Replies to post #167015 on Plastic2Oil Inc (PTOI)

[ponzi_implosion]

I completely agree. Honor is paramount

Bordynuik also falsely asserted, in management representation letters to its outside auditors, that JBI’s financial statements were prepared in conformity with GAAP

Continuing Problems with JBI’s Independent Auditor

27. Shortly after the filing of the Form 10-Q for the third quarter of 2009 on November 16, 2009, additional issues arose regarding JBI’s auditor at the Gately firm. On November 28, 2009, the auditor was arrested for Violation of Probation, Felony DUI and Possession of Marijuana. The auditor remained in jail in Florida until February 18, 2010. The consultant informed Bordynuik of the auditor’s incarceration but Bordynuik insisted on continuing to use Gately & Associates for JBI’s 10-K audit for the fiscal year ending December 31, 2009. Indeed, Bordynuik even agreed to assist the incarcerated auditor by paying for his criminal representation, an alcohol treatment program and offering him a job as an internal auditor for JBI’s operations in Canada. During a telephone call to the auditor in jail, Bordynuik offered him legal and financial assistance while he was still retained as the principal of JBI’s supposedly independent audit firm, Gately & Associates.

28. Despite these issues, and the dissolving of any notion of “independence” between the auditor and Bordynuik, between the period in which JBI’s 10-Q for the third quarter of 2009 was filed and the 10-K for the year end was filed on March 31, 2010, Bordynuik and JBI persisted in using Gately & Associates as its independent audit firm. Bordynuik later claimed that one of the auditor’s colleagues at the Gately firm stepped in to assist with the audit responsibilities while the auditor was incarcerated or otherwise was unavailable due to his drinking problem. However, there is no indication that anyone from the Gately firm (or otherwise) undertook any review of the final set of consolidated financial statements included in JBI’s Form 10-K filed on March 31, 2010. Nor is there any indication that anyone from the Gately firm (or otherwise) did the type of audit work required of an independent auditor prior to the filing of the 10-K. In fact, no one associated with JBI was able to contact the auditor for the Gately firm for a significant period of time beginning in February 2010 until the 10-K filing on March 31, 2010. Nor did Bordynuik consult with the auditor from the Gately firm, or with his colleague, about the media credit valuation in advance of the two reporting periods in question or before the filing of the 10-K. Nonetheless, a colleague of the Gately auditor ultimately cut and pasted the electronic signature of Gately & Associates on an audit opinion letter attached to JBI’s Form 10-K filing representing that an independent audit had been conducted when one had not.

29. Bordynuik, as CEO, then approved and certified JBI’s financial statements contained in its year end Form 10-K filed on March 31, 2010 that included the erroneous and inflated value of the media credits. Bordynuik also falsely asserted, in management representation letters to its outside auditors, that JBI’s financial statements were prepared in conformity with GAAP. In addition, Gately & Associates issued an unqualified opinion on JBI’s December 31, 2009 financial statements which, in effect, represented that the financial statements were free of material misstatements and were represented fairly in accordance with GAAP.