A tentative $50 million settlement against Wachovia Bank and an accounting firm, both of which fueled LeNature's Inc.'s $856 million fraud, offers a stark tutorial in dubious lending that creates fiscal monstrosities.
And yet despite LeNature's lessons, the monsters live. Witness Solyndra, the solar-panel manufacturer that pocketed $535 million in government loan guarantees -- then proceeded to go bankrupt.
In the LeNature's case, creditors of the bankrupt beverage company in Latrobe sued Wachovia and BDO Seidman, LeNature's auditors, alleging both turned a blind eye to clear signs that company officials had grossly cooked their books.
The scandal touched off a federal probe that has led to the convictions of five former company execs and a business associate. CEO Gregory Podlucky was sentenced this week to 20 years in prison.
It cost $30 million alone in legal and professional fees just to unravel this mess. Claims against other LeNature's "enablers" are pending.
The duplicity that so permeated LeNature's wouldn't have reached this scale if lenders and accountants had peeked behind the shabby curtain of a crook and a charlatan.
The lessons couldn't be more clear. But when will they ever be learned?
