In 2015, Hamad was a bright, upcoming audit manager in the El NOOR office ofa national public accounting firm. He was an excellent technician and a good \"people person.\" Hamad also was able to bring new business into the firm as the result of his contacts in the rapidly growing Hispanic business community. Hamad was assigned a new client in 2016, ABC smart, Inc., a privately held brokerdealer in the secondary market for U.S. government securities. Neither Hamad nor anyone else in El NOOR office had brokerdealer audit experience. However, Hamad's firm had audit aids for the industry, which Hamad used to get started. Hamad was promoted to partner in 2016. Although this was a great step forward for him (he was a new staff assistant in 1998), Hamad was also under a great deal of pressure. Upon making partner, he was required to contribute capital to the firm. He also thought he must maintain a special image with his firm, with his clients, and within the Hispanic community. To accomplish this, Hamad maintained an impressive wardrobe, bought a BMW and a small speedboat, and traded up to a nicer house. He also entertained freely. Hamad financed much of this higher living with credit cards. He had six American Express and banking cards and ran up a balance of about $40,000. After the audit was completed of 2016 and before the 2017 audit was to begin, Hamad contacted Jack Oakes, the CFO of ABC Securities, with a question. Hamad had noticed an anomaly in the financial statements that he couldn't understand and asked Oakes for an explanation. Oakes's reply was as follows: \"Hamad, the 201 6 financial statements were materially misstated and you guys just blew it. i thought you might realize this and call me, so here's my advice to you. Keep your mouth shut. We'll make up the loss we covered up last year, this year, and nobody will ever know the dwerence. if you blow the whistle on us, your firm will know you screwed up, and your career as the star in the office will be down the tubes. \" Hamad said he'd think about this and get back to Oakes the next day. When Hamad called Oakes, he had decided to go along with him. After all, it would only be a "shift\" of a loss between two adjacent years. XYZ is a private company and no one would be hurt or know the difference. In reality, only he was the person exposed to any harm in this situation, and he had to protect himself, didn't he? When Hamad went to XYZ to plan for the 2017 audit, he asked Oakes how things were going, and Oakes assured him they were fine. He then said to Oakes,' \"Jack, you guys are in the money business, maybe you can give me some advice. I have run up some debts and I need to refinance them. How should I go about it?\" After some discussions, Oakes volunteered a \"plan.\" Oakes would give Hamad a check for $15,000. XYZ would request its bank to put $60,000 in an account in Hamad name and guarantee the loan security on it. Hamad would pay back the $15,000 and have 545,000 of refinancing. Hamad thought the plan was great and obtained Oakes's check for $15,000. During 2017 through 2019, three things happened. First, Hamad incurred more debts and went back to the well at XYZ. By the end of 2019, he had \"borrowed\" a total of $125,000. As part of the discussion, Oakes asked Hamad about the extended audit report but Hamad claims it is a routine report with no additional benefits. Second, the company continued to lose money in various \"off-the-books\" investment schemes. These losses were covered up by falsifying the results of normal operations. Third, the audit team
