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Smart aug 13 magazine 1.b


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Smart aug 13 magazine 1.b

  1. 1. SMART Holdings USA – Mid-Summer, August , Volume # 9, 2013 A U S T R A L I A N C O R P O R A T I O N T O C H O O S E V E R M O N T F O R U S E X P A N S I O N H Q Safety Appliances Halting The Eye Injury Epidemic: SMART CEO MJ Kipp, thought he was outback-deep when he first heard Rick Sells eye-ear-safety product idea. But when Ricki stopped talking Kipp said, ―What a great idea – let’s bring this to the US. Not an easy task: Rick’s wife’s family has a 12,000-acre 4,400 cattle ranch in West Wyalong, New South Wales, Australia. Rick, a Master Builder, holds the highest construction license awarded by the heavily regulated Aussie Building Trades. Rick and his workmate Jorge Peirra worked the dust-ladden former gold mining bad-lands of West Wyalong and often had eye and ear injuries prompting Jorge to invent Eyemuffs and ―Reptiler‖ as a company was born. The two using standard RZ87+S ANSI Lens for Low, Neutral and Bright Lights and Acoustic Decibel-dampening earmuffs made with a brand new memory plastic with fantastic almost magical properties -- thermoplastic polyester elastomers provide the flexibility of rubbers, the strength of plastics, and the processability of thermoplastics. See “Eyemuffs” Page 2 – SMART Holdings USA A dynamic organization led by Michael Kipp, Mark Renkert Michael Hussey, and Gabrielle Meunierdriving SMART Holdings USA economic Development Engine Creating US Companies and Jobs. SMARTvt created a task force that provides resources, education, training, financing solutions to business startups for approved plans. About Vermont's largest solution provider featuring teams of subject-matter experts with one voice as one firm; Your Issue Eye-on VT Embezzlers …….. Vermont summer…, a global consultancy offering sustainable applications such as Hands-on Engineering, Accounting, Finance, Marketing, New Product Development, Research, Medical Devices and Technology, Pharmaceuticals, Telephony, E-enterprise, IT / IS implementation - service, Merger & Acquisition, LBO, Business Valuation, Forensic Accounting, SEC Compliance, Petrochemical Extraction, Defense Systems, and global manufacturing enterprises. 
 Page 3, Stopping VT Embezzlers Page 5, Eco Dev Chair Speaks Page 7, State’s Shadow Economy Anti-embezzlement Advisor Doug Babcock Rolls Out New Program
  2. 2. 2 SMART Holdings USA Mid-Summer, August , Volume # 9, 2013 ManyofGreatDepressionWorkers The 14.6M Who Lost Jobs Turned To SSDI in Desperation–Could NotRe-enter LaborForce– A Huge National Failing Not To Re-employ LegionsofJobSeekers Peirra, featured in the Youtube Product Video ( and Sells experimented with over a hundred polymer formulations before selecting one patented formula that uses grades of this thermoplastic polyester elastomer that are heat stabilized, flame retardant and blow molding conducive offering colored concentrates, UV protection additives, hydrolysis resistant additives, heat stabilizers and flame retardants. This Renewably Sources Thermoplastic Elastomers has a reduced environmental footprint without compromising performance. The ―Eyemuff‖ formula is ideal for parts requiring excellent flex fatigue and broad use temperature. It resists tearing, flex-cut growth, creep and abrasion. It offers strength and stiffness plus outstanding toughness while resisting hydrocarbons and many other fluids. After several prototypes the pair set out to slow the incredible rate of 800,000 eye injuries per year according to the Centers for Disease Control. Michael Kipp, CPA, functioning as Reptile USA’s CEO said, ―the business plan shows incredible unit sales potential with channel distribution in the DIY, Equipment, Construction, Firearms, Law Enforcement, Landscaping, Mining, Woodworking, Tiling, Mason and Utility Segments,‖ adding, ―one large vendor just place a 8,000 unit order.