Waste Management's Fraudulent Accounting

Waste Management Inc. is an american waste management and environmental company based in Houston Texas. First founded in 1968 when the likes of Larry Beck, Wayne Huizenga, and Dean Buntrock began purchasing smaller garbage collection services to dominate the industry. Waste Management went public in 1971. Currently Waste Management provides collection, transfer, landfill, waste-to-energy and, recycling services to over 20 million residential households and an additional 2 million corporate customers in the lower 48 states, Canada, and Puerto Rico (Waste Management). As of 2015 they employed roughly 43 000 people in these regions. This past year Waste Management has recorded $12.6 billion in annual revenue, a number which has just slightly dropped over the past 5 years. Last year Waste Management posted a net income $753 million which has also been somewhat consistent over the same time period (although …show more content…
Those involved were charged with making false and misleading statements about their accounting practices and financial condition in reports to shareholders and press releases, destroying certain pieces of evidence and using illegal accounting manipulations. After each year of fraudulent accounting, the following years manipulations were based on inflated numbers in years previous. As a result earnings fraudulently achieved in one period had to be reported in the next in order for the scheme to continue. Doing this allowed the scheme to continue for a prolonged period of time and acted as an attempt to cover up fraud committed in previous years. One of the practices used to cover up the scheme is known as netting. Those charged used netting to eliminate approximately $490 million in current year expenses and accounting misstatements made during previous years of fraudulent accounting. This was done by offsetting the expenses against gains on the sale of unrelated assets (Newkirk,