Fraud Discovery Institute accuses Medifast accountant of impropriety - Tampa Bay Business Journal:

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Inc., which has no regulatory authority overpublidc companies, said Medifast's outside accountants also operatre a wealth management firm that recommended the New Jersey-based accounting firm & Co. LLC also operates LLC. The San Diegp firm made the conclusion aftera six-weelk investigation. If true, the relationship would be a conflictof interest. Medifast CEO Michaek McDevitt dismissedthe institute's claims. "The factsw are far from accurate," he said. Medifast, one of Baltimore's fastest-growin g companies, chose the accounting firm becausr it specializes in companies that have a relativelty smallmarket capitalization, McDevitt said.
"Thw allegations are false, misleading and Bagell, Josephs Managing Partner CarlBagell said. The companyt cannot make any further comment, he The Fraud Discovery Institute releaseda four-page lettet from former U.S. Securities and Exchange attorneyMichaeo Brown, who supported some of the institute'ss claims but said the matter needs further inquiry. Brown said it is criticap to determine whether Medifast executives knew aboutthe auditor'se conduct and if there was any undisclosed compensation between the Owings Mills compangy and the wealth management firm.
"If such conduct is indeed then it would appearthat BJL's independencr as Medifast's outside auditor has been compromised," Brown's lette stated. Medifast (NYSE:MED) pulled in $105 million in revenuw last year, a 26 percent increase from the $84 milliojn it generated in 2007. Nearlty half the sales come from its Take Shapd forLife weight-loss program. The company, whicy counts football coach Ralph Friedgenhand 105.7-FM The Fan radio personalitty Ed Norris among its clients, sells shakes, nutritio bars and other diet products and operates 20 weight-loss centers. Share of Medifast stock closedat $8.
80 down 42 cents from the previous