Eliot Spitzer’s Harvard ethics lecture: Too soon for him to speak?

F. Scott Fitzgerald once said there were no second acts in America. He hadn’t met Eliot Spitzer. Recently, the former New York governor was invited to deliver a lecture on ethics at Harvard University’s Edmond J. Safra Foundation Center for Ethics.

Before I get to the ethics of this matter, let me just say: I have no interest in attacking Spitzer. Nor do I hold any personal judgment against the man for the events that forced him from office in March 2008. But I do think if you’re going to speak about ethics, you had better be willing to take a long, hard look at your own actions. Instead, Spitzer stuck to a script: “From Ayn Rand to Ken Feinberg — How Quickly the Paradigm Shifts.”

Yes, I’m sure Spitzer had lots of interesting things to say about policing Wall Street. But can you imagine how much more valuable an ethics talk would have been if he’d answered the question: “How does someone — in this case a savvy prosecutor — fall into the trap of things he once railed against?”

Maybe Spitzer is still trying to figure that out. I can sympathize. Soon after my release from federal prison in the mid-90s, I spoke about ethics before a few rotary clubs. Regardless of what I had to say, my audience had a preset skepticism about whether I had a valid message to offer.

Ten years later, it’s a different story. When I speak at universities, people now understand that enough time has passed for me not to have replicated the poor choices of year’s past. I don’t sweep that past under the rug, either. I am open about the choices I made that led to incarceration. That candor provides the greatest opportunity for learning. Because you can talk about theory all day long. What matters most are lessons you can share on how others can avoid the same mistakes.

So, here’s a question worth asking: What is the appropriate lag time before someone can step out again into the public sphere and talk about ethics? Is it too soon for Spitzer? Does he need to spend a little time in anonymity — five years, ten years? — before he can speak? You tell me.

Prospective employers checking you out on Facebook not ethical? Get over it.

Is it ethical for a company to use what you freely post on a social networking site as part of their decision making process?

I posed that question the other day to a group of students at Queen’s Business School in Kingston, Ontario.  The answers I got were interesting; they generally saw sites like Facebook as just that: a social networking tool. And they didn’t generally connect that a prospective employer has an ethical right to base their hiring decision on what a candidate posts online in their off hours.

But here’s the thing: Regardless of the ethical questions at play, what you post online will likely be found, in one form or another, by prospective employers. A recent study found that 45 percent of employers surveyed use social networks to screen job candidates.

So, here’s a question for all business students: At a time when unemployment is at a 26-year high, and competition for jobs is fiercer than ever, what are you currently doing with Facebook, LinkedIn, and Twitter to expand, find, or grow your career? Are you taking advantage of what’s free in a way that allows you to take those steps?

Queen’s School of Business’ corporate social responsibility weekends lay groundwork for future business leaders

The other week, I asked whether business schools were effectively teaching ethics. That question was answered, at least in part, the other day when I spoke at Queen’s School of Business in Kingston, Ontario. In talking with many of the 200-plus students gathered for the event, I discovered something encouraging: All is not lost on the ethics front.

For the past several years, the university has been holding annual corporate social responsibility weekends. The impetus for these events was the realization, on the part of business faculty leaders, that their department’s educational experience had to go beyond traditional disciplines — accounting, finance, marketing, and management — to encompass a larger concept: Business isn’t just about the production of profit or the satisfaction of shareholders. It’s about contributing to a greater good, which could take a variety of forms: sustainability, environmental protection, and the preservation of human capital, among others.

This year I happened to be the keynote speaker. The faculty wanted students to get a “real life” taste of what can lead a well-educated, intelligent person to make uneducated, unethical choices. And, well, who would know better than someone who landed in federal prison for effecting a Ponzi scheme?

The students were engaging, and open with their questions. They certainly didn’t hold back. Many of them reflected a depth of wanting to understand the ethical implications of business choices. Not just the implications but the triggers that would cause someone to make what, in retrospect, might be considered unethical choices.

