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.

Funeral Fraud – LA Women Charged in $1 Million Fake Funeral Scam – AMAZING!

I have heard of many things, but this one ranks high in creative approaches to scamming.  The R I P button likely stands for Resides In Prison cause that’s where these two will go if the charges alleged are proven.

According to the US Attorney’s office in LA – two women – allegedly participated in a scheme to cash life insurance policies for fictitious individuals and stage  funerals to create the appearance that the individuals had died.

According to the indictment, Shilling, a phlebotomist, and Crump, an employee at a now-defunct Long Beach mortuary, defrauded multiple insurance companies over a three-year period by cashing life insurance policies for non-existent identities, whom they claimed had died. As part of the scheme, Shilling and Crump allegedly caused the preparation of bogus death certificates, purchased burial plots and staged phony funerals to lend credibility to the scheme. When staging the funerals, the women allegedly filled caskets with various materials to make it appear they contained actual corpses.

Shilling and Crump allegedly defrauded several lending companies that advance cash to cover funeral expenses in exchange for a portion of the decedent’s life insurance policy. Shilling, Crump and their accomplices allegedly filed false documents with the County of Los Angeles stating the remains of one man were cremated and scattered at sea, when in fact no corpse existed. The indictment further alleges that defendant Crump offered a medical doctor $50,000 to create records supporting the fake death certificate.

According to a report in Connectingdirectors.com:

The US Attorney stated said the “dead” were likely fictitious people, but said identities of real people may have been stolen.

In one funeral at a Long Beach mortuary, authorities alleged that the women loaded a casket with various items to simulate the weight of a corpse they called “Jim Davis.” They purchased a plot in a Compton graveyard, had a funeral and had the casket buried.

In addition to the life insurance claims, which included a $250,000 policy, prosecutors said the women secured payments from financing companies to pay for inflated funeral costs.  We talked with representatives from American Funeral Financial (one of our sponsors) to ask about precautions for such activity.

We (at American Funeral Financial) work hard to provide service to our customers – the many funeral homes and cemeteries across the country that rely on us for funeral funding.  This story is quite amazing and not remotely normal in the standard course of business.  We make sure that we know our customers and have a comfort level of their viability before we enter into any funding transactions.  The steps we deal with to make funeral funding decisions should prevent this type of fraud from happening.  Still this is quite amazing.

Shilling and Crump were charged with mail fraud and wire fraud in connection with a scheme to defraud insurance companies and lending companies out of more than $750,000.  Two other women, Lydia Eileen Pearce, 37, owner of a mortuary in Long Beach, and Barbara Lynn, 54, a notary from Los Angeles, previously pleaded guilty in the alleged scam, said Montero, and he believed that more arrests were likely.

If convicted, they could face 20 years in prison.

YOUR COMMENTS WELCOME!

AIG Bonuses – Ethical or Insane? Business Ethics Speaker Chuck Gallagher Comments…

I want to make this clear – I am pro business!  I think that free enterprise is the life blood of our economic system and I fully support people making lots of money.  But, I have to question whether the payment of upwards of $165 million in bonuses to AIG employees is ethical or just insane?

QUESTION ONE:

The arguement in favor of AIG paying the bonuses is that the contracts that generated the bonuses were established before the economic meltdown and before AIG accepted government bailout money.  Employees who work(ed) for AIG therefore should be entitled to payment under the terms of their contract for services performed.

• Do you agree?
• Does the company have an ethical or moral obligation to pay regardless of circumstances?

QUESTION TWO:

AIG has accepted, according to published reports, upwards of $170 BILLION of government bailout money.  Sorry for the editoral content, but that is quite amazing by any standard that I could consider.  Nothing like that has happened in my lifetime and I’m over a half century in years.  So – here are some questions to consider:

• Should AIG be forced to void pre-existing employment and bonus contracts if they accept government bailout money?
• Should bonuses be paid?
• What basis or grounds for payment or nonpayment make sense for AIG?

QUESTION THREE:

If a homebuilder constructs a home and finds that he/she cannot sell it for the asking price and, in fact, finds that the market for his product is below the construction loan – what happens?  Most of the time, the bank will foreclose and the sub-contractors, who have mechanic leins against the property, lose their time and receivable.  In other words, they lose because circumstances have changed.

