...Baltic Journal of Economics ISSN: 1406-099X (Print) 2334-4385 (Online) Journal homepage: http://www.tandfonline.com/loi/rbec20 Explaining and tackling the shadow economy in Estonia, Latvia and Lithuania: a tax morale approach Colin C. Williams & Ioana A. Horodnic To cite this article: Colin C. Williams & Ioana A. Horodnic (2015) Explaining and tackling the shadow economy in Estonia, Latvia and Lithuania: a tax morale approach, Baltic Journal of Economics, 15:2, 81-98, DOI: 10.1080/1406099X.2015.1114714 To link to this article: http://dx.doi.org/10.1080/1406099X.2015.1114714 © 2015 The author(s). Published by Routledge Published online: 12 Nov 2015. Submit your article to this journal Article views: 1004 View related articles View Crossmark data Full Terms & Conditions of access and use can be found at http://www.tandfonline.com/action/journalInformation?journalCode=rbec20 Download by: [95.158.49.18] Date: 20 April 2016, At: 09:43 Baltic Journal of Economics, 2015 Vol. 15, No. 2, 81–98, http://dx.doi.org/10.1080/1406099X.2015.1114714 Explaining and tackling the shadow economy in Estonia, Latvia and Lithuania: a tax morale approach Colin C. Williamsa* a and Ioana A. Horodnicb Management School, University of Sheffield, Sheffield, UK; bFaculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iasi, Iași, Romania Downloaded by [95.158.49.18] at 09:43 20 April 2016 (Received 26 November 2014; accepted...
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...Exit From Crisis And The Post-Crisis Development Of The Baltic States As a result of accessing the European Union (EU) in 2004 the Baltic states benefited from an accession-related boost to income convergence and a credit-driven boom continued. While recognising the rapid growth as well as the increasing level of income, employment opportunities and rising living standarts, it was already in 2006 when the International Monetary Fund expressed concerns about overheating of economies of the Baltic states1. When the global financial crisis or “the four horsemen of financial crises: “sudden stops” in capital inflows, asset price collapses, recessions and fiscal deficits”2 hit, the Baltic states were no exception. There are different views about the exit strategy from the financial crisis of the Baltic states. Defenders point to recent rapid growth. One can look at the GDP annual growth rates for years 2006-2014 for the Baltic states - the GDP decreased rapidly during crisis, reaching its lowest point in 2009 for all three Baltic states. After 2009 the GDP annual growth rates increased, howerver, at the end of 2012, GDP of, e.g., Latvia was still below its pre-crisis level; Lithuania and Estonia had done better. Taking a look also at the GNI annual growth rates for years 2006-2014 for the Baltic states, the decrease in the GNI rate, e.g., for Latvia continued until 20103, showing that even though the value of goods and services produced in the country increased, less...
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...November 7th, 2012 Adelphia Introduction Founded in 1952 by John Rigas, Adelphia Communications Corporation was a "family" business. John Rigas (father) was the chairman and CEO, Tim Rigas (son) served on the board and was the CFO, and Michael Rigas (son) was EVP and a board member along with James Rigas (son) (USA Today, 2004). Together they owned the majority of Adelphia's stock and occupied the majority of the seats on the board. These two components would be key in the fraud that would ensue. The personal lives of the Rigas’ would be the root cause of their need for cash and the reason behind the fraud they would commit (USA Today, 2004). The Scandal The government described it as ''one of the most extensive financial frauds ever to take place at a public company" (Sorkin, 2004). The Rigas' used company money to construct a private golf course, own several private jets, and purchase multiple several luxury homes. They were able to do this by establishing "complicated cash-management systems to spread money around to various family-owned entities and as a cover for stealing about $100 million for themselves" (AP, 2005). In order to keep investment money flowing in, they would manipulate the books to meet analyst expectations, thus inflating the stock price and at times they would mix Adelphia's funds with their own private funds. Upon realizing the amount of funds that had been taken, Tim Rigas "limited" the amount of money his father could take to $1,000,000 per...