All in all, a day well spent. Kudos to Queen’s Business School for bringing the role of corporate social responsibility to the conversation — and keeping that conversation going year after year.

Business ethics: Leadership lessons from the US Navy

More times than not, media reports tell us that government spending is rife with fraud and waste. While those stories deserve attention, it’s easy to lose sight of people in government who really are conscientious stewards of U.S. taxpayers’ money. Rear Admiral Steven J. Romano (right) is one of them. Romano is the commander and chief executive officer for the Navy Exchange Service Command in Virginia Beach, Va. He also overseas Navy Exchange System, or NEX, a Wal-Mart type store for military members. While most NEX associates are honest and trustworthy, there have been a number of fraud cases lately, and Romano is putting a stop to them.

I learned about all this recently when I was invited to speak to a group of U.S. Navy personnel in Norfolk, Va. The invitation came on the heels of a campaign, “Stop Fraud,” that Romano recently announced. I was impressed to learn the campaign is aimed at improving associate awareness and training, expanding process reviews, and using continuous process improvements to mitigate risks. That campaign, and Romano’s leadership in it, speaks volumes to the importance of leading with top down ethics. That’s a fundamental foundation for any organization.

So, here’s a question for you — and you don’t have to be in the Navy to think it over: As a business leader, would your employees say you’re leading with top down ethics? And what actions are you taking to demonstrate that?

Share your comments here.

Brad Stinn Sentenced – Every Choice Has A Consequence – Update by Chuck Gallagher Ethics Speaker

On of the most viewed Blog entries was the one about Brad Stinn and Friedman’s Jewelers.

Pump up those sales! We’ve got to make the quarter! How often are those command heard and how tempting is it to make the wrong choices in order to please the investing public and Wall Street?

Following six weeks of trial – Bradley Stinn, age 47, – former CEO of Freidman’s, Inc. and Crescent Jewelers, found himself being convicted of securities fraud, mail fraud and conspiracy. Likewise, in addition to Stinn’s conviction, the former CFO, Victor Suglia and form Controller, John Mauro have entered guilty pleas into what was a massive accounting fraud.

Having been found guilty, the wheels of justice in the federal system move slowly at times.  Many have wondered just what outcome would befall Brad Stinn  who some hated and others sympathized with.  Well, today the verdict has been handed down.

His sentence:

12 years in federal prison

3 years probation

$4M restitution

He should report sometime in the next 60 days

Speaking from experience, Stinn will be required to serve 85% of his active sentence, which means that he’ll serve 122.4 months – which is a long time!

US Attorney’s New Release:

Bradley Stinn, the former Chief Executive Officer of Friedman’s Inc. and its affiliate, Crescent Jewelers, was sentenced today to 12 years’ imprisonment for securities fraud, mail fraud, and conspiracy. On March 24, 2008, following a six-week trial, a federal jury in Brooklyn convicted Stinn on all counts in the indictment and returned a forfeiture verdict against him in the amount of $1,019,000. The trial and sentencing proceeding were held before Senior United States District Judge Nina Gershon.

The sentence was announced by Benton J. Campbell, United States Attorney for the Eastern District of New York.

During the period of the conspiracy, Friedman’s was a national jewelry chain whose shares were traded on the New York Stock Exchange. The evidence at trial established that Stinn led a multi-year securities fraud scheme that inflated Friedman’s reported financial performance and hid from the market the serious problems the company had collecting money owed for hundreds of millions of dollars of jewelry that it had sold on credit. As part of the scheme, Stinn and his co-conspirators repeatedly lied to shareholders and the investing public about Friedman’s financial performance, made false and fraudulent representations to Friedman’s auditors, and manipulated the company’s accounting in order to prevent auditors from discovering the falsity of Friedman’s financial statements. As found by the court at sentencing, Stinn’s fraud scheme resulted in Friedman’s shareholders and other victims of the scheme losing more than $20 million.

Several months after the announcement of the government’s investigation in November 2003, Friedman’s stock was de-listed from the New York Stock Exchange. Friedman’s ultimately filed for bankruptcy in January 2005.

