Gordon Grigg…scheduled for release 9/29/2014.
Lance Armstrong’s Collapse of Ethics (part one – NEED) – An indepth review by Chuck Gallagher ethics expert and author of the Human Side of EthicsJanuary 18, 2013
Illusions collapse! The collapse under their own weight governed by the law of gravity. If you pile too much bullsh*t on less than a solid foundation you will find yourself one day in a stinky pile of dung. That, today, is where Lance Armstrong finds himself. And the reality is – once you’re in it, it’s hard to dig your way out and ever get rid of the stench!
Heralded as a true American hero, Lance Armstrong was revered as an icon – a man who beat cancer, was at the top of his athletic career and a pay-it-forward guy with his non-profit foundation Livestrong. Today Armstrong’s past successes are dwarfed by his admission that he was a liar and bully. But is Armstrong’s story any different that those of lesser know folks who find themselves in a Collapse of Ethics? The patterns are the same only the names and circumstances change.
The following was reported by CNN:
Appearing tense, Armstrong told Winfrey it was a happy day for him to be there with her.
He described his years of denial as “one big lie that I repeated a lot of times.” He had races to win and a fairy tale image to keep up.
Armstrong reminisced on his storied past of being a hero who overcame cancer, winning the Tour repeatedly, having a happy marriage, children. “It’s just this mythic, perfect story, and it isn’t true,” he said.
It was impossible to live up to it, he said, and it fell apart.
What Lance stated is common – not easy – but common for those of us who build a house of cards only to watch it collapse under the weight of unethical choices that were compounded by lies and more lies. The question is – what are the patterns that can creep into our lives that allow someone who knows better to make unethical choices?
There is a pattern – a clear pattern of behavior – that is not specific to a person, but rather specific to unethical behavior and it starts with NEED. And, while the word – NEED – is wide open to interpretation, the emotion connected with it is rather simple. Defined as a physiological or psychological requirement for the well-being of an organism, NEED is that elusive thing driven by an internal desire connected with an emotion that drives behavior. To be clear…I’m no psychologist, but there is no doubt that there was an internal emotional desire that went unfulfilled that contributed to the choices that Lance Armstrong took.
Below is a partial transcript of Oprah’s interview with Lance Armstrong:
Oprah Winfrey: Did you ever take banned substances to enhance your cycling performance?
Lance Armstrong: “Yes.”
OW: Was one of those banned substances EPO?
OW: Did you ever blood dope or use blood transfusions to enhance your cycling performance?
OW: Did you ever use any other banned substances such as testosterone, cortisone or Human Growth Hormone?
OW: In all seven of your Tour de France victories, did you ever take banned substances or blood dope?
OW: Was it humanly possible to win the Tour de France without doping, seven times?
LA: “Not in my opinion. That generation. I didn’t invent the culture, but I didn’t try to stop the culture.”
Notice…while admitting guilt a key factor emerges…Lance believed that he could not win without acting unethically in his sport of choice. In fact, he acknowledged that while he “didn’t invest the culture” he “didn’t try to stop the culture.” In other words, Armstrong, like many others who act out unethically, took the approach that it was alright to take illegal or unethical actions (or both) as long as it was the norm!
But back to NEED. For Armstrong to win he believed that he NEEDED to use performance enhancing drugs! Winning was important and winning the old fashioned way didn’t seem to be an option.
There is an illusory truth that most of us miss when we are in the midst of making life changing choices…and that is – if the actions of others are common place we assume that similar actions that we might make are alright. Rarely do we challenge the common actions around us and ask the hard questions about ethics. Armstrong, in his answers to Oprah’s questions, demonstrates that. See the transcript below:
OW: You said to me earlier you don’t think it was possible to win without doping?
LA: “Not in that generation, and I’m not here to talk about others in that generation. It’s been well-documented. I didn’t invent the culture, but I didn’t try to stop the culture, and that’s my mistake, and that’s what I have to be sorry for, and that’s what something and the sport is now paying the price because of that. So I am sorry for that. I didn’t have access to anything else that nobody else did.”
OW: Usada issued a 164-page report. CEO Travis Tygart said you and US Postal team pulled off the most sophisticated, professional and successful doping programme sport has ever seen. Was it?