‖ Clearly we can become to Eye and Ear Safety what Bicycle Helmets have become to today’s cyclist. The evidence is pretty clear – we need to protect our eyes and ears. These products of cost-effective, fashionable, comfortable, and fun. The Center of Disease Control reports: each day more than 2,000 U.S. workers receive some form of medical treatment because of eye injuries sustained at work. More than 800,000 work-related eye injuries occur each year. Last year 300,000 eye injuries were treated in U.S. hospital emergency departments (ED). This was 22.2 cases per 10,000 full-time workers. Of these workers, 80% were men. Compared with women, men had an eye injury rate 4 times higher (32.4 vs. 8.2 cases, respectively, per 10,000 full-time workers). In 70% of cases, the injury was caused by contact with an object or equipment. In 26% of cases, the injury was caused by exposure to harmful substances or environments. Injury sources were: Scrap, waste, debris (34%), Chemicals or chemical products (14%), Person, plants, animals and minerals (9%), Parts and materials (6%), Welding torches (6%) These are unusual characteristics for the Vice President of Finance for one of Vermont’s most successful companies, Northern Power where Sharrow plays a Global pivotal role in expanding Northern Power’s global foot print as a relentless advocate for alternative energy master plans, strategies, growth, job creation and economic development..
  3. 3. 3 SMART Holdings USA Mid-Summer, August , Volume # 9, 2013 SMART Holdings USA is leading the way in Vermont in raising Business Awareness That Embezzlement Does Happen. SMARTvt Anti- embezzlement Guru, Cynus CEO, and Law Enforcement Officer with an MBA Doug Babcock says, "It starts with stewardship, process implementation, methodologies, oversight, and awareness. Babcock's a hardened police officer, expert in interviews and has a uncanny sense for when "the story’s not right." Vermont has had dozens of high profile embezzlers in powerful companies: Dynapower, Mickey Wiles from Ben & Jerry's, Rhino Foods, Number Town and City Offices, People's Bank, and Southern Vermont College CFO, James Beckwith. Babcock says it is happening right now and he and his team at Cygnus / are ready to teach employers how to find it, report it, investigate it, and report it to the police. He says kickbacks, payroll fraud, false reimbursement claims and the use of company credit cards and accounts for personal use are all issues of employee embezzlement that employers are faced with on an all-too-frequent basis. As employees try to become more creative with their schemes for embezzling company money into their own pockets, employers can fight back and put up internal ―road blocks‖ to help deter employees from getting their hands on money that is not theirs. One of the harshest realities about employee embezzlement is that it’s usually conducted by employees who have gained significant levels of trust from their superiors. Embezzlers usually begin by taking small sums of money, and if they realize they have yet to be caught, can continue taking money for many years, equating to significant losses to your company There are many different signs that signal the presence of embezzlement. Sometimes it’s can even be company policies and the roles and responsibilities outlined in employee job descriptions that make it easier for embezzlement to take place. According to the article ―Embezzlement: Everything You Need to Know ― by Stephen Linker, organizational conditions that create an open door for embezzlement to occur include the inadequate segregation of duties, lack of employee training and understanding regarding company policies and the consequences for violating them, high turnoverfrequently acts in ―crisis‖ mode. Aside from the organizational conditions that increase the opportunity for embezzlement, you can also observe changes in employee habits and discrepancies in financial reporting and accounting statements to identify embezzlement. In the article ―Embezzlement Warning Signs―, they state that other key signs that point to the occurrence of embezzlement within the workplace include: Untimely and unorganized financial statements and reports. • Unbalanced accounts, altered check amounts and the occurrence of duplicate payments. • Creation and payments made into false accounts that have matching addresses to that of an employee. • Unexplained losses of company funds. • Missing documents related to account, payments, etc. • Unexplained or unauthorized charges to company accounts. • An employee refuses to take vacation, works long hours. • Alterations in an employee’s lifestyle- high medical bills, divorce, gambling, living beyond means for salary level, etc. • Bank deposits delayed or made on an inconsistent schedule. Embezzlement Prevention and Stewardship There are a number of measures that