As always, this blog is open for comments.

Do you think that this sentence is fair?

Would you, if you had the opportunity to serve on a jury, have given Brad – more, less or this amount a punishment for his guilty plea?

COMMENTS ARE WELCOME!

Ethics Speaker Chuck Gallagher to Address University of South Dakota Business Ethics Symposium

VERMILLION, S.D. – During troubled economic times, Chuck Gallagher isn’t afraid to share his story of success – and how he lost it all. Gallagher, a business executive and motivational speaker, will be a guest of the Beacom School of Business of The University of South Dakota on Monday, April 27 at 7 p.m. in the Wayne S. Knutson Theatre.

Gallagher, a former CPA who lost everything because of poor choices, will present the program “Choices: Negative Consequences, Positive Results” where he will discuss some of the decisions he made in his attempts to make a better life for he and his family. Gallagher eventually lost it all, spent time in federal prison, but has found success again by making the right choices – personally and professionally.

“My lecture deals with issues of business ethics, particularly the choices we make in life and the consequences that follow,” says Gallagher. “Having been a successful CPA in the 80s, spent time in federal prison in the 90s and risen to the level of senior VP in a public company in the 2000s, I can speak from experience that I’ve lived with negative consequences thanks to some very stupid choices I made. But I’ve also had some incredible positive results based on the choices I made after spending time in a federal prison.”

Gallagher’s message is sure to resonate with students who are seeking answers on what it takes to be successful in today’s business world despite the presence of poor ethics and negative consequences. Ultimately, he explains, it’s about students differentiating themselves – positively – from their peers.

“I’m the poster child of what not to do,” he admits. “Ethical issues aren’t always black and white. If you want to be successful, ask the question ‘what are you doing to differentiate yourself?’”

A professional speaker, business entrepreneur, and sales executive, Gallagher has led a $40 million sales region with 125 sales representatives and started his own training business with projects in 30 states. Gallagher currently helps employees increase their sales results and skills while realizing the ramifications of their ethical choices. In addition to addressing students and audiences at colleges and universities throughout the United States, Gallagher also shares his business ethics message with business-related and health care related organizations.

“Choices: Negative Consequences, Positive Results” is made possible by the Beacom Opportunity Fund and the Arthur A. Volk Symposium. The Beacom Opportunity Fund provides resources for initiatives that promote the Beacom School of Business’s students and programs. Funding from the Volk Symposium affords opportunities for the business school to bring together students, academicians, and business leaders for discussion of current topics of interest. For more information about “Choices: Negative Consequences, Positive Results,” please contact the Beacom School of Business at (605) 677-5455.

A photograph of Gallagher is available for download at www.usd.edu/urelations/images/Chuck_Gallagher.jpg.

About The University of South Dakota
Founded in 1862, The University of South Dakota is designated as the only public liberal arts university in the state and is home to a comprehensive College of Arts and Sciences, School of Education, the state’s only School of Law, School of Medicine, School of Health Sciences, the accredited Beacom School of Business and the College of Fine Arts. It has an enrollment of approximately 9,200 students taught by 400 faculty members. More information is available at www.usd.edu/press/news.

Chuck Gallagher – Business Ethics Expert Speaks at United States Coast Guard Academy 20th Annual Ethics Forum

Given the increased complications junior officers face and what was seen as a gradual deterioration in moral and ethical standards of behavior within the government, the class of 1948, at their 40th reunion, felt that the Academy graduates should have the best foundation possible in the humanities, government, integrity, ethics and political judgment.  Furthermore, they felt that Academy graduates must be outstanding citizens, as well as good officers and leaders.

These words reprinted with minor modification are part of the program for the 20th Annual Coast Guard Academy Ethics Forum.

In 1989, the Class of ‘48 established an endowment fund, now supplemented by the Class of ‘57, “To provide a source of investment income to stimulate and enrich the training of the Corp of Cadets in good citizenship and ethics.”