LA: “No. It definitely was professional, and it was definitely smart, if you can call it that, but it was very conservative, very risk-averse, very aware of what mattered. One race mattered for me. But to say that that program was bigger than the East German doping program in the ’70s and ’80s? That’s not true.”
OW: What was the culture? Can you explain the culture to us?
LA: “I don’t want to accuse anybody else. I don’t want to talk about anybody else. I made my decisions. They are my mistakes, and I am sitting here today to acknowledge that and to say I’m sorry for that. The culture was what it was.”
OW: Was everybody doing it? That’s what we’ve heard. Was everybody doing it?
LA: “I didn’t know everybody. I didn’t live and train with everybody. I didn’t race with everybody. I can’t say that. There will be people that say that. There will be people that say, ‘OK, there are 200 guys on the tour, I can tell you five guys that didn’t, and those are the five heroes’, and they’re right.”
What was Lance’s NEED? Well he says it best in one of his comment to Oprah!
“My ruthless desire to win at all costs served me well on the bike but the level it went to, for whatever reason, is a flaw. That desire, that attitude, that arrogance.”
Lance Armstrong’s Collapse of Ethics will continue…
Meanwhile – YOUR COMMENTS ARE WELCOME!
KPMG India Fraud Survey – Patterns of Crime – Comments by Business Ethics and Fraud Prevention Expert Chuck GallagherDecember 9, 2012
White Collar Crime up? Is that any surprise considering the vast changes in the world economy over the past four years? With high profile cases like Bernie Madoff and a host of others, I have been asked multiple times if we reached a point where “White Collar Crime” may be on the decline. My response is “heaven’s no!” In fact, there are three components of an ethical lapse and the proliferation of “White Collar Crime” and NEED is at the top of the list!
When the Economy stinks NEED IS HIGH…
To my left is a graph from a KPMG India Fraud Survey – the entire report is found HERE. In their report KPMG states that “White-collar crime in corporate India has witnessed a ‘substantial increase’ over the last two years.”
The graph shows the areas where respondents indicated that fraud had taken place. Interestingly enough, according to the report the incidents of fraud had increased by 10% from 2010 to the same survey in 2012.
According to the KPMG Survey:
Cracking down on fraud is critical for a country that needs investment.
“India is a fast-growing economy. The problem is a level of low confidence in international investors, which stems from corruption,” Rohit Mahajan, partner and co-head, forensic services, KPMG India, said at a press briefing in New Delhi. “Besides international investors, this has also impacted entrepreneurial spirit in India.”
The infringements are of various kinds, with bribery and corruption making up 83% of cases. A large part of the frauds also relate to cyber crime (71%) and diversion of assets (65%). The sectors most affected are financial services (33%) and information and entertainment (17%), according to the survey.
Most frauds (85%) are investigated internally and very little of the money is actually recovered, the survey said. The most effective methods for detecting frauds are whistleblowers, internal audits and data analytics.
The challenge represented by this report is not limited to India. Other data suggests that similar patterns of fraud and white collar crime exist in all developed economies especially those whose development has been spurned by rapid economic growth. India and China for example. The challenge becomes how to stop the proliferation of white collar crime? Policies alone will not be the most significant deterrent. We must stem the gap between ethical policies and practical behavior.
Often misconduct either never gets reported or when reported is somehow never escalated beyond direct managers. This silo of data prohibits effective solutions when combating white collar crime. For purposes of this post however the primary value is to observe the patterns of white collar crime so organizations will have an intelligent methodology to target abuse and curb unethical and potentially illegal practices.
YOUR COMMENTS ARE WELCOME!
As the founder of the Ethics Resource Group, I work with Companies, Associations and Universities bring awareness of Ethical Choices and how to help Employee and Members stay within the ethical boundaries. For more information contact me at firstname.lastname@example.org or visit chuckgallagher.com
Christopher Olivera, former GameStop VP of corporate communications and public affairs plead guilty to embezzlementNovember 5, 2012
Why do good people, well educated people, make unethical choices – in many cases choices that are illegal – knowing that “Every Choice has a Consequence” and the consequences that follow unethical illegal choices are never pleasant?
Frank Christopher Olivera, former GameStop VP of corporate communications and public affairs plead guilty Thursday to one count of mail fraud for embezzling $1,965,900 from the company.