employers can take to reduce the number of opportunities within the workplace that allow embezzlement to occur- the chance that you can prevent embezzlement altogether is a bit of a stretch. The separation of duties and task rotation are some of the best measures an employer can use to reduce the opportunity for employee embezzlement. When rotating tasks, if an employee is guilty of embezzlement, chances are, they will protest and try to remain in control of any process that involves access to or the handling of money, so that another employee cannot uncover their scheme. When creating job descriptions, outlining employee responsibilities, company codes of conduct and ethics, as well as any other policy governing your workplace, you will want to conduct a risk assessment that identifies vulnerabilities that may expose the company to to embezzlement, pressures or tasks that could motivate an employee to turn to embezzlement, money handling procedures that do not require enough checks throughout the process, compliance with legal guidelines and any other weaknesses that increase the risk of embezzlement. Another way to help detect and prevent embezzlement is through the use of internal reporting systems. Internal
  4. 4. 4 SMART Holdings USA Mid-Summer, August , Volume # 9, 2013 reporting systems allow employees to report any issues of observed misconduct or awareness of financial fraud that is occurring within the organization. Sarbanes-Oxley requires financial firms to have an anonymous reporting system in place, making employees more comfortable when reporting misconduct, since their name isn’t attached to the allegations. Internal hotlines and reporting systems are the number one tool for identifying misconduct within the workplace, as it is usually an employee’s peers who are aware of any forms of misconduct before they make their way up to top level executives. Solutions such as the Cygnus /SMARTvt System make it easy for new cases to be documented and reported through a variety of intake channels. Cygnus /SMARTvt is a customizable solution, designed to meet the unique needs of each individual company and has built in rules to maintain compliance with legal regulations throughout the investigation process. Cygnus /SMARTvt uses alerts and centralized case information, making it easier to manage the investigation process from the time a new misconduct tip is received, through to the reporting stages and conclusion of the investigation. The article ―Embezzlement Prevention and Detection‖ by Vincent Ruocco, LLC, CPA, advises management to conduct the following three steps when establishing policies to make embezzlement difficult for employees to conduct: • Adopt a policy of mandatory vacations and mandatory duty rotations. It is not uncommon for the embezzler to interfere with the customary workflow to effect the embezzlement. However, if your policies require the embezzler to give up control of his/her work, he/she will recognize that the fraudulent scheme might be more easily detected, and thus be detoured from committing the illegal act. • Don’t hire thieves. This means that if you intend to place an individual in a position of trust, you should conduct a background check. The typical background check involves employment and education verifications, reference checks, criminal conviction checks, drug screenings and a credit check. You may need the candidate’s consent prior to conducting some components of your background check, so you should seek the advice of a qualified attorney. • Conduct periodic surprise internal audits. These are most effective after identifying high risk areas and designing procedures to achieve the desired objectives. It is not uncommon for management to engage a qualified CPA to help them plan the audits and perform the procedures. It is important to note that simply knowing that the organization has a policy of conducting surprise internal audits can act as a deterrent to the would-be embezzler. • Constantly remind your team that an Anti-Embezzlement System is invisibly in-place and is constantly monitoring every facet of the companies finances and they may experience instant-audits at at time at work or at home. Use Anti- Embezzlement Labels on Files and in Work Areas. Make it know that Embezzlers Get Caught and Go To Jail. The Cygnus / SMARTvt Program fits the Vermont Business Model and is easily and affordably implemented.