As a business ethics speaker with strong ties to University and higher education presentations in ethics, I was honored to accept the invitation to speak to the United States Coast Guard Academy for their ethics forum.  Knowing that every choice has a consequence, I feel that it is part of my calling to remind, if not impress, on the minds of young adults the critical importance of understanding that consequences always follow choices made.

While many people cannot imagine making choices in life that can lead to disastrous consequences, the reality is we all are vulnerable to temptation and as soon as we say it will never happen to me, the likelihood is that a test of integrity or ethical decision making is headed your way.  Many of the cadets attending seemed to get the message, knowing that they are being groomed to be responsible for lives of US citizens and property of the US Government.

Prior to my presentation, many exceptional people (speakers and presenters) were assembled to make this 20th annual event memorable and effective for the participants.  A keynote presentation, made on opening night by Rear admiral William F. Merlin, was a highlight and set the tone for the event for the cadets.  Rear admiral Merlin spoke of (1) greed and (2) hubris – as the foundation of unethical behavior.  As I listened to his comments, I had to apply them to my own personal story, which I openly shared with the cadets in my presentations today.  While I didn’t start my venture into unethical behavior with greed in mind, I honestly must say that “greed” took over and “hubris” became the word of the day.  I was, self defined, as the smartest man in the room and felt that somehow the rules didn’t apply to me.

Wrong.  The rules do apply to me and to everyone else.  In fact the one rule that sticks out now most is the rule – you reap what you sow.  That’s true.  I did.  Prison following bad choices was the consequences of my sowing – so to speak.

Rear admiral Merlin completed his comments with one more word – humility.  Again, his words spoke directly to me.  When the illusion I had created was dissipated – the bubble burst so to speak – I was faced with the daunting task of telling my wife, family, business partners and friends that I was no more than a liar and thief.   There is nothing more humbling than speaking the truth and knowing that the illusion of success was gone.  Yet, as difficult as it was to communicate that truth, it was also freeing.  Unencumbered by illusion, I was able to make new empowering choices that (like all choices) would have a profound consequence – only this time in a positive manner.

Perhaps, though I may never know the impact, the words spoken in my presentations and those of others – may – just may – have an impact that is positive.

As I closed by thoughts I stated the following:

Before I took those 23 steps into prison – I thought I made good choices.  After I became 11642.058 (my prison number), I understood that every choice has a consequence.  If you want positive results in life you must build a foundation of good choices.

Before I took those 23 steps – I lived life as an illusion.  After I became 11642-058, I came to know that truth is freeing and though painful at times will always support a foundation of trust which is the backbone of all relationships.

Before I took those 23 steps – I thought I was successful.  After I became 11642-058, I came to understand that success has nothing to do with the things we amass, but rather success in life is defined by the impact we have on those we come in contact with.

Make wise choices – look past life’s illusions and claim your success by making a difference in the lives of those come in contact with.  As future leaders, we, the people, are placing our trust in you!

As a side note, the US Coast Guard Academy is listed as one of the top schools in 2009.  Congratulations.

Dumb but Premeditated Fraud – Stephanie L. Mayer of Simpsonville, SC Pleads Guilty

As I leave Pittsburgh, PA from a speaking engagement on ethics and fraud, I couldn’t help but stop when I read about a 38 year old Simpsonville, SC woman and her attempt at fraud.  A “Bernie Madoff” she isn’t as her fraud lacked creativity and ended quickly.

Every choice has a consequence.  That is a statement that I speak often as I address groups nationwide.  Whether it is Bernie Madoff, his accountant (now charged with fraud), Robert Stanford, Gordon Grigg or a host of others, the reality is whether the fraud lasts for some time or is short lived – in the case of Stephanie L. Mayer – there is a consequence for choices that we make.  If those choices are unethical, then the consequences can’t be good.

