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Returning to my favorite subject of late, the twisted back alleys where you go in search of stories about people outside the law, I really don’t have to go far into the alley to find them. I discovered this in 2004, when there was an outburst of crime in the last place you’d expect to find it, the hallowed halls of…oh, well, in the school system of one of our choicest suburbs. I’m referring to Roslyn, of course. No one on Long Island has forgotten it yet, but that doesn’t mean that everyone out here has been deterred from crime by the exposure of the North Shore league of notorious gentlemen.
It almost seems as if people are unable to read the facts of these cases as the newspapers present them. You just can’t do things like misappropriating $11,000,000 in school funds without leaving a paper trail behind. There have to be entries in books, on computers, deposit tickets, withdrawal slips spreadsheets, balance sheets, etc., etc., it never ends. You’re leaving footprints on the sands of time and someday someone’s going to come and look at those footprints. And of course you won’t have buried the money you took, you’ll have invested it in fancy cars, expensive houses, good clothes, jewelry, vacations, girl friends, or boy friends as the case may be, and all these things will be evidence against you when the day of reckoning comes. White collar crime is a mug’s game, as the English say, or one for suckers, as we say. But still it goes on.
I look in the recent newspapers and what do I see:
A. Morgan information tech specialist stole data about the firm’s clients. He made things easier for the investigators by exchanging e-mails about the scheme with a co-conspirator.
B. Right under that item is a short note about a hedge fund manager in Idaho who ran a fraud that cost his investors $88 million.
C. On a lighter note, in a case involving no money, thirteen New York City fire chiefs are accused of advancing their careers by claiming degrees from a St. Regis University, which were obtained by submitting an essay and $550. Location of the university? Somewhere, but nobody knows where in…Liberia. Lib-eer-ia?? Come on.
D. Newsday, the Long Island paper, reveals that in 2005, the last year for which figures are available, local lawyers stole $3.2 million from 79 clients. The Fund for Client Protection paid this back to the victims, which is some consolation, but doesn’t change the fact that this was about 40% of thefts by lawyers statewide, committed by a legal cohort that is only 13% of the state legal establishment. In other words, Long Island clients need to be on their guard.
Getting away from the subject of white collar crime for a moment, let me explore the claim made in The Godfather that a lawyer with a briefcase can steal more than two men with guns. Fortuitously Newsday today has a breakdown story on bank robberies, which increased out here by 40% in 2006. Reading it, I would say that the lawyers win going away. The banks are very bashful about revealing their losses to the robbers, but they certainly can’t amount to the $3 million credited to the lawyers. The FBI reports the average amount gotten in banks in 2005 was $4,169, and even with adjusting for a higher figure in New York, the big-money state, the total loot doesn’t approach seven figures.
As far as the risk of apprehension goes, I calculate it as roughly the same for white collar and strong-arm crime. This doesn’t contradict what I said above about the usefulness of the paper trail in tracking down white-collar criminals. The bank robbers and check passers used to have the advantage of anonymity over these people when it came to the job of finding them. They almost had to be as famous and familiar as John Dillinger or Willy Sutton before they were likely to be recognized attempting to loot a bank.
That has all changed with the introduction of closed circuit cameras into bank branches for the purpose of photographing the customers as they come to the teller windows. Systems like this are what enables Newsday to illustrate its bank robbery story with pictures of the robbers in the act. Pictures make apprehension a foregone conclusion. I know. I used to take them. I controlled an array of 150 cameras in sixteen bank branches, which enabled me to keep a record of each and every check artist and stickup man who tried his luck in my bank. By close supervision and constant checking I made sure the cameras were focused correctly and capable of delivering a useful picture in every case. The rest was just a matter of time. If I distributed enough copies of the pictures among the city’s banks, the thief was bound to be recognized in one of his future attempts and have his career interrupted. It was absorbing work.
Having explained the difference in the ways white-collar criminals are tracked down as opposed to those used to trip up other types, I’ll return to my extract of stories appearing in typical current issues of local newspapers to help explain why, in spite of the odds favoring the law, I still feel the thievery tide is rising and the flood is rushing in.
AA. Morgan Stanley wasn’t the only company victimized by theft of trade secrets. The American company with the most secrets to hide is Coca-Cola, which has been guarding its precious secret formula for a century or more. But a secretary there almost broke the code and took off with her information to Pepsi-Cola, which turned her in -- without looking at her material, of course.
BB. More on fire chiefs. The ones on Long Island are unpaid volunteers, unlike the professionals in New York, but a grand jury seems to think they’ve been cashing in on their jobs anyway. In one town out here, Selden, they’re accused of falsifying expenses for limousines to airports (they fly out to lots and lots of meetings, seminars, workshops, etc.). They also don’t have receipts for expenses to be reimbursed, they spend food money on alcohol, an ineligible expense, they exceed recommended federal per diem guidelines by 400% or so, and they tip in amounts 95% higher than the guidelines allow.
CC. Long Island is home to thousands of business executives, whose fame is in most cases confined to the business press and not known to their neighbors. It’s unfortunate that the way in which most of them seem to become known outside their employment is when they appear before a judge in yet another case of cooking the books to improve the company’s bottom line and keep the stock price elevated. The last clipping I have is about two of these men, a senior vice president of corporate finance and a vice president for global sales of a Fortune 500 company being sentenced to probation because of their cooperation in pleading guilty to fraud and exposing the guilt of others in the investigation of the company. They are known now. | |