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...talks about the situation Adelphia went through after the governance problem and fraud they had that led them to bankruptcy. Adelphia being a family owned company; by April 2005 they decided to sell out the remaining assets of the company to the one of the other 3 big cable companies; Time Warner, Comcast and Cablevision; each one of them offered different amount in the bid, nevertheless the company had to analyze how certain each offers were, how probable was any of them to pull out the offers as well as what to do with the money they would get in case the judge let them do the sell. Family Control Adelphia was founded and managed by Rigas family, the case talks about how the company after 1985 decided to go public in order to acquire the capital investment to expand and become one of the biggest cable providers in the country. Nevertheless the Rigas family managed to keep almost full control of the company by keeping special type stocks with decision making power in the board. The company kept being managed by the funding family as well as the family keeping some of the cable assets for themselves in separate private partnerships and continuing to buy properties privately as well as for the company. The case explains how the privately owned assets of the family were managed by already-public Adelphia Corp by some management agreements and with this the expenses of such assets were consolidated with the expenses of Adelphia by some accounting system the company had; however the...
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...implemented to provide greater transparency and accountability. However, the crime has become more sophisticated and complex. Many examples of such crimes involve greed and feelings of entitlement. One such example is Adelphia Communications and the Riga family. In the late 1990s, Adelphia Communications was a major cable operator with over 5 million subscribers. In 2002, the SEC pressed charges against the founders (Rigas family) and accused founder John Rigas of taking $2.3 billion from the company to buy stock and invest in a golf course. Also alleged was for years Rigas and his two sons falsified Adelphia’s earning, costing investors more than $60 billion. John Rigas formed Adelphia Communications in 1952, when he bought a cable franchise in a small town in Pennsylvania. While Adelphia purchased cable systems, the Rigas family acquired their own small cable companies (outside of Adelphia). They did this to diversify their holdings in the event of problems at Adelphia. Rigas filed a number of false statements with the Securities and Exchange Commission (SEC) in which he falsified Adelphia’s subscriber growth and bottom line. Rigas also took out a $2.3 billion loan from company, which he carefully hid from auditors. Rigas used the funds to buy Adelphia stock and luxury homes; he also invested in a $13 million golf course. This...
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...companies millions, even billions of dollars. This is something that happened with the Adelphia Communications Corp. in the early 2000's. John Rigas, founder and former CEO of Adelphia, and his two sons, Timothy and Michael Rigas, along with the former assistant treasurer, Michael Mulcahey, were all arrested for defrauding Adelphia out of millions of dollars. All four of the defendants were charged with conspiracy, bank, securities and wire fraud. Only John Rigas and his and his son Timothy were actually found guilty on 18 out of the 23 charges filed against them and were facing sentences up to 30 years in jail. Michael Rigas was found not guilty on six of the charges, but the jury was undecided on the other 17. As for Mulcahey, he was found not guilty on all 23 charges (Adelphia Founder). "John Rigas is serving 15 years in a federal prison, while his son Timothy is serving a 20 year sentence" (John). Adelphia all started in "1951 when John Rigas paid $72,000 for a movie theater that was no longer being used in Coudersport, Pennsylvania. The next year he spent $300 for a local cable franchise" (Adelphia Timeline). That's all it took for him to start up a company that little did he know at the time that it would become a multi-million dollar corporation. His brother, Gus Rigas, ended up joining in on the franchise in 1954. Once Rigas and his brother teamed up, they renamed the company...
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...allergic to bee stings. He carried medication at all times in case he encountered an angry swarm. Last summer, however, while he was working in his barn, Cowburn was stung twice on the head. He had a heart attack and died on the spot. The news traveled quickly through Coudersport, Pa., the town of 2,600 near the New York border where Cowburn had lived. One of the locals moved by his death was John Rigas, chairman and CEO of Adelphia Communications, the nation's sixth-largest cable television provider, a company with $3.6 billion in annual revenues and headquarters in--of all places--this rural town. Rigas knows about bees. He owns a farm outside town that sells Christmas trees, maple syrup, and honey. Soon after Cowburn's death, there was a knock on the door at his house. It was Rigas' beekeeper. He'd been sent to destroy the offending insects. More from Fortune Secrets of great second bananas Fortune's 50 Most Powerful Women in business 7 founders who wanted their companies back FORTUNE 500 Current Issue Subscribe to Fortune More than just the town's richest man, Rigas was a 76-year-old worth billions. He owned the Buffalo Sabres hockey team. He hobnobbed with Ted Turner. But the silver-haired cable mogul told people in a humble whisper that he was just a small-town guy who loved helping his neighbors. He sent busloads of children to Sabres games. He used Adelphia's corporate jet to fly ailing people to faith healers and cancer treatment centers. Townspeople flocked...