  5. 5. 5 SMART Holdings USA Mid-Summer, August , Volume # 9, 2013 Ehlers believes that Eco-Districts as uniquely positioned to promote Economic Vitality and Environmental Protections: A new urban planning movement, centered on rezoning and infrastructure that supports environmental sustainability is gaining converts across the United States. One of the most recent of these "ecodistricts," as they are called, is being developed in San Francisco, where public-private activism is the key to achieving a successful result. In July 2013 report —Advocates envision ecodistricts as the building blocks of an environmentally conscious city. "The concept is really to use California's sustainability challenge as a public engagement mechanism and focus on the neighborhood scale instead of the citywide scale," says Scott Edmondson, a planner-economist for the San Francisco Planning Department. "If you're trying to reduce environmental impacts and increase efficiencies in things like energy and water use, it's a lot easier to do at a scale larger than a building site but smaller than a city as a whole." Another example: The Portland Sustainability Institute, now renamed EcoDistricts, an organization promoting the planning tool, describes the concept as a neighborhood or district with a broad commitment to accelerate neighborhood-scale sustainability. "Ecodistricts are designed to achieve ambitious sustainability performance goals, guiding district investments and community action," its website states. An ecodistrict is defined by its community; there is no optimal size. Property owners, businesses and residents join together to identify, prioritize and implement sustainable development projects in the district. This might be anything from a network of protected bicycle lanes to the collection and reuse of rainwater to large energy-saving schemes. Districts are already established or in the planning stages in Portland, Seattle, San Francisco, Boston, Vancouver, B.C. and a dozen other cities. Boston is hosting an eco-district "summit" workshop in November. Colchester Vermont – Economic vision coalescing under new Leadership. Former Chair of the Towns Community and Economic Development Council reflects on his tenure. Says Ehlers, "We are small community by regional standards, but large by those of our own state—the third most populous." Colchester's Ehlers says "Environment Protections and Economic Development are not oxymoron. in fact. While we may not be the largest by population, we are unique, however, in that we have 27 miles of shoreline on one of America's most picturesque lakes, Lake Champlain. Says Ehlers, Malletts Bay at the center and mountain vistas to our west and to our east, Colchester's natural resources and close proximity (less than 10 minutes) to Vermont's international airport in Burlington and the interstate system lead us to believe that Colchester and Malletts Bay could be an exciting opportunity for experienced waterfront development professionals to invest and harvest the rewards of a visionary project. Ehlers believes that Eco-Districts as uniquely positioned to promote Economic Vitality and Environmental Protections: A new urban planning movement, centered on rezoning and infrastructure that supports environmental sustainability is gaining converts across the United States. One of the most recent of these "ecodistricts," as they are called, is being developed in San Francisco, where public-private activism is the key to achieving a successful result.‖
  6. 6. 6 SMART Holdings USA Mid-Summer, August , Volume # 9, 2013 Senator Bernie Sanders, in a letter to the City of Colchester in January 2013, wrote, "I commend you for stressing the need to balance economic development and environmental protection." Said Ehlers, "We need to always keep our eyes on the prize - a healthy river runs through a vibrant economy." Colchester is four hours from the Boston Metro market, and an hour-and-a-half to Montreal. Both markets already frequent our largest city, Burlington. Colchester and Burlington are home to several colleges and the University of Vermont and a top-rated Medical Center. Says Ehlers, "This is a unique chance to capitalize on our decades of missed opportunities to develop commercially in harmony with our environmental assets." Colchester is the primary water-related recreation destination—and this without any significant hotel, transient marina, convention centers, shopping or dining offerings. Sailing, boating, fishing, wildlife watching, paddling, and beach-going all occur good numbers without any major hospitality or retail infrastructure. Ehler's wants to capitalize on the innate interest in its community by business. He invites readers to view Colchester's Heritage Project — Ehler has a vision of a network of beautiful waterfront parks, boardwalks, and piers complete with a pedestrian marketplace offering retail shopping, dining, and overnight accommodations complete with a transient marina and signature hotel. A convention center and community boathouse also are a part of our future with an integrated housing and living plans. Colchester’s Mallet’s Bay
