Energy Storage Company Engages in Fraudulent Revenue Recognition


Fraudulent Revenue Recognition

Just when Enron Corporation is a fading memory, a California-based energy storage and power delivery product manufacturer emerges. And this time, leveraging a similarly fraudulent revenue recognition scheme inflating the company’s financial results.

The manufacturer, Maxwell Technologies, Inc. prematurely recognizes revenue in an attempt to meet and exceed analyst expectations. The fraud scheme involves the sale of ultracapacitors. The ultracapacitors, a staple company product, represent a range of small energy storage and power delivery products.

Secretive Side Deals

A former corporate officer and sales executive, Mr. Van Andrews, inflates the company’s revenues by engaging in clandestine side deals with clients. Not only that, Andrews goes to great lengths to falsify the records. In the end, he successfully masks the scheme from the accounting and finance departments, as well as independent auditors. Additionally, and shockingly, Maxwell Technologies’ former CEO David Schramm and former controller James DeWitt are complicit in the scheme. Ultimately, the Maxwell Technologies executives failed to act on the “red flags” leading to the misconduct.

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Peter Moreno
From the concrete jungle of Wall Street as an Investment Adviser to the narco-infested jungles of Colombia, as a U.S. Marine Corps Lieutenant Colonel. His first hand knowledge of both finance and crime present a unique perspective on the topic of financial crimes. Although he may not be the "most interesting man alive," his friends assure him he's in the top 10. He delivers provocative written insights on controversial topics, sips single malt scotch with a smile, and fancies a good cigar.