• Is AIG in the same circumstance?
• Should the employment compensation contracts be treated similar to a mechanics lien – void through forclosure?
• Is the government’s bailout of AIG in effect a forclosure to avoid bankrupcy?
• Is there any reason that AIG should be treated differently than other small businesses that are unable to honor their commitments today?

FINAL THOUGHTS:

The definition of business ethics is, in business situations, the discipline dealing with what is good and bad and with a moral duty and obligation.  The question for AIG is – what is the ethical thing to do?  As a business ethics speaker, there is no right or wrong answer to most situations, it rather is a function of doing the right thing considering all the facts and circumstances.  My opinion – the moral duty and obligation in this situation is to void the employment bonus contracts and accept that were it not for the taxpayers, AIG would not be in business!

Now is the time for AIG and any organization that accpets bailout money to make the tough decisions that honor the trust that the federal government and taxpayers have given them.  Look to Lee Iacocca’s example – when the government bailed out Chrysler, he took $1 as his compensation.  Perhaps the folks at AIG should take note.  One thing is for sure they are not winning friends and influencing people – at least not positively.

YOUR COMMENTS WELCOME!

Tim Masters – Victim or Victor? Every Choice Has A Consequence!

As I rose this a.m. – checking e-mail, CNN – just checking in with the world I was faced with another article on Tim Masters – the Fort Collins, Colorado man who was wrongly imprisoned for 9 years.  This must have been an eternity, especially for an innocent man.  Having spent time in federal prison (justly deserved – as I was guilty), I know that prison can change you.  But, as a business ethics and fraud prevention speaker, it wasn’t the wrongful imprisonment that caught my attention, it was the lead line of the article.

CNN’s writer states:  “Tim Masters squarely blames Fort Collins, Colorado, police and prosecutors for his inability to land gainful employment and for his not having a wife and kids at this stage in his life.”  The full CNN article can be found here. 

I know as I type these next words I am opening myself up to both positive and negative comments.  But, sometimes you have to go for it if you expect positive change to take place.  If the article is an accurate portrayal of how Tim Masters feels and thinks, then…

TIM MASTERS is playing the VICTIM role well!

In my experience, some thirteen years following my prison experience, VICTIMS remain such wallowing in self pity and anger.  Anger, self pity, blaming others for their plight, – you name it – just think of victims you know or have known – none of those feelings or emotions are empowering or bring about positive change.

Here are excerpts from the article:

CNN: Do you have trouble finding a job because of your time in jail?

Masters: Yeah, I think that has a lot to do with it. The first thing that comes up on a background check is “charges dismissed — first-degree murder.”

Better questions are Tim – what are you doing to look for employment opportunities?  Do you disclose your background well before the background check?  Do you capitalize on your notoriety garnering understanding for your unfortunate circumstance and give others a chance to reach out a hand to help?

In my experience, being a convicted felon is an obstacle.  But in Tim’s case he was acquitted.  He is innocent and most people can find compassion to give someone in Tim’s circumstance a chance.  I have found employment in both a publicly traded company and private enterprise since prison and I was guilty – unlike Tim.

The article continues:

CNN: If you could talk to the prosecutors or police who handled your case, what would you say to them?

Masters: I don’t want to talk to them at all.

CNN: Talk about your lawsuit against the prosecutors and police. Who does it target?

Masters: Mainly, [former prosecutors, now Judges] Jolene Blair and Terri Gilmore and [Fort Collins police Lt.] Jim Broderick, but there are a few other defendants involved and the city, but in my mind those are the big three.

I do not fault Tim for his lawsuit.  The law is there to protect, which includes protecting someone for their life being permanently altered by incorrect incarceration.  Given similar circumstances, I would likely do the same.  However, I can’t help but wonder if, while that is taking place, Tim could focus his energy toward something that is positive and empowering?

Like what – one might ask?

Every choice has a consequence.  There must have been reasons that Tim was considered a suspect in the first place.  Not that it was his fault, but evaluating those actions (way back then) might prove to be powerful lessons to youth today.    Tim has a powerful story.  He can have an impact.  He will be heard.  The power to reach out to others and help them discover what and/or who they are and how their choices can shape their life is powerful. 

