Fraud Scheme Exposed

DMV Employee Jailed for Peddling Drivers Licenses
Charged $500 a pop to unqualified drivers

California Attorney General and Democratic gubernatorial candidate Jerry Brown has secured jail terms for a former DMV employee and two associates for "jeopardizing the safety of thousands" by running a scam in which unlicensed drivers paid up to $500 to acquire a phony driver's license without taking a DMV driving test.

"This trio of characters allowed wannabe drivers to acquire a California driver's license without passing a single driving test," Brown said, "thereby jeopardizing the safety of thousands of Californians by putting ill-prepared drivers on our roads and highways."

Former DMV employee Rodney Wheatly, 46, of Fairfield and his two co-conspirators, Donald McGowan, 55, and Maricar Bazemore, 37, both of Vacaville, all entered no contest pleas to a single felony charge of unlawful access to a computer system (PC 502(c)).

Wheatly was sentenced to one year in Sacramento County Jail, and the other two defendants were sentenced to six months. Their prosecution was handled by Brown's office following a DMV undercover investigation. Investigators believe the trio issued about 20 fraudulent driver's licenses, but they were unable to confirm a precise number.

The investigation was initiated in late 2009 after a concerned citizen called DMV's Office of Internal Affairs to report a scheme involving the illegal sale of California driver licenses at a Napa DMV field office.

DMV investigators set up an undercover operation in which one of the agents posed as an unlicensed driver with a record of failed driving test attempts. The agent made initial contact with Bazemore over the phone and claimed to be a friend of a friend with an interest in purchasing a license. Bazemore agreed to meet the agent at a Taco Bell in Vacaville, adjacent to the senior citizens' home where she worked, and told the agent to bring $500 for the license.

At the Taco Bell, the agent and another undercover investigator posing as her boyfriend met with Bazemore and McGowan, who was introduced as the best friend of Wheatly, the DMV employee. Bazemore and McGowan instructed the undercover agents to drive to the Napa DMV field office where Wheatly would process the driver's license.

Before entering the Napa DMV field office, the agent paid McGowan $300. Inside, Bazemore instructed the agent to complete an application for a driver's license and directed her to Wheatly's window where she was told her driver's license would be mailed to her.

Upon leaving, the agent requested that Bazemore and McGowan provide her with a temporary driver's license before she paid them the remaining $200. They agreed, and the exchange was made the following week at the same Taco Bell in Vacaville.

Scanty List of Auditors Disciplined in the Years Since Enron Inspired New Rules for Accounting (LINK)

Cloaked Disciplinary Hearings for Accounting Auditors

May Break Open to Media, Public

Once hailed as the legislation that was supposed to expose creative-accounting misdoings to the disinfectant powers of daylight, Sarbanes-Oxley (sometimes shortened to "SOX" or "SarbOx"), has had some pretty outstanding holes in it, which have gone relatively unnoticed for almost a decade.

One of the most negligent of those "oversights" is the SarbOx language that--pun intended,--keeps oversight proceedings--proceedings meant to ensure honesty and accuracy in the accounting offices of America's publicly traded corporations--cloaked in secrecy.

However, changes may soon come that would put a public eye on auditors whose conduct is under examination by the congressionally appointed board whose job it is to ferret out wrongdoing on behalf of shareholders and anyone who has an interest in honest accounting.

This from a press release sent to journalists today by the Public Company Accounting Oversight Board:

Under current law, firms and auditors litigating with the PCAOB have little incentive to consent to public proceedings and can prevent proceedings from becoming public for long after the information would be most relevant to investors, other auditors, and interested parties.

“No other auditor, investor, audit committee, or member of the media is entitled to know what the PCAOB considers to merit discipline, whom it has charged, what issues are being litigated, or whether the PCAOB staff has prevailed or not,” said Acting Chairman [Daniel L.] Goelzer. “The public is in the dark about how the Board uses its enforcement authority until there is a settlement or an SEC decision on the Board’s sanctions.”

PCAOB's Daniel Goelzer has assigned to his staff the task of writing new language to present to congress, which would allow disciplinary hearings to be open to the press and the public without consent of all parties, and without needing extraordinary merit for public scrutiny to be allowed, as is now the case.