Archives for June 2012

MGO Acquires Accounting Firm in San Diego

Sacramento, Calif.-based Macias Gini & O’Connell (MGO) (FY11 net revenue of $30.1 million), an IPA Top 100 firm, acquired Mensch & Associates of San Diego.

Mensch will retain its name and office location but will be co-branded with MGO, which has offices six offices in California and more than 230 staff. Mensch specializes in companies with federal government contracts, and MGO has a niche in municipal and state audit and accounting.

“The combined expertise of our two firms allows us to offer truly unique value to clients,” MGO MP Kevin O’Connell says. “We’ll bring a capability that no other firm can offer – a deep understanding of both sides of the contracting relationship from an accounting standpoint – as well as a greater resource capacity to provide tax and accounting services, not only in southern California but nationwide.”

The transaction was completed June 15, 2012. Mensch’s employees are retained in the deal. A co-branded identity for the Mensch firm will be launched in August.

Weaver Acquires Delong Consulting Services

Fort Worth-based Weaver, (FY11 net revenue of $ 66.4 million) acquired Delong Consulting Services of Colleyville, Texas, on June 1.

Bill Delong, president of Delong Consulting, joins Weaver as a partner. His team of 11 staff will join Weaver’s offices in Dallas and Fort Worth.

BDO Agrees To Pay $50 Million In Tax Shelter Case

Chicago-based BDO USA (FY11 net revenue of $572 million) has agreed to pay $50 million to settle a years-long investigation into abusive tax shelters that generated $6.5 billion in phony losses.

The deferred prosecution agreement, announced in mid-June, includes the filing of a tax fraud conspiracy charge against the firm, but the U.S. Attorney for the Southern District of New York will move to dismiss the charge in December as long as BDO cooperates with the investigations and meets other conditions, Forbes reported. The tax fraud conspiracy charge involves BDO’s false contention that its tax shelters were legitimate investments, false tax returns filed on behalf of wealthy clients and false information filed with the Internal Revenue Service.

Court documents say the firm admitted to receiving $200 million in fees from 1997 to 2003 for developing, marketing and implementing the improper tax shelters. BDO says it has since made “extensive changes in its governance and compliance procedures” to “prevent such conduct from occurring in the future,” Forbes reported.

BDO will pay $34.4 million of the $50 million to the IRS as a civil penalty to settle the tax agency’s investigation. BDO will forfeit the other $15.6 million to the government. BDO’s payments must be completed by April 1, 2018. IRS Commissioner Doug Shulman says the BDO settlement “is another reminder that taxpayers can’t hide behind complicated schemes or corporate tax shelters.”

BDO, formerly BDO Seidman, is recovering from the actions of its former executive Denis Field. Field led a group selling the shelters that was known internally as the “wolf pack,” for its aggressive marketing techniques, the Chicago Tribune reported. Field was found guilty of participating in the fraud last year, but his conviction was overturned last week and a new trial was ordered.

The BDO settlement is part of a larger government crackdown on bankers, lawyers and accountants who helped rich clients evade taxes. KPMG and Deutsche Bank have already agreed to pay large penalties to avoid charges.

Mayer Hoffman McCann Agrees to Pay Penalty

Leawood, Kan.-based Mayer Hoffman McCann (FY11 net revenue of $598 million) has agreed to pay a $300,000 penalty to the California Board of Accountancy for its municipal audits of Bell, where eight former city officials are facing public corruption charges, Accounting Today reported.

In addition to the penalty, the settlement says the firm could pay investigation costs of up to $50,000 and be subject to two years of probation. The firm, which is affiliated with CBIZ, will be allowed to continue to practice in the state of California. “MHM appears to have been a rubberstamp rather than a responsible auditor committed to providing the public with the transparency and accountability that could have prevented the mismanagement of the city’s finances by Bell officials,” State Controller John Chiang said in a statement. Chiang noted that the firm had relied primarily on comparisons to prior-year financial statements, requesting information on variances in excess of $200,000 and 15% from the prior year. MHM president William Hancock said in a statement that the firm has “implemented a wide array of improvement measures in response to the current city and municipal audit environment, including enhancement of our government audit methodology and processes, and additional continuing education programs and training for our professionals.”

Koltin Consulting Group Hires New Managing Director

Koltin Consulting Group of Chicago has hired Nelson Rodriguez, as managing director, and Nathan Knavel as director, in the firm’s executive search practice.

