write a response to the following post the origonal propmt is in italic for contex 

Finding another article about a real-life fraud case similar to Rita Crundwell was not a difficult task. Two employees at FTE Networks, Inc., a publicly traded company in the telecommunications industry, were recently involved in a high profile fraudulent case in 2021. Michael Palleschi, the ex-CEO and David Lethem, the ex-CFO were charged by federal prosecutors and sued by the SEC for fraud. Palleschi and Lethem were accused of fraudulently hiding FTE Networks financial condition from 2016-2019 (Mangan, 2021). They caused FTE to recognize over $13 million in fraudulent revenue (The United States Department of Justice, 2021). They were also accused of embezzling millions of dollars for personal luxuries like private jets, luxury cars, personal credit cards, wire transfers, stock issuances, and unauthorized salary increases (Mangan, 2021). The two men also doctored and forged numerous documents and signatures, provided fake copies of documents like notes to FTEs accounting personnel who in turn improperly accounted for Notes as conventional promissory notes. (SEC, 2021). It wasnt until an FTE employee told FTEs only independent director the truth of FTEs finances that an internal investigation was conducted and led to the unraveling of Palleschi and Lethems scheming (SEC, 2021).

Palleschi and Lethems case was similar to Crundwells in the sense of conducting fraudulent schemes for personal gain. However, not that it should be applauded but Crundwell was able to do this for over two decades while Palleschi and Lethem were only able to do this for 3 years. In order to avoid situations like these, organizations must have a separation of duties. One person should have been approving invoices while another was authorizing the payments. This helps to an organization avoid unauthorized purchases and payments. Palleschi and Lethem were a slightly harder duo to combat because both had different duties and worked together to make their fraudulent schemes work. Corrective internal controls like physically tracking the assets could have helped to reveal well-hidden discrepancies. When you have upper management like the CEO and CFO involved in fraudulent schemes, it becomes hard to restrict employee access to financial systems, increasing oversight and allocating separate accounting responsibilities. However, it is not impossible. More should have been done to strengthen internal accounting controls.

 

References

Mangan, D. (2021, July 15). Former executives of FTE networks charged with securities fraud and Asset Swindle, sued by Sec. CNBC. https://www.cnbc.com/2021/07/15/fte-networks-executives-charged-with-securities-fraud-conspiracy.html

SEC. (2021, July 15). Complaint: Michael Palleschi and David Lethem – sec.gov. SEC. https://www.sec.gov/litigation/complaints/2021/comp-pr2021-127.pdf

The United States Department of Justice (2021, July 15). Former CEO and CFO of Public Telecommunications Company charged in Manhattan Federal Court with scheme to defraud investors. The United States Department of Justice. https://www.justice.gov/usao-sdny/pr/former-ceo-and-cfo-public-telecommunications-company-charged-manhattan-federal-court