According to the US Attorney’s office:

In February 2008, Meyer opened accounts at four brokerage firms including the ultimate victims, The Vanguard Group and Ameriprise Financial.  Meyer then deposited worthless checks into the accounts, which resulted in fictitious or “phantom” balances.  Meyer then withdrew $175,000 from the credited Vanguard account and $130,000 from the Ameriprise account before the fraud was detected.

Without intending to sound judgmental, the “real impact” of the current recession wasn’t felt till late summer ‘08 or certainly the fall ‘08.  Therefore, the question is – what motivated Mayer to take such radical action.  She had to know that passing worthless checks to set up brokerage accounts was a venture that had a short life.

Of course – as reported in the Greenville News – “Until June 2008, Meyer deposited $5.4 million in checks spread across the firms from bank accounts that didn’t have sufficient funds to cover the checks, according to the charges.  She also pleaded guilty to mail fraud charges for mailings to Minnesota and Pennsylvania, according to the charges.”

BACKGROUND OF A FRAUD:

Frauds, regardless of type, need three things in order to take life – (1) Need; (2) Opportunity and (3) Rationalization.  The question related to the Mayer fraud is what was her (1) need and (2) rationalization?  The obvious opportunity was the method of execution of the fraud – which was amateurish and dumb.  How Mayer effected her fraud shows her lack of experience and hopefully will be taken into account in her pre-sentence report.

Her guilty plea could result in a penalty of up to 20 years in prison and a fine of up to $250,000.00 on each of the two counts to which she pled guilty.  While, I would suspect that Stephanie L. Mayer is an amateur fraudster, in the current environment, I would not be surprised if she received a prison sentence of well over three years.

If you know Stephanie and might comment on her motivation – please know that YOUR COMMENTS ARE WELCOME.

David G. Friehling, CPA for Bernie Madoff Investment Securities Charged with Fraud! And The Dominios Begin To Fall…

With a $65 Billion Ponzi scheme in play and Bernie Madoff electing to plead guilty, it is no great surprise that others will being to fall as the government widens the responsibility net for the largest Ponzi scheme in US history.

I must admit this hits home and was something I expected.  Although I wish I could say something different, I, too, was a CPA, created a Ponzi scheme and spent time in Federal prison.  It is no fun.  And, without a doubt, Friehling will spend time there himself – although my guess – his sentence will much longer than mine.

Yesterday, David G. Friehling, CPA (licensed in the State of New York) was charged with securities fraud, aiding and abetting investment adviser fraud, and  four counts of filing false audit reports with theExchange Commission (“SEC”).   Friehling is the sole practitioner at Friehling & Horowitz, CPAs, P.C. in New York.  As a point of reference, Friehling was the son-in-law of Jerome Horowitz (his former accounting partner) who didn’t live to see it all unravel.  He dided on March 12, the day Madoff plead guilty.

According to a news release issued by the US Attorney’s office:

From 1991 through 2008, F&H was the accounting firm retained by BLMIS (Bernie L. Madoff Investment Securities) purportedly to audit BLMIS’s financial statements. FRIEHLING created BLMIS’s certified and purportedly audited financial statements, including balance sheets, statements of income, statements of cash flows, and reports on internal control. FRIEHLING falsely certified that he had prepared such statements in accordance with Generally Accepted Auditing Standards (“GAAS”) and in conformity with Generally Accepted Accounting Principles (“GAAP”). Those financial  statements were filed with the SEC and sent to clients of BLMIS.   BLMIS paid FRIEHLING approximately $12,000 to $14,500 per month for his services between 2004 and 2007.