Rodriguez was a managing director with Waveland Executive Search with nearly 20 years of retained executive search experience who has conducted search assignments for both professional services and private equity firms across the U.S. Knavel joins Koltin from Workbridge Associates, a nationwide recruiting firm where he was honored as the firm’s 2010 Rookie of the Year.

“Every firm in the industry wants world-class talent, and the only way to find world-class talent is to conduct a comprehensive search for it,” says Allan Koltin, president and CEO of Koltin Consulting Group and one of IPA’s Most Recommended Consultants.

Gainer, Donnelly & Desroches Founding Partner Leaves Firm

Gainer, Donnelly & Desroches (FY11 net revenue of $20.2 million) of Houston announced that founding partner Rod Desroches will be leaving the firm to pursue a career in industry, as president of U.S. Metals, one of the largest suppliers of alloy pipe, values and fittings in the world. Desroches has been with the firm since 1987, and was made a partner in 1992.

His departure leaves GDD with 10 partners and a staff of more than 140 professionals.

Midwest Firms Sign Merger Deal

Plante Moran (FY11 net revenue of $304 million) and Blackman Kallick, LLP (FY11 net revenue of $52 million) announced today they will merge effective July 1, 2012 to form Chicago’s  leading firm focused on the needs of Midwest middle-market companies.

“When I think about this merger, I can’t help but think about the synergy it creates,” says Plante Moran MP Gordon Krater. “The combination strengthens both firms beyond the market leadership position they currently enjoy and raises the bar to create Chicago’s preeminent accounting, tax, and consulting firm for clients and staff. It’s incredibly exciting.”

“Middle-market companies are a leading indicator of America’s future competitiveness,” Krater says. “Middle-market companies today require a higher level of sophistication and expertise in dealing with the complex issues they face as they expand globally, meet new competitors, grapple with financing alternatives, and plan for succession. Our combination establishes us as a top resource in Chicago focused on this vital middle-market segment.”

Plante Moran and Blackman Kallick have served business leaders throughout the Midwest for nearly 140 years combined. Together, they will employ 2,000 staff members in 22 offices in Illinois, Michigan, and Ohio and three offices internationally. Combined revenue for both firms in 2011 was approximately $375 million.

Steven Schneider, MP for Blackman Kallick, will oversee the newly joined offices in downtown Chicago.

“Through this agreement, we are reinforcing our long-standing and strong commitment to Chicago businesses, our staff, and the community,” Schneider says. “Chicago is poised, at this moment, for incredible growth as well as increased global recognition as an economic engine.  By means of this merger, we are even better positioned to help our clients, both present and future, take advantage of this unique opportunity.”

Jury Awards Wausua, Wis. Company $50 Million in Damages

A jury has awarded a Wausau, Wis., company $50 million in damages in a lawsuit filed against Chicagobased Baker Tilly Virchow Krause. Aqua Finance (FY11 net revenue of $242 million), a consumer lender that finances water-treatment systems, accused its former accounting firm of negligence and breach of contract for failing to immediately disclose problems with its loan loss reserves in 2007. Baker Tilly withheld for one year that the loan losses were improperly calculated and did not meet industry standards, according to court records. Aqua Finance contends the lack of disclosure resulted in huge losses for the company while Baker Tilly blamed the losses on the economy. Bob Chadwell, who founded Aqua Finance in 1986, was quoted in the May 31 Wausau Daily Herald: “This is an opportunity to right a wrong. What happened should not have happened if common sense prevailed.”

Ellis Joins KSM as Chief of Operations and Finance

Jamie Ellis has joined Indianapolis-based Katz, Sapper & Miller (FY11 net revenue of $46.7 million) as chief of operations and finance.

Ellis succeeds William (Bill) Leach, who will be retiring on June 30 after a 34-year career with KSM. Ellis will oversee the finance, human resources, information technology, facilities and general administrative functions of the firm.

Ellis previously served for eight years as CFO and principal at Sparks, Md.-based SC&H Group, a 275-person firm. “With more than 15 years of experience in professional services, Ellis brings a deep knowledge of operational management to KSM. His accounting and operations background is a tremendous asset for our firm,” says MP David Resnick.

BKD Partner, Edward Crumm Dies At age 57

Edward S. Crumm, 57, national industry partner of BKD’s National Manufacturing & Distribution Group in Kansas City, Mo., passed away June 6.

Crumm oversaw more than 180 advisors who serve more than 2,500 manufacturing and distribution clients, as well as the firm’s transaction services team.

Crumm recently had been awarded a position on the board of directors for the National Association of Manufacturers.