IRS and California To Crackdown On Options Backdating Together

The IRS has joined with California's local stock options backdating task force to investigate alleged backdating of stock options iwth an intent to defraud.

US Attorney Kevin V. Ryan announced the partnership. He said that the task force was formed in July of this year. It is made of members of the US Attorney's Office, the FBI and IRS-Criminal Investigation in the Northern District of California.

The US Senate has been pressuring law enforcement authorities to face the fraudualent backdating of stock options, which appears to be prevalent despite the Enron scandal.

Ryan said hat it is important to the people of the nation and the financial markets that books and records are honest.

"Falsification or backdating of financial documents may call the integrity of companies' financial statements into question, can constitute fraud on the company, shareholders and the market, and may give rise to tax violations," said Ryan. "We will evaluate the facts of each case, and we will bring criminal charges when appropriate."

Roger L. Wirth, the IRS-Criminal Investigation Special Agent for the investigation said that the IRS is committed to cracking down on options backdating.

"With the recent discoveries of significant fraudulent misconduct in connection with backdating of stock options, IRS-CI will work to help ensure both the companies and executives involved in such illegal activity are in compliance with the tax laws," he stated.

"This task force is another example where by combining our resources together as a law enforcement community, we can have the greatest impact in stopping these criminal activities and hold the perpetrators accountable for their illegal actions."