Macro Economics

This paper will examine several companies and cases charged against them for fraudulent activities. Each company’s work ethics and financial integrity is analyzed as outlined in the text referred to at the end of the document.

American Samoa Garment Factory - Venus Hardy

Pipes flailing in the thick, moist air, mixed with the smell of human flesh struck by hollow tubes. The sounds of workers screaming drowned out the machine noises and scattering about, blood spattered everywhere, on the worktables, sewing machines, and clothing. Watch in awe as the next person was struck in the face with a broken piece of pipe. Their left eyeball rolled across the floor, another person, hit, teeth shattered and each person leans over and prays that he or she is not next.

“Guards at the garment factory were armed with plastic pipes. A fence encircled the compound with razor wire on some parts. A curfew was in place. Workers were malnourished, and some seamstresses stopped having menstrual cycles.” (http://www.seattlepi.nwsource.com 2005 retrieved February 15, 2008) “The women unknowingly participated in a $7 billion to $10 billion global industry of murky migration, forced labor and debt bondage.” (http://www.seattlepi.nwsource.com 2003 retrieved February 15, 2008) The concentration-like quarters crammed 36 people to a poorly ventilated, humid hallway lined by tiny bunk beds with half-inch mattresses. Bath facilities offered no privacy and broken toilets and the swimming pool was not filled with water, but garbage and rancid putrid green slime. (www.hawaiireporter.com 2002 retrieved February 15, 2008)

These are just some of the working conditions in the America Samoa Garment Factory owned by Kil Soo Lee. This factory was one of the main production companies that manufactured clothing for retailers such as Target, Sears and JC Penny’s. The Vietnamese workers had to pay $8,000 to the Vietnamese Government Labor Export Offices for the opportunity and papers to work at Lee's factory.

Lee displayed no signs of empathy for his workers nor did he attempt in any way to alleviate the hazards working conditions that he provided to his employees.

In exchange for their testimony at the trial held in Hawaii, the workers received special "T" Visas from the U.S. government. Those Visas enable human trafficking victims to reside in the United States. This was the largest human trafficking case prosecuted in the United States.

Southern Waters - Tameka Joseph

Southern Water, a water irrigation company that supplies products for various applications supply and install larger irrigation products, system designs and training, located in Bomaderry, NSW (England) failed to realize the importance of protecting the environment with their product and services. “Environmental protection is one of the most important, and costly, issues facing business and society today” (Cheeseman, 2004) “In the 1970s, the federal government began enacting statutes to protect our nation’s air and water from pollution. Federal legislation was also enacted to regulate hazardous wastes and to protect wildlife… These laws provide both civil and criminal penalties” (Cheeseman, 2004). Southern Water was a victim to this law.

Southern Water caused sewage pollution and the death of many fish by a temporary power failure. The power failure caused sewage treatment works out of action, which caused the pumps to stop temporarily working, and the inlet gate closed. Once power was restored the gates remained closed causing sewage to pump against the closed gates. The gates remaining closed lead to the backup in the inlet chamber causing the sewage to spill out onto the site. Because Southern Water “failed to use reasonable care, with harm to another party occurring” (Mallor, Barnes, Bowers & Langvardt, Ch. 6) they were found in negligence of this disaster because there should have been some sort of control, which would prevent the pumps from working if, the inlet gate shut. Due to the system, malfunctioning Southern Water had to face the consequences of their actions.

“On July 20, 2006 Southern Water notified the environment agency of a spillage of sewer at the Peel Common Sewage Treatment Works. Southern Water identified and stopped the overflow of sewage from the site. They found that it had flooded to the north and north west of the treatment plan but failed to realize until three hours later that it had entered draining ditches around the site that led directly to the River Alver” (Noden, 2007).

Nalico Equity Corporation вЂ" Sherila Perez

As the result of fiasco of companies like Enron, President Bush signed the Sarbanes-Oxley Act into law. The primary purpose of implementing this new federal law was to ensure that public companies were regulated and held to a set of standards, ensuring that there which require regular reporting of company’s financial reports for varied periods. President Bush signed the law into law in July 2002 (Wikipedia).

Bill Laron Stapleton, part owner of Nalico Equity Corporation, committed fraud by stealing from three U.S. citizens while they worked abroad in Germany. Stapleton, presented himself as a knowledgeable stockbroker as he swindle each of his victims into entrusting him with his or her savings to invest on their behalf. Stapleton provided forged financial statements, assuring the non-existing investment accounts to his clients while only investing a small amount of the money received and depositing the rest in his own personal account (SEC).

At the time of the offense, Stapleton was a retired Army sergeant living in Germany where his three victims also lived, a schoolteacher, an employee of the U.S. Defense department and an Army sergeant. Stapleton stole more than $253K from his three victims. The first indication that something was wrong came when Frederick Smith, a retired U.S. sergeant contacted Stapleton to request a withdrawal from his account to cover medical expenses he incurred due to his illness. Stapleton issued Smith a $6,000 check from his personal account, promising to send more money later. Nothing more was received.

When the Securities and Exchange Commission began investigating Stapleton’s activities, he relocated to Texas. The money he stole from the three victims, David Lawson Jr., Teresa L Kriner and Frederick Smith, remained in his personal account, gaining interest. Stapleton violated at least seven sections of the Securities Act of 1933, which “prohibit deceit, misrepresentations,