More information is provide on my White Collar Crime Speaker blog. You can read the full post here.
YOUR COMMENTS ARE WELCOME
Whatever Happened to the Criminal Justice System in the USA? Dan Frishberg’s Biz Radio Folly goes Unpunished and Dan’s still on the Radio… Go Figure!July 20, 2012
It’s been a while…a long while since I turned my attention to Daniel ( Dan ) Frishberg – the radio personality who, with his partner Al Kaleta, caused many an investor to lose substantial funds in the failed Biz Radio debacle. I received an email today from a defrocked investor in Dan Frishberg’s failed scheme asking “Whatever happened to the criminal justice system in the USA? Dandy question, cause it seems that Dan Frishberg has effectively walked away with no criminal consequence to his very public investor fraud. If you want to see background go to these wordpress posts on “The Money Man“.
The key is to hold the right assets for enough time so that the investment can reap its full reward. It takes a lot confidence for an investor to believe that the company will not only be in business years from now but will continue to create an increasing amount of value several business cycles into the future. Successful investors are only able to hold on to stocks for the long term if they are able to create conviction with the proper due diligence, generate income, and protect their capital during uncertain times.
Hum…I read the words written and wonder! You state, “It takes a lot confidence for an investor to believe that the company will not only be in business years from now but will continue to create an increasing amount of value several business cycles into the future.” Yet, I wonder how the folks feel that listened to your advice on Biz Radio and your podcasts and YouTube and believed that you had a sustainable business model that would create an increasing amount of value to sustain them into the future. Seems from all accounts that you and your cronies led folks into investing into nothing more than a Ponzi scheme and today they have lost. But have you?
“Successful investors are only able to hold on to stocks for the long term if they are able to create conviction with the proper due diligence, generate income, and protect their capital during uncertain times.” Dan those are your words. Yet, you solicited investments that did not protect capital, generate income and were void of due diligence. Shame on you…! You survived, but what about those who trusted you?
I believe in Second Chances – in fact I wrote a book about it! I know with every fiber of my being how you operate as (sadly) I was you at one time. But there is one BIG DIFFERENCE. I acknowledged my unethical actions, made restitution and changed my choices. Seems accepting responsibility – which is the first step to recovery – is something that continues to allude you. Isn’t it time – Dan Frishberg – to face the truth of your lies and deceptions – take responsibility – make restitution and then move forward with your life in an honest and ethical way.
You – Dan Frishberg – could be a leader in ethical business practice, sharing the truth of your folly and how unethical practice can be turned into societal good. Sadly, Dan, it seems that you only know one thing – how to be a talking head on the radio. Every choice has a consequence and the consequences of your choices are not over…cause karma’s a bitch.
If you have been defrauded by Dan Frishberg and Al Kaleta – feel free to share your experience so others can at least be warned!
ETHICS AND WHITE COLLAR CRIME NEWS RELEASE:
Edward Louis Molz, III, aka “Frank Sullivan,” 29, of Plano, Texas, was sentenced by U.S. District Judge Sam A. Lindsay to 96 months in federal prison and ordered to pay $1,074,725 in restitution following his guilty plea in January to one count of wire fraud in connection with a fraudulent advance fee scheme he ran.
In addition, according to the plea agreement, Molz will be ordered to forfeit property that was derived from proceeds traceable to his offense, including funds seized on September 7, 2010, from the 3rd Street Financial LLC account at JPMorgan Chase, as well as a 2007 BMW 650, a 2005 Maserati and real estate located on Cartwright Street in Irving, Texas.
Molz was arrested in September 2010 at his home by FBI agents on wire fraud and mail fraud charges outlined in a federal criminal complaint, and was released on a personal recognizance bond. A federal grand jury returned a six-count indictment the following month charging Molz with four counts of wire fraud and two counts of mail fraud. In March 2011, Molz’s bond was revoked.
According to the factual resume filed in the case, from November 2009 through May 2010, Molz ran a scheme in which he induced small business owners, who were seeking alternative means of financing, to pay a fee to purchase an “aged” corporations. These “aged” corporations purportedly had access to lines of credit that were available to the purchaser.