I was sad today to read about Tim and where he is.   The tone of the story and answers to the  questions didn’t feel empowering.  They felt, at least to me, that those who falsely imprisoned Tim had won! Tim can have a wife, a family and a great life – it is truly a matter of CHOICE!

VICTIM or VICTOR – Tim the choice is yours!

Comments welcome!

Ethics? Not Tonight! It’s a Trick Kind of Evening. Happy Halloween

Well…this may be completely out of character…but ethically speaking I do have a moral duty and obligation to provide some sort of trick…so HAPPY HALLOWEEN.

McCain – Obama Dance Off…Business Ethics? – NO… Campaign Fun? – YES!

As a 51 year old business ethics speaker, I must say…this presidential election has been interesting.  Not only is it historic but the level of creativity has been over the top.

For the younger generation – history has been made as the first black man in history has won the nomination of his party and is a viable candidate for president of the United States.  And, had it not been Obama chosen, then history would still have been made as the nomination of her party would have been a female.  Either way, this is an historic election.

Likewise, the selection of Sarah Palin as a VP candidate has been attention getting in and of itself.  Should McCain win – many will credit his victory to Sarah’s down home charm.  Should he lose – there is not doubt she will be blamed.  Either way the governor of Alaska has received national attention.

So…with a race that some say is not so close…what can we do to bring some excitement to this race.  Well…here’s a solution.  Click on this next link – give it time to download and enjoy.  As I said, the creativity that has come from all sectors is rather amazing.

Dance off

Fact or Fiction? Question Posed by Business Ethics Speaker Chuck Gallagher

As a business ethics speaker I tell every audience on thing which is fact:  EVERY CHOICE HAS A CONSEQUENCE!  From time to time, people share with me inspiring stories of choices and consequences – most of which I do not have time or take time to verify.

With all the bad news spreading like a cancer, when I saw this I thought – “How remarkable” assuming it is true.  If it is – I am sure that those reading can verify the accuracy.  If it is not, then, if nothing else, it makes a point that perhaps we need to hear now.

Here’s the story!

His  name was Fleming, and he was a poor Scottish farmer. One day, while trying  to make a living for his family, he heard a cry for help coming from a  nearby bog. He dropped his tools and ran to the bog.

There,  mired to his waist in black muck, was a terrified boy, screaming and  struggling to free himself. Farmer Fleming saved the lad from what could  have been a slow and terrifying death.

The next day, a fancy  carriage pulled up to the Scotsman’s sparse surroundings. An elegantly  dressed nobleman stepped out and introduced himself as the father of the  boy Farmer Fleming had saved.

‘I want to repay you,’ said the  nobleman. ‘You saved my son’s life.’

‘No, I can’t accept payment  for what I did,’ the Scottish farmer replied waving off the offer. At that  moment, the farmer’s own son came to the door of the family hovel.

‘Is that your son?’ the nobleman asked.

‘Yes,’ the farmer  replied proudly.

‘I’ll make you a deal. Let me provide him with  the level of education my own son will enjoy. If the lad is anything like  his father, he’ll no doubt grow to be a man we both will be proud of.’ And  that he did.

Farmer  Fleming’s son attended the very best schools and in time, graduated from  St. Mary’s Hospital Medical School in London, and went on to become known  throughout the world as the noted Sir Alexander Fleming, the discoverer of  Penicillin.

Years afterward, the same nobleman’s son who was saved  from the bog was stricken with pneumonia.

What  saved his life?       Penicillin.

The name of the  nobleman?  Lord Randolph Churchill .. His son’s name?

Sir  Winston Churchill.

Someone  once said: What goes around comes around.

Two great men whose lives became intertwined by the simplest choice.  So whether you say, “What goes around comes around, you reap what you sow, or every choice has a consequence,” the reality is all are right.  Perhaps it is time to refocus our business efforts into those that are founded on solid business ethics.  Simply put – let’s make decisions that will yeild the highest and best results for all.

By the way, is the story above fact or fiction?  Your comments are welcome.

Social Security Fraud Could Earn 27 Year Old Shawn R. Johnson Prison Time!

