Former Wachovia Financial Advisor – Lazaro E. Salado – Pleads guilty to Bank Fraud – what was his motivation?

Since every choice has a consequence – the consequences of Lazaro Salado’s fraud will be significant and impactful.  The prison sentence that he will receive will be life changing and the restitution that follows may be impossible.  But at a deeper level the question might be what motivated his behavior?

Former Wachovia financial advisor, Lazaro E. Salado, 42, of Palmetto Bay, Florida, pled guilty to a Criminal Information charging him with one count of bank fraud for stealing client funds.

According to the Criminal Information, Salado was a financial advisor at Wachovia in Miami, Florida, responsible for assisting clients in investments and financial planning. From February 2004 to May 2009, Salado stole more than $1.45 million from five of his clients at Wachovia by causing checks to be issued on client accounts, without the knowledge or authorization of these clients, for payment to a bank account controlled by Salado. Salado concealed the fraud by providing false and fraudulent statement to clients and also by transferring money between client accounts through unauthorized wire transfers.

As part of the plea agreement announced in court today, Salado agreed to make mandatory restitution of $1,457,309 to Wachovia (now Wells Fargo).

Sentencing is scheduled for September 14, 2011 before U.S. District Judge Marcia G. Cooke. Salado faces a maximum statutory sentence of up to 30 years in prison, a fine of up to $1,000,000, and restitution.

QUESTIONS: 

In any fraud there are three components that come together:  (1) Need; (2) Opportunity and (3) Rationalization.  While it might seem obvious that Salado had a need for money (since that is what he stole) – the bigger question might be – FOR WHAT?  Did his lifestyle reflect the use of the stolen money?  Should have it been noticeable by his co-workers?

He had opportunity through Wachovia – yet the question looms – where did the internal controls fail that allowed Salado to embezzle such large sums of money?  Surely the systems were in place to detect activity like this that took place over 5 years.

Lastly, wonder what was in Salado’s mind that allowed him to rationalize his behavior?

If you know Lazaro Salado and/or have any insight into these or other questions that may arise feel free to comment.

YOUR COMMENTS ARE WELCOME!

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