I recall with vivid detail my first meeting to a wonderful organization – Success North Dallas. As I entered the room as a guest I noticed with keen interest the gathering of a large group of movers and shakers in the greater Dallas, Texas area business community. Frankly, I feel pleased to have been invited.
That particular meeting recognized a young man who caught everyone’s attention – Bob Johnson – the Chairman and CEO of Maverick Residential Mortgage – who had just been named by the Dallas Business Journal as one of the top 100 fastest growing businesses in the area.
News Release from 2007: Maverick Residential Mortgage, Inc. was selected as 48th highest winner of the 2007 Dallas 100 Entrepreneur Awards at an impressive awards banquet Nov. 7. Executives and representatives of Maverick learned of their impressive finish at the gala held in the Morton Meyerson Symphony Center in the Arts District near downtown Dallas.
Sponsored by the Caruth Institute for Entrepreneurship at the SMU Cox School of Business, the 2007 Dallas 100 Entrepreneur Awards honor the 100 top entrepreneurial businesses in the Dallas market.
Maverick Mortgage, one of the nation’s fastest growing and most dynamic privately held firms, was named the number one ranking company among the 60 fastest growing firms in Collin County last May.
“Barrett Owens and I are indebted to each and every one of our executives, loan officers and support professionals in all of our branches nationwide and in our corporate office,” said Bob Johnson, Maverick’s Chairman and Chief Executive Officer. “To finish as high as we did in the mortgage profession that has seen more than 180 companies close its doors is a tribute to our people’s commitment to fair business practices, dedication to doing their jobs to the best of their ability and beyond, and to their undying accountability to customers and industry partners such as builders and realtors. I hope that every Maverick holds his and her head high in the aftermath of this impressive ranking.”
Now, less than one year later CBS 11TV reports that Maverick has put out an official statement that informs us of the complete shutdown, 401K information to former employees, with a back-date to January 16th.
Dated January 26, 2008 – “Maverick is closing and your employment is terminated effective January 16, 2008.”
What Happened? According to a report from Jack Fink – CBS 11 reporter the following quotes were used in an article (a full copy can be see through the above link):
Maverick CEO Bob Johnson acknowledged the company couldn’t meet its payroll because of major cash flow problems. He said they discovered the cash crunch last week.
“We had no clue it was coming,” said employee Greg Baker. He said he’s beginning to wonder how he’ll put food on the table for his wife and three young sons.
“Everyone was stunned. There were tears. There was shock,” he said.
“We’re definitely trying everything we can to be able to handle that and that’s part of where we are right now — is getting our arms around how much cash we do have available for those individuals,” said Johnson.
Toward the end of January it was reported that both federal and state investigators are looking into why Maverick Residential Mortgage shut it’s doors.
According to a CBS 11 report:
In a letter to employees dated Jan. 25, company CEO Bob Johnson said that the payroll could not be funded because Maverick Residential Mortgage has “experienced unforseen business circumstances” and that their “employment is terminated effective Jan. 16.”
Now, the company’s CEO has asked federal and local law enforcement to investigate. Johnson said that the issue will not be resolved quickly, but he is committed to clearing Maverick Residential Mortgage’s name.
Back To Our First Meeting. Like most I was startled by the announcement. However, I recall the meeting with Bob Johnson at Success North Dallas. We were introduced and politely he asked what I did. My reply – I help companies avoid white collar crime. As a business ethics speaker and white collar crime speaker – my job is to help companies understand how white collar crime takes place and implement programs to thwart fraud like that from happening. His response – “Hum, we’ve got a strong company, but maybe there’ll be a need for an ethics program some day.” And with those comments, he moved to another participant in the meeting, all of whom seemed to be lauding praise on his company and accomplishments.
Too Late! As a business ethics and white collar crime speaker, (www.chuckgallagher.com) I find that all to often, corporate executives seem to think that actions like what Maverick Residential Mortgage experienced won’t happen to them. Every choice has a consequence. While fraud happens – there are steps that can be taken to minimize the likely-hood of white collar crime closing the doors of your company. While I regret what happened and the casualties that followed, I wonder if the outcome could have been prevented.
For now, law enforcement will have to do its job and there will clearly be more to come.
Your comments are welcome!