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...depending on the type of people that is leading and managing the organization. Organizations should have guidelines that they use for management to implement to employees so that everyone conducts themselves accordingly to the values, vision and the mission statement set forth by the stakeholders and their needs for that business. This will ensure employees understand the rules and make good ethical decisions for the benefit of the company. Ethical responsibility is the strategic managers’ notion of right and proper business behavior (Pearce, J.A.,II, Robinson, R.B., 2011, p. G2), however in 1952 Adelphia Communication was founded by John Rigas in Coudersport, Pennsylvania, he took his company public in 1986 and built it by acquiring other systems in the 1990’s. The major players that headed up this nine-person board included John Rigas, his three sons and a son-in-law. Adelphia was ranked as the nation’s...
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...company by John Rigas. By the year 1972, the purchased cable network had evolved into Adelphia Communications Corporation. By the late 1990s, Adelphia had acquired Century Communications and eventually became the sixth largest cable company, servicing over 5 million subscribers. Adelphia was a family owned and operated business. Rigas family members were the majority of Adelphia’s board members and controlled a majority of the organizations voting stock. John Rigas held the position of Founder and Chairman, his three sons held key management positions such as, Chief Financial Officer and Executive Vice Presidents. Like several other businesses owned and managed by family members, Adelphia feel victim to poor ethical decision-making, managerial deception, and social irresponsibility. John Rigas was well known for his extremely lavish lifestyle. The Rigas family indulged in things such as several luxury properties, private jets, leisure construction projects, and even majority ownership of a professional league hockey team. The extravagant life style enjoyed by the Rigas family was primarily funded by Adelphia Communication Corporation. Unknown to stockholders and nonfamily related board members, Adelphia had financed over $2 billion in loans to the Rigas family. The Rigas family had started several private business ventures using Adelphia as a partnership , which resulted in the Rigas family gaining millions in personal assets without any personal cost. The Rigas family also...
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...Research John Gilpin 1/20/14 In July of 2004, John and Timothy Rigas (father and son) had been found guilty by a federal jury on two counts of bank fraud, as well as 15 counts of security fraud. John Rigas was the founder of Adelphia communications, and his son Timothy was the chief financial officer. The two of them were found guilty on conspiracy to steal millions of dollars from the company. At one point the Adelphia was founded in 1952 by both John Rigas and his sibling Gus for a mere $300. Adelphia is the Greek word meaning brothers. In 1986 the company is consolidated with other cable properties and the company is then taken public. In 1989 Adelphia Media Services is created to aid in advertising on different fronts. Adelphia Cable Corporation was the largest cable television provider in the nation before it disappeared. Adelphia also had the nice façade of social responsibility by providing educational institutions with cable services at no charge, sponsoring sporting and cultural events, and supporting charities that needed assistance. John and Timothy had very different motives though. In 1991 Adelphia Business Solutions is launched to provide various communications within the business community such as long distance telephone service, high-speed internet, and even voice messaging. In 1994 Adelphia was experiencing rapid acquisition, and by 1998 had over 2 million subscribers for its customer base. John Rigas had built a successful empire from some humble and small beginnings...
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...millennium dawned 14 years ago, we saw an unraveling of numerous fraudulent activities by organizations large and small. One of these organizations that became perpetrators of fraud was Adelphia Communications. During its existence, Adelphia Communications quickly became one of the largest cable companies in the U.S. Adelphia was unique and differed from several other successful corporations at the time, for one special reason: it was family generated. In fact, it became a quintessential example of how a family owned business can grow into a successful publicly traded business. However, the firm family which gave Adelphia Communications its tremendous success, quickly became the cause for its torrential downfall. John and his brother Gus Rigas founded Adelphia Communications in 1972 through the purchase of their first cable company Adelphia Cablevision Inc. in 1952 for $300. In Greek terms, “Adelphia” means brothers; clearly, John and Gus had long-term visions of their company being a family generated organization. Being the founders, the brothers seemed convinced to conduct the business how they wished, no matter what changes were brought to the organization in the future. Adelphia Communications was head quartered in Coudersport, Pennsylvania. It conducted business through the cable television industry with a focus on reaching areas where non-cable reception was weak. For this reason, Adelphia directed its attention to mid-size markets and suburban areas. In the late 80’s...
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...Puerto Rico. Adelphia means "brothers" in Greek. It used to be one of America's largest cable companies. John Rigas established the company and served as CEO and chairman. John's son Tim was CFO, and Tim's brothers, Michael, and James were Vice Presidents. All four were council members, along with John's son-in-law Peter Venetis. The Rigases also had 100% possession of class B super-voting shares, which granted the family majority voting rights. That's how they maintained and controlled the board even after the company went unrestricted. Voting configuration was dysfunctional. That alone triggered big red flags for institutional investors. But nobody paid attention to red flags. (Tobak) The complete lack of independent oversight gave the family carte blanche to cheat the company blind. They used company funds to buy back Adelphia stock and reserve other family enterprises, including a golf course, vacation homes, apartments on the upper east side of Manhattan, corporate jets, a fleet of cars, production of a film by John's daughter, and even ownership of the Buffalo Sabres hockey team. On an earnings conference call, Merrill Lynch analyst Oren Cohen wanted to know how the family could afford to buy back more than a billion dollars of the company's stock. Caught by surprise, CFO Tim couldn't come up with a decent response. Adelphia Communications Corp. founder John Rigas and his son Timothy were sentenced of conspiracy, bank fraud and securities fraud for looting the cable company...
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...Accounting Ethics 2 1. Given the corporate ethical breaches in recent times, assess whether or not you believe that the current business and regulatory environment is more conducive to ethical behavior. The ethical breaches in recent times, Weygandt, Kimel, Kieso( 2012) researched that “financial press open full articles and documents facts about financial scandals at Enron, WorldCom, HealthSouth, AIG, Adelphia Communication and Cable and more. As the scandal came to light people did not play the stock market if they believe that the stock prices were rigged.” Weygandt, Kimel, Kieso (2012) researched that; “the United States government regulators and lawmakers were very concerned that the economy would suffers if investors lost confidence in corporate accounting because of unethical financial reporting. In response, Congress passed the Sarbanes-Oxley it is intent is to reduce unethical corporate behavior and decrease the likelihood of future corporate scandals. As a result of SOX, top management must now certify the accuracy of financial information. In addition, penalties for fraudulent financial activity are much more severe. SOX increased the independence of the outside auditors who review the accuracy of corporate financial statements and increased the oversights role of boards of directors. The effective financial reporting depends on sound ethical behavior...
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...Running head: Forensic accountant 1 Forensic Accountant Tanya Pace Dr. Gina Zaffino Bus 508, Contemporary Business 11/16/2012 Running head: Forensic Accountant 2 Determine the most important five (5) skills that a forensic accountant needs to possess and evaluate the need for each skill. Be sure to include discussion regarding the relationship between the skill and its application to business operations. Although forensic accounting is not a new field, it has become more talked about since cases like Enron came to light. For someone interested in the Forensic Accountant profession they should know that this field can be time consuming, but very rewarding. People who work in this career investigate white collar crimes such as company fraud, fraudulent financial record reporting, and illegal investment schemes. In a recent study by the Federal Bureau of Investigation shows that white collar crimes have cost the United States and estimated 300 billion dollars (DiGabriele 2008). I think five of the skills that a forensic account would need are communication skills, detail oriented, professional and ethical behavior, sound judgment and discretion. Communication skills are vital in any profession. It allows you to convey information for others to receive. The problem with communication is that it can be interpreted differently by other intended parties. As a forensic accountant, communication skills, verbal and non verbal, are important...
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...The Adelphia Communications scandal The Adelphia Communications Scandal Strayer University, Online ACC 100 September 2009 The Adelphia Communications scandal Before I get into the scandal I would like to give a brief history on how the company was founded. In 1952 John J. Rigas started Adelphia with his brother Gus Rigas. The company was based in Coudersport, Pennsylvania. The purpose for starting this company was to employ many future generations of the Rigas family. When John entered the cable communications industry it was fairly new and developing. Unknowingly to him his company would become one of the largest cable television companies in the US approximately 20 years later. On July 1, 1986, the five existing cable companies underwent a re-organization by John Rigas. Clear Cablevision, Inc., Indiana Cablevision, Inc., Western Reserve Cablevision, Inc., and International Cablevision, Inc., The companies combined created Adelphia Communications, expanding their customer base to approximately 200,000 suscribers. In August 1986, Adelphia went public and Mr. Rigas completed the acquisition of three cable systems before the end of the year. By the end of 1989 Adelphia owned cable television systems throughout Florida, Massachusetts, Michigan, New Jersey, Ohio, Pennsylvania, Vermont, and Virginia. By 1992 Adelphia had become the tenth largest television cable systems operator in the country. With all of the growth and profits that Adelphia Communications was generating...
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