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Thursday, March 28, 2024 | Back issues
Courthouse News Service Courthouse News Service

Ex-CPA Accused of Fraud in Boosting Bonuses

ATLANTA (CN) - The former chief accounting officer of home builder Beazer Homes USA understated the company's income by millions to maximize employee bonuses in a multi-year fraudulent earnings scheme, the SEC claims. Michael T. Rand, 47, of Sandy Springs, Ga., fraudulently reduced Beazer's reported net income by recording improper accounting reserves between 2000 and 2005, according to a lawsuit filed in Federal Court.

Rand allegedly did so in an effort to meet or exceed analysts' expectations for the company's diluted earnings per share and to maximize senior employee bonuses.

Rand started reversing the improper reserves in 2006 in order to offset the company's poor financial performance, the SEC says.

In 2006 and 2007, the SEC claims Rand also improperly recognized revenue from the sale and leaseback of model homes on the company's financial statements and hid what he was doing from Beazer's outside auditors.

He allegedly caused the company to understate its income by $63 million from 2000 to 2005, representing about 7 percent of Beazer's actual net income of $955 million for that period.

Rand's further caused Beazer to overstate its income and understate its losses by $47 million during fiscal 2006 and the first two quarters of 2007, representing 20 percent of the company's cumulative actual restated net income of $232 million for the period, the SEC adds.

Causes of action include fraud, reporting, books and records, and internal control provisions of securities laws. The SEC seeks an injunction, disgorgement and a financial penalty. It also wants an order barring Rand from acting as an officer or director of any public issuer.

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