Sorry, but before going any further, one must question the payment.  $14,500 a month is a small price to pay for disgusing a fraud considering that Friehling will be facing certain loss of his license and a lot of time in Federal Prison.  But, there is more…  the news release goes on to say:

FRIEHLING failed to conduct audits that complied with GAAS and GAAP by, among other things, failing to: (a) conduct independent verification of BLMIS assets; (b) review material sources of BLMIS revenue, including commissions; (c) examine a bank account through which billions of dollars of BLMIS client funds flowed; (d) verify liabilities related to BLMIS client accounts; or (e) verify the purchase and custody of securities by BLMIS. FRIEHLING also failed to test internal controls as required under GAAP and GAAS standards. For example, FRIEHLING did not take any steps to test internal controls over areas such as BLMIS’s redemption of client funds, the payment of invoices for corporate expenses, or the purchase of securities by BLMIS on behalf of its clients. Further, commencing at least as far back as 1995, FRIEHLING did not maintain professional independence from his audit client, BLMIS.   Specifically, FRIEHLING and/or his wife had an account at BLMIS with a year-end net equity of more than $500,000 — the maximum amount that, under SEC rules, he could have invested with a broker-dealer client and still maintain his independence.

According to the SEC’s complaint, Friehling similarly did not conduct any audit procedures with respect to BMIS internal controls, and had no basis to represent that BMIS had no material inadequacies. Afraid that his work for BMIS would be subject to peer review, as required of accountants who conduct audits, Friehling lied to the American Institute of Certified Public Accountants for years and denied that he conducted any audit work.

Articles in Forbes stated the following:

“Friehling essentially sold his license to Madoff for more than 17 years while Madoff’s Ponzi scheme went undetected,” said James Clarkson, acting director of the SEC’s New York Regional Office. “For all those years, Friehling deceived investors and regulators by declaring that Madoff’s enterprise had a clean audit record.”

Madoff has said his business didn’t become a Ponzi scheme until the early 1990s, around the time that Horowitz retired and Friehling took over. He was not accused of wrongdoing in the court complaint.

Numerous reports claim that Friehling and family had $14 million invested with Madoff two months before his confession to the largest financial fraud in US history.  Since 2000, Friehling withdrew about $5.5 million from those accounts, the SEC stated.

WHERE FROM HERE?

Bernie Madoff, while perhaps brilliant (in his own way) is not capable – in my opinion – of pulling off a fraud of this magnitude without help.  I am not suggesting that Friehling knew about the Ponzi scheme (he says he didn’t), but it is likely that he’ll be found guilty on most of the charges as there is no doubt that he’s (at a minimum) negligent.  Selling his license for money seems very clear.

But, from these headlines, I suspect there will be a demand for more “accountability” for audited financial statements and regulations placed on compliant CPA’s.  That is not the answer.  I have stated before and will again, you cannot legislate or regulate ethics or morality.  If a person elects to be dishonest…they will be dishonest regardless of the rules in place.

Friehling was a puppet for Bernard Madoff.  Most people (although most will deny it) have a price.  It appears that Friehling’s price wasn’t all that much.  Comfortable yes – rich no!  And knowing that his reputation is ruined, his license all but gone and many many years in prison facing him, I know that Friehling wishes he’d never met Bernie Madoff.  Hind sight is 20/20 and there is no doubt with all that is facing this CPA – Friehling is just beginning to face the consequences of his choices.

Every choice has a consequence!

My prediction – Friehling isn’t the only pawn is this massive fraud to fall.  There will be others so stay tuned…

FRIEHLING, 49, faces a statutory maximum sentence of 105 years in prison.

YOUR COMMENTS WELCOME!

Bernie Madoff in Jail! It’s Not “Club Fed” I Know – I’ve Been There…

There was cheering from the crowd when Madoff was immediately taken to jail.  Emotions are running high and will do so for years to come.   But this is not a joyous day.  Many victims lives have been radically transformed by the financial crime Madoff effected.  Likewise, Madoff’s life as he knew it is over.  Leaving the comfort of normal life to go to prison is a radically different experience as well.

I know – regretably I have been there for exactly the same crime Madoff plead guilty to today.

Every choice has a consequence.  Many were victimized by Madoff et al and both the victims and Madoff, himself, are facing the consequences of choices made.

Madoff made the following comments in court today.

“I operated a Ponzi scheme.  I thought it would end quickly, but it proved impossible.  I am ashamed for these criminal acts. I always knew this day would come.”

