The Trial Balance is CFO.com’s weekly preview of stories, stats and events to help you prepare.
Part 1 — The former finance chief of a real estate company faces federal charges in a California court.
A real estate fund manager’s former CFO is among three executives charged with running a “Ponzi-like” scheme.
The Securities and Exchange Commission last week announced fraud charges against real estate firm Voyager Pacific Capital Management and three high-ranking employees there: CEO Roger David Hardcastle, former CFO John Giarmarco and former COO Vanessa Lung-Medlock.
In a complaint filed April 20, the SEC said the trio used $15 million from new equity investors to pay existing equity investors in a “Ponzi-like fashion.” The complaint, filed in the U.S. District Court for the Eastern District of California, said these payments were necessary, “in part, because Hardcastle and Giarmarco had taken millions of dollars of investor money from the real-estate investment fund and given that money to entities that they controlled in a series of undisclosed and prohibited transactions.”
“In total, millions of dollars of equity investor funds were not invested as promised, resulting in losses to the fund, and ultimately its investors,” the complaint stated.
The SEC’s suit noted that such payments were not permitted by the real estate fund’s offering documents. They also were not disclosed to investors, according to the complaint.
In a bid to hide their actions, the suit said, the three executives changed the fund’s accounting practices and “created fraudulent, backdated purchase agreements to make it appear the Fund had more income than it did.”
Hardcastle and Giarmarco purchased Voyager Pacific in July 2020. The firm was founded in Miami, though most of the actions detailed in the case were alleged to have taken place in California, per the complaint.
The SEC’s complaint charged the company and the three executives with alleged actions taken between September 2020 and March 2024.
In a news release issued April 21, the SEC said that Hardcastle and Giarmarco have entered into “bifurcated settlements” in relation to the civil case, while Hardcastle has pleaded guilty in a parallel criminal proceeding brought by the Department of Justice. The language of Giarmarco’s settlement said that he neither admits nor denies the allegations set forth in the SEC’s suit.
Under the terms of the settlement, the court can decide “whether it is appropriate to order disgorgement of ill-gotten gains and/or a civil penalty.”
An SEC spokesperson in an email to CFO.com declined to comment on the case beyond the commission’s public filings.
An email sent to an email address listed on Voyager Pacific’s site returned a bounce-back message, while a call to a number posted there resulted in an automatic message saying the “called party is temporarily unavailable.”
Part 2 — This week
Here’s a list of important market events slated for the week ahead.
Monday, April 27 — None scheduled.
Tuesday, April 28
- S&P Case-Shiller home price index, Feb.
- Consumer confidence, April
Wednesday, April 29
- Durable-goods orders, March
- Housing starts, Feb. delayed report
- Building permits, Feb. delayed report
- Advanced U.S. trade balance in goods, March
- Advanced retail inventories, March
- Advanced wholesale inventories, March
- FOMC interest-rate decision
Thursday, April 30
- Initial jobless claims
- Employment cost index, Q1
- GDP, Q1
- Personal income, March
- Personal spending, March
- PCE index, March
- Core PCE index, March
- Chicago Business Barometer (PMI), April
- U.S. leading economic indicators, Feb.
Friday, May 1 — None scheduled.
Part 3 — Quote of the week
“I’d be skeptical of any AI tool for finance that can’t tell you its error rate. Not because the vendors are being dishonest, but because most of them genuinely haven’t tested it this way.”
Woosung Chun
CFO, DualEntry
In an opinion piece for CFO.com, DualEntry’s finance chief, Woosung Chun, discussed how even the best AI models get one in five accounting tasks wrong. Chun shares how he and his team tested 19 AI models on 101 accounting tasks to evaluate their accuracy and efficiency. He explains that vendors tend to show CFOs demos and outputs that look correct, “but they don’t show you task-level failure rates across a representative sample of real workflows.”