  7. 7. 7 SMART Holdings USA Mid-Summer, August , Volume # 9, 2013 "Severe recessions have historically driven jobless Americans into the shadow economy," writes Bernard Baumohl of the Economic Outlook Group. "We suspect the destructive nature of the last downturn and the prolonged weak recovery pushed a record number of people into that murky world of cash transactions." Baumohl cites several unusual trends to make the case for a booming underground economy. First, retail sales since 2009 have been rising at levels typically associated with an unemployment rate of 6 percent or lower. But unemployment has been above 8 percent for most of that time. "Many of those who have left the labor force since the last recession have managed to earn income in the shadow economy," he believes. "Their spending still shows up in the official retail sales and personal consumption data." See for yourself. Take a photo of your car tires. Price the tires new. Post a slightly discounted cash-only-price of your car tires on Craigslist. I tried this experiment and received over 100 telephone calls. The Great Recession has pushed the middle- class hard and millions now delve daily in "The Shadow Economy." That may help explain one troubling trend—a sharp decline in the labor-force participation rate, which measures the percentage of the adult population considered to be either employed or looking for work. The participation rate has dropped from a peak of 67.3 percent in 2001 to 63.5 percent today. The last time it was that low was 1979. Some economists think this reflects a worn-out workforce resigned to long-term decline. But it might show a migration of workers from the official economy to the underground one instead. Another clue to the underground economy comes from government data on the percentage of Americans who forego banking services, finding other ways to handle their money. The percentage of Americans who are "unbanked" or "under banked" rose from 25.8 percent in 2009 to 34.3 percent in 2012. These Americans live in a cash-only world. Vermont’s Shadow Economy: Larger and Scarier Than You’d Think Mostly at twilight Vermont’s homeless leave their illegal encampments to make their way finding either unlocked or discarded items that they trade for goods, services, alcohol or drugs. This reporter makes his way along the Winooski River and Riverside Avenue and finds an encampment with two groups totaling about 30 dwellers. But the Shadow Economy is not just populated by the homeless millions of middle-class Americans need the Shadow Economy to survive. From Craig's List, to Newspaper Classifieds - there are legions of people in the US selling and buying things and avoiding paying taxes on what they buy and sell. The Great Recession has pushed millions of people off the payrolls and into the murky world of Cash Only Merchandise and Services. When your friend’s teenager starts wearing fancy clothes and sports a new I-Phone that they couldn't possibly afford through their part-time job, you start to wonder where the money came from. Some economists are asking the same question about consumers who seem more flush than they ought to be. The answer may lie in the large "underground" economy that doesn't show up in official statistics. There are always some businesses and individuals operating on a cash basis to dodge taxes, evade regulations or conceal illegal activity. Economists now speculate that the underground economy may have swelled during the last few years, given all the people who can't find full- time work at livable-wage.
  8. 8. 8 SMART Holdings USA Mid-Summer, August , Volume # 9, 2013 We tend to think of the underground economy as a place where Mafiosi and other types of criminals operate. But that's more or less a constant. The new underground economy may entail a lot of people doing honest work, such as freelancers and consultants who used to be full-time professionals, computer- repair people laid off from corporate IT departments, home remodelers benefiting from a revived housing sector, people running eBay business, and retirees earning a few extra bucks by running errands for busy parents. The Internet obviously makes it easier to work from home these days, another boon for the gray market. But the Internet also allows people to buy, sell, earn, barter, and leverage, lease, rent, vacation and use resources massively. Data from the IRS shows that total tax receipts from personal income dipped in 2009 and 2010, as would be expected in the aftermath of a tough recession. In 2011, the last year for which data is available, tax receipts rose by about 14 percent, as the economy recovered and more people went back to work. That's a healthy rebound, but some of that may have come, ironically, from government transfer payments, such as extended unemployment insurance, that temporarily boosted some people's income, On the whole, it's hard to tell if tax receipts are depressed as more people underreport their earnings. Economists estimate the size of the underground economy at somewhere between 8 percent and 14 percent of total GPD, which could amount to as much as $2 trillion worth of economic activity. Authorities in California say