SEC Charges Florida Based CPA For Bogus Audit Opinions


SEC Charges CPA With Fraud

On September 17, 2015 the SEC imposed sanctions against a Florida based CPA for producing deficient and fraudulent audits and quarterly reviews for eight publicly traded companies, issuing false and misleading audit opinions on the companies’ annual financial statements.

Terry L. Johnson, of Casselberry, Florida, agreed to settle the SEC charges on fraud and will be suspended from practicing as an accountant on behalf of any publicly traded company or other entity regulated by the SEC.

During the investigation, the Commission discovered that following his release from prison, convicted felon and former certified public accountant Stephen P. Corso, of Encinitas, California, served as the Chief Financial Officer of several publicly-traded companies, including Primco Management, Inc., one of Johnson’s audit clients.  Corso signed Primco’s annual and quarterly financial reports and certifications filed with the SEC using the alias names “Steven J. Corso” or “Steven John Corso”. Corso was barred in 2009 from appearing and practicing before the SEC as an accountant due to his felony conviction for wire fraud and attempted tax evasion.  Corso is also alleged to have solicited business on the false pretense that he was an “SEC Consultant and Attorney.” Corso acquired more than $460,000 in illegal profits generated from his violation of the prior SEC order.

Instituting a settled administrative proceeding, according to the SEC charges, Johnson’s numerous audit deficiencies included the failure to properly plan audits, obtain sufficient appropriate audit evidence, and maintain audit documentation. Allegedly, Johnson falsely stated in audit reports that he conducted his audits in accordance with the standards of the Public Company Accounting Oversight Board even though his conduct of the audits violated numerous PCAOB auditing standards.  According to the order, Johnson also created back-dated, phony work papers to create the false appearance of having proper work papers once he learned he was the subject of an SEC investigation.

“Johnson’s audits provided investors with the false impression that his audits of multiple issuers comported with professional auditing standards, when in fact they were so deficient that they amounted to no audits at all,” said Michael Maloney, Chief Accountant of the SEC’s Enforcement Division. “Today’s order reinforces that we will continue to root out and hold accountable auditors who put investors at risk by their failure to comply with professional auditing standards.”

The SEC found that Johnson engaged in improper professional conduct, willfully violated federal antifraud laws and related SEC rules, and that he violated and willfully aided, abetted, and caused violations of the financial reporting requirements of his public company audit clients.   Johnson consented to an order suspending him from appearing or practicing before the SEC, without admitting or denying the SEC’s findings, and was ordered to disgorge his audit fees of $96,000, plus prejudgment interest, paying a civil money penalty of $50,000.

On August 17, 2015, in a separate proceeding filed in federal court in California, the SEC filed an application seeking a court order directing Corso to comply with the prior SEC order and disgorge his earnings resulting from violating the prior order. Corso, without admitting or denying the SEC’s allegations, agreed to an entry of a court order compelling him to comply with the SEC’s prior suspension order by immediately ceasing to appear or practice before the Commission paying $465,525 in disgorgement, plus $29,938 in prejudgment interest and to remove from the Internet all references to himself as an “SEC Consultant and Attorney.”  The terms of Corso’s agreement are subject to court approval.

For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit   This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.

Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
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Boca Raton, Florida 33432
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