that he was using invoices he bought from other businesses, "to to assist in the quarter's revenues. Estimates of revenues provided to the company execs included such tidbits as, "this does not take into account should additional revenue be requested in which case these amounts will definitely change."
Keep in mind that there are other issues outside of the invoices such as the trading in unregistered shares and trading in their own securities that implicate others throughout the company.
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