off-the-books transactions cost the state $6.5 billion in lost tax revenue every year. If the trend is similar throughout the U.S. economy, that would amount to roughly $50 billion in lost tax revenue for all 50 states combined, plus an even bigger chunk that Washington fails to collect. All told, that would be more than enough to completely cover the $85 billion in spending cuts—known as the sequester—that just went into effect. On the other hand, that's a lot of cash consumers end up keeping to spend on cars, appliances, restaurant meals and vacations—almost like a government stimulus program. Here's the rub. There is a lot more physical cash in the economy than there would be during good economic times. Tracking total cash in the market is one way to gauge the Shadow Economy. Currency in Circulation. Another way to measure the underground economy is to look at the growth of currency in circulation, especially large bills such as $100 bills. Since the underground economy operates almost exclusively in cash, unusual increases of cash in circulation are considered a valid indicator of its growth. Figure II shows the growth of $100 bills as a percentage of the value of all outstanding U.S. currency. As one can see, there has been a steady rise for many years. • According to the Treasury Department, $100 bills have risen from less than 20 percent of the value of currency outstanding in 1967 to more than 63 percent in 1997. • in 1997 total currency increased by $31 billion - and $30.2 billion of it was in $100 bills. Economists can calculate the size of the underground economy from currency data by looking at the real increase in currency per capita above some base period. The assumption is that law-abiding citizens will not ordinarily increase their day-to-day need for cash (in inflation-adjusted terms). Hence, any significant increase in cash per capita must be used in the underground economy. On this basis, Professor Edgar Feige of the University of Wisconsin recently put the size of the U.S. underground economy at between $500 billion and $1 trillion in 1993.
  9. 9. 9 SMART Holdings USA Mid-Summer, August , Volume # 9, 2013 A factory worker has a second job driving an unlicensed taxi at night; a plumber fixes a broken water pipe for a client, gets paid in cash but doesn't declare his earnings to the tax collector; a drug dealer brokers a sale with a prospective customer on a street corner. These are all examples of the underground or shadow economy— activities, both legal and illegal, that add up to trillions of dollars a year that take place "off the books," out of the gaze of taxmen and government statisticians. Although crime and shadow economic activities have long been a fact of life—and are now increasing around the world—almost all societies try to control their growth, because of the potentially serious consequences: • A prospering shadow economy makes official statistics (on unemployment, official labor force, income, consumption) unreliable. Policies and programs that are framed on the basis of unreliable statistics may be inappropriate and self- defeating. • The growth of the shadow economy can set off a destructive cycle. Transactions in the shadow economy escape taxation, thus keeping tax revenues lower than they otherwise would be. If the tax base or tax compliance is eroded, governments may respond by raising tax rates—encouraging a further flight into the shadow economy that further worsens the budget constraints on the public sector. (On the other hand, at least two-thirds of the income earned in the shadow economy is immediately spent on the official economy, resulting in a considerable positive stimulus effect on the official economy.) • A growing shadow economy may provide strong incentives to attract domestic and foreign workers away from the official economy. Vermont has a massive Shadow Economy proportionate the enormous drop in the Labor Force. The Craigslist Exercise in Vermont reveals a palpable desperation to sells goods and services. Vermont Junk Yards are thriving at rates never before seen as armies of Scrap Metal Hunters scour garbage bins, roadways, and people's homes seeking bits of metal they sell by the pound and ton. Services, Goods, and Foodbartering in Vermont are also a large part of the Shadow Economy with widespread trading. And Service Personnel will do projects for 20% less if cash is paid. A walk along a the hiking path along the Winooski River on Riverside Avenue discovered large homeless camps stack with scrap metal, bottles, cans, and other items sourced from local neighborhoods. Surprisingly, just off of North Beach between 20 - 35 homeless people living in a tent city outfitted from items found in local residences. All these areas are well known to police and after many forced evictions - new populations spring back. All the literature points toward a vibrant economy will diminish the shadow economy. It is a lot hard to get goods and services reliably and with solid quality in the Shadow Economy. The key is job creation, strengthening the middle class with education, opportunity, and jobs. The risk of not doing so means sliding toward medieval America.