So you think you can pull the wool over the eyes of the government? Not so fast. Every choice has a consequence and one of the things that some of us learn the hard way is – what you do in the dark will be brought to the light. In other words, if you do something that is wrong it will be discovered.

You reap what you sow! I know. I sowed bad seeds and reaped the consequences. And now it seems that the same may be true for a young 27 year old.

Shawn R. Johnson, of Fayette County, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on a charge of Social Security Fraud.

The one-count indictment named Shawn R. Johnson, age 27.

According to the indictment, Johnson failed to disclose to the Social Security Administration employment with and earned income from Polito Custom Carpet, located in Hopwood, Pennsylvania, and that such events affected his continued right to receive Supplemental Security Income benefits.

COMMENT: Now I can assure my readers that the minor benefit that Johnson received is not worth the cost he will pay. Facing up to 5 years in prison, a fine of $250,000, or both, Johnson will soon understand that cost of wrong choices is substantial.

Every choice has a consequence is a comment I make in most presentations. As a white collar crime speaker, I speak from first hand experience about the truth about consequences. Reality is – no one escapes the consequences of their choices. While Johnson may have enjoyed the money for a time and avoided the consequences – they did not avoid the consequences all together. Prison is no fun and Johnson is facing several years plus substantial restitution for this conviction. Likely he will serve time and that will prove to be a dramatic change from his prior activities. You do reap what you sow.

White Collar Crime Speaker – Chuck Gallagher – signing off…

Theft of Dead Mothers VA Benefits Earns Lyndell Simmons 5 Years in Prison!

And who says that every choice has no consequence? Bull! No matter what you do, the choices you make today will have a profound impact on you tomorrow and in the future.

A Lubbock man, Lyndell Simmons,age 46, who pled guilty in January to theft of government money or property, was sentenced to 60 months (five years) in prison and ordered to pay $21,529 restitution to the Department of Veterans Administration (VA).

According to documents filed in Court, Louise Simmons, Lyndell Simmons’ mother, was a beneficiary of VA Dependency and Indemnity Compensation Benefits. In March 2007, an investigation was initiated by the VA, Office of Inspector General, Criminal Investigation Division, after a complaint alleged that Ms. Simmons had not returned a marital status questionnaire. An investigation revealed that Ms. Simmons died on November 10, 2004.

STOP…She died in 2004? Well, how in the world did a dead woman cash checks? That is the question that began Simmons undoing!

Further investigation revealed that from approximately December 1, 2004 to March 1, 2007, Lyndell Simmons cashed approximately 22 VA benefits checks made payable to his mother, forging endorsements on each check. He cashed the checks and used the money for his own personal use.

NOTICE: Often it is not the magnitude of the crime and causes the time. In this case it seems the judge considered in the sentence not only the amount stolen, but the form the crime took. Stealing from the government your dead mothers benefits is cold.

White Collar Crime speaker – Chuck Gallagher – signing off…

And I Only Thought It Was George Washington Who Chopped Down the Cherry Trees!

You gotta be careful when you enter the national forests in this country…cause the rules are – only George Washington can chop down a cherry tree.

O.K. – being a bit serious…here’s one that I know won’t make national attention – hence it deserves a mention on this blog just for posterity.

United States Attorney Mary Beth Buchanan announced today, May 5, 2008, that Joseph Michael Harvey, a resident of Ridgway, Pennsylvania, pleaded guilty in federal court to a charge of theft of government property. 

WHAT DID HE TAKE YOU MIGHT ASK?

Harvey, age 40, pleaded guilty to one count and Assistant United States Attorney Marshall J. Piccinini advised the court that Harvey and another co‑defendant stole property belonging to the United States, by cutting down and removing approximately 11 black cherry trees from the Allegheny National Forest, having a value in excess of $1,000.00.

NOW WHAT THE HECK WOULD ANYONE WANT WITH 11 DEAD BLACK CHERRY TREES?

Judge McLaughlin scheduled sentencing for July 31, 2008 at 10:00 a.m.  The law provides for a total sentence of ten years in prison, a fine of $250,000, or both.  Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.

Wow…as a white collar crime speaker, I’ve got to mark this date on my calendar just to see what kind of sentence is issued for a tree chopper.