To carry out his scheme, Molz established 3rd Street Financial, LLC, and, using the assumed name of “Frank Sullivan,” held himself out as its chief financial officer. He marketed 3rd Street Financial through a website and a loose association of financial brokers. He represented to potential purchasers that he had established and maintained a number of “aged” corporations which had been in existence for four to five years and had access to lines of credit between $250,000 and $400,000. For a $3250 acquisition fee, a purchaser could acquire a “Tier 1″ corporation with a minimum line of credit of $150,000. However, for a $6500 acquisition fee, a purchaser could acquire a “Tier 2″ corporation with a $250,000 minimum line of credit.
Molz represented that upon payment of the fees, he could deliver the aged corporation to a purchaser within nine to 12 weeks. He also represented that each “aged” corporation had additional benefits, including established “business trade lines,” a complete financial and business plan, a Dun & Bradstreet listing and three years of valid tax returns. He furnished potential purchasers with false and fictitious documents, including service agreements, testimonials from satisfied purchasers and letters from financial institutions confirming the issuance of lines of credit.
During the time frame mentioned above, approximately 247 individuals mailed or wired money to Molz and he deposited those funds into JPMorgan Chase and Compass Bank accounts. Molz did not deliver any “aged” corporations as promised. Instead, he used the money almost exclusively for his personal benefit, including the acquisition of personal assets and real estate.
YOUR COMMENTS ARE WELCOME
Ethics and Honest Services: Promoting your book is one thing – fraud is quite another (or was it fraud?) … just ask Michael Jimenez and Marie MasonJuly 26, 2011
The former fiscal manager for the Hillsborough County Head Start program goes on trial in federal court along with his wife and another Head Start employee on fraud charges.
Michael Jimenez is charged with conspiring with fellow Head Start employee Marie Mason to have the pre-school program buy $9,000 worth of books authored by Jimenez’ wife, Johana Melendez Santiago.
U.S Attorney Robert O’Neill is handling the government’s case personally. O’Neill is also the lead prosecutor in the government’s public corruption case against former Hillsborough County Commissioner Kevin White.
Jimenez, Melendez and Mason each face three felony counts related to the book sale including obtaining “by fraud” more than $5,000 from a government agency, and obtaining money by “false and fraudulent pretenses” that deprived citizens and Head Start clients of their right to “honest services.”Defense attorneys say their clients did not intend to defraud the government. The purchase of 750 copies of “Travel Boy Helps Sebastian,” a book that teaches children about germs, was not done covertly, and the county got good value for the money spent. The 47-page book retails on Amazon.com for about $25 and is available in English and Spanish.
“The county bought the books …. That’s not fraudulent,” said Jeffrey Brown, Melendez’ lawyer. “The county paid for the books and the county got the books.”
Details in the federal indictment closely mirror evidence unearthed by a Hillsborough County investigator last year. Emails showed Melendez contacted her husband on April 15, 2010, concerning a “book order.”
“Here’s a letter of presentation of my book in case they need justification,” Melendez wrote, adding, “I’ll have the quote sent immediately.” She followed up with an email to a Head Start procurement employee.
Six days later, Jimenez forwarded the presentation to the procurement employee.
Mason, the agency’s family and mental health director, initiated an internal purchase request form for the book on May 3 of that year.
Originally, the agency was going to purchase 2,000 copies of the book. But several employees told the county investigator they were pressured to reduce the order to 750 copies so it wouldn’t be reviewed by the county’s procurement office.
“It was further part of the conspiracy that the conspirators would and did keep the total price of the purchase of the books under $10,000 so that the process of purchasing the books would not have to go through the bid process,” the indictment stated.
O’Neill won a tactical victory Thursday when Bucklew denied a defense motion to exclude evidence that Jimenez and Mason had not disclosed a conflict of interest in approving the purchase of the book. Defense attorneys cited a U.S. Supreme Court ruling last year in Skilling v. United States that a fraud conviction cannot be based on conflicts of financial interest.
“Skilling says you can’t prove honest services fraud by anything other than bribery or a kickback,” said David Weisbrod, attorney for Jimenez.
The judge, however, agreed with O’Neill that the high court ruling did not say conflict of interest evidence could not be admitted, only that it could not be the basis of a conviction for honest services fraud.
