Waste Management, Inc. is the nation's largest waste collector (Feder). In other words, they collect and recycle garbage. They are a known brand and dominate the regions of the country and Canada where they provide services. Grownups and kids alike see their trucks and think, "Garbage". Which could sound awful, but garbage is lucrative.

In the early 1990's, Waste Management, instead of just picking up the garbage, provided garbage to their investors in the form of an accounting scandal which cost investors approximately $6 billion (Bloomberg News) and was described by Thomas C. Newkirk, associate director of the SEC's Division of Enforcement as "one of the most egregious accounting frauds we have seen" (SEC). What Mr. Newkirk is describing is a long-standing policy by those at the top of the executive rung at Waste Management to provide their auditors, auditing committee, and the public false and misleading numbers in a variety of ways.

First, these highest level executives would set earnings targets without regard to current or recent past results. They would then manipulate the numbers to match the previously set targets. Why? They wished to show tremendous growth in their business which would enrich them personally as they kept their jobs regardless of actual results. They also reaped the benefit of higher bonuses and increased income as they sold off their personal shares of the company at market prices which did not reflect the actual company results. It would be akin to owning a baseball team, setting a goal for wins in a season, and then cheating the opposition to assure that your predictions came true.

One area where these executives committed their fraud was in depreciation. They would routinely avoid depreciating the value of their garbage trucks and inflate the salvage value of the trucks while extending their useful lives beyond common