I was asked today on CBS radio – KRLD – by Ernie and Jay about the mentality of how something like this could happen.  Is it possible that Madoff just was out to steal from folks?  The answer is simply – NO.

While I don’t personally know Bernie Madoff, I know the thought process that ends in federal prison.  Madoff is a smart man.  In fact, I would say that he was brilliant in his ability to effect such a scheme successfully for so long.  That is rather amazing.  But, for a time, I suspect when he first got started, Madoff was legitimate.

To effect a fraud like this, there must be three components: (1) need; (2) opportunity and (3) rationalization.  My best guess is that Madoff had two needs that came together when he began this in the early 90’s – (a) emotional need – he would not admit that he was faliable; and (b) money – in that he likely lost money and was unwilling to admit that fact.  Hence, he entered into the second  part of creating such a fraud – he took advantage of his name and notariety to gain more money – more investors or more victims.

CNN reported: Madoff admitted that he never invested his clients’ money, and that he deposited the funds into a “Chase Manhattan” bank.

At that point, Madoff crossed the line of investing and became an outright fraud.  Amazingly, instead of continuing to invest clients money hoping for the big win, Madoff just deposited the money in the bank.  Of all revelations, that was the most amazing.  Effectively he just gave up, committed the crime and waiting until the house of cards fell.

TONIGHT FOR MADOFF:

As I type this I can speak first hand from experience, Madoff just entered a phase of life that is totally foreign and for which he is unprepared.  Likely, as he was removed from the court room, he went to processing where he removed his clothing and was issued prison issue clothing.  It is doubtful that he was allowed to keep much other than one set of “street” clothes that might be used for limited visiting privileges or meetings with legal counsel, etc.  He would have likely been handed his bed linens and escourted to his holding cell.   Unless because of his age he was assigned a lower bunk, he would be given the upper bunk as those with more time in the facility get the privilege of lower.  His meals would be a step above a Swanson’s TV dinner – maybe – and the routine is strict.

Counted multiple times per day, Madoff will soon find that he’s no more than anyone else incarcerated, an inmate.  Inmates will likely acknowledge him, but not consider him any more than they.  In fact, it is likely that many will avoid him fearing that what they might say to him will be used against them (they fear he’d become a snitch) in order to gain favor with the judge for a lighter sentence.

Tonight will be one of the longest nights of Madoff’s life.  He will wonder to himself – time and time again – what he has done and why.  Those thoughts will haunt him for the rest of his life, which from a free man’s perspective, has ended.

THE VICTIMS:

Now here’s where I should stop, but for whatever reason, I can’t.  I understand the anger, and desire for revenge that many feel.  It is natural as your trust has been violated.  This is no different than feeling that one has when a marriage ends with the distrust created by adultery.

Many would say that I am the least to offer advice.  Perhaps that is true, but I’m going to try.  First, from a practical perspective seek the legal help you need to recover what you can.  Know that there are possible sources for some recovery including the application of IRC Section 165(c)(2).  I am not an expert in that area, but I have a guest blog from someone who is.  Go there it might be helpful.

Beyond the legal recourse against Madoff and those involved – and I suspect that others will fall from this as well, may I say – with respect – put your loss into perspective.  We come into this world with nothing and leave that way as well.  Money – security – certainly are important, but it is afterall only material.  The longer one harbors anger or hate, the worse life becomes.  Finding the ability to recognize that Madoff will suffer and reap the consequences of his choices is significant.

Your life has changed – so has his.  No one walks away from this feeling good or whole.  The ultimate outcome, however, for you and your well being will, in large part, be a function of your ability to forgive.

IN THE LONG RUN:

Having been there, I know the pain of prison.  Some learn from their experience and others never get it.  In Madoff’s case we may never know what the true effect of his life changing experience will bring.  In my case, prison was life changing.  While I am thrilled with freedom, I understand that my time there changed my life and gave me an opportuity to do something positive today that, in fact, helps others.

Sometimes you can actually get lemonade from lemons!

As always – COMMENTS ARE WELCOME.

HERE is what Madoff read to the court.