However, the defense is expected to hammer at the points they say were raised in Skilling: No bribery or kickbacks took place, therefore there was no fraud.
O’Neill disagreed, saying in the hearing that the Supreme Court has defined “kickback” as any money, gratuity or gift provided directly to people for services or obtaining services.
Head Start, a school readiness program under the U.S. Department of Health and Human Services, is funded with federal and county dollars. When officials in the county’s Family & Aging Services Department learned of the book deal, they passed the information to County Administrator Mike Merrill, who ordered an internal investigation.
Based on the probe’s findings, Merrill tried to fire Jimenez in December. But federal rules require such a termination be approved by the executive committee of the Head Start Policy Council, a group consisting mostly of parents of children in the program.
When the group refused to fire Jimenez, Merrill took the next step under Head Start guidelines by referring the firing to a three-person committee made up of two county officials and the chairman of the policy council. They agreed in March that Jimenez should be fired.
Merrill also had recommended that Mason be fired, but the Head Start committee refused. After negotiations between Mason’s lawyer and the county, she was allowed to come back to work. Mason is now on administrative leave without pay pending the outcome of the trial.
An excellent article about this issue is found here.
THOUGHTS AND COMMENTS WELCOME!
Business Ethics: It is really about more than avoiding prison! Is there a little Bernie Madoff in each of US? A Guest Blog by Corey RichardsonJuly 24, 2011
A “Man of The Age” financier is surrounded by mystery and adoring members of the moneyed elite hungry for some of his wondrous returns. This paragon of the business class with The Midas Touch accepts only a few choice clients who seem to wither in his presence as they deliver their accumulated wealth into his magical hands – no questions asked. The returns are beyond belief, and for very good reasons. Unbeknownst to all, this wizard of the market is juggling fraudulent accounts to pay for his lavish lifestyle. The only trading is from their hands to his. The ruse comes tumbling down and the entire nation is stunned.
The scoundrel portrayed above is Charles Dickens’ character, Mr. Merdle of Little Dorrit, first published in 1857. Dickens foretold the Madoff scandal verbatim in his quintessential corruption tale, but this iniquitous business leader is an age-old archetype, and we, like Dickens, find it easy to vilify him due to the magnitude of his crimes; No stealing a crust of bread for this villain. At its polar opposite, take the “common criminal,” the savage monster seen today in T.V. cop shows, the local news, and innumerable B-movies. This standard is bloodthirsty, drug- crazed, and has a soul as black as night.
Dickens’ work is also replete with such characters. The beauty of these caricatures is that we cannot find ourselves in either. They conveniently represent “other.” All the while we can sit comfortably in our living rooms with our sense of moral rage because we do not bilk venerable charitable funds and we do not cook meth in our kitchen. Yet, it can be argued that if we truly strive for a better world, then we need to go well beyond the knee-jerk reactions of these scenarios, and find ourselves in the moral conundrums.
Stricter regulations of the financial sector and more accountability, gun control legislation, sensible criminal sentencing laws, affordable drug rehab, etc., are important factors, but are only part of the solution. Even focusing on improvements to education and social services, which have been shown to be extremely important in crime prevention within certain groups, is still only a small part. To thoroughly understand what drives people as different as Kenneth Lay or a Gov. “Blago,” as well as a gun-totting inner-city kid with a pocket full of dope, we must understand root causes of criminal behavior, thus pointing the way for our next generation of leaders- and evaluate ourselves in our own business affairs.
“What causes criminal activity, and. who are these people who commit crimes against our society, such as … ” taking items from work, “fudging” on taxes, paying for non-business activity with a business account, inflating an insurance claim, switching labels at a store, producing unsafe products, “padding” a bill, or any number of violations of legislated standards for personal gain committed by everyday people.
Due to perception, universally known within psychology as the fundamental attribution error, these crimes are given little thought by those who commit them. Joe Citizen justifies and minimizes these activities as “bending” the rules. And this is where we see the attribution error in effect: we tend to overestimate the role of personal factors and underestimate the “influence of situations in others, and we overestimate the situational factor and underestimate the personal factor in our own circumstances. It is the age-old “We judge others on their actions, and we judge ourselves on our intent.” Or I’m bