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WHEN IN DOUBT, BLAME THE ACCOUNTANTS

February 08, 2006

When the wolves are catching up, the accountants are the first ones thrown off the sled. The owners of "Scores," a strip club in New York, are following an old script.

The strip club gained noteriety (ok, a strip club starts out with noteriety, but it gained more) when it was sued by patrons for some astronomical bills:

One patron sued the club after he got a $28,000 bill and another disputed $129,000 in charges. The most notorious case involved Robert McCormick, former chief executive officer of St. Louis-based Savvis Inc., who said he was charged $241,000 after he had actually run up a tab of about $18,000 in one night.

Meanwhile, Morgenthau said, investigators found "a massive tax evasion scheme by managers and owners of the nightclub." He said the "simple and corrupt" scam involved the payment of money by Scores to dummy companies as business expenses, and the dummy companies paid the personal expenses of [owners Richard] Goldring and [Harvey]Osher.

So whose fault was it? You've already guessed:

Harvey Osher's lawyer, George Weinbaum, said, "My clients have always relied on accounting professionals." Weinbaum, who also represents two of the companies, did not explain what he meant by that.

Maybe he relied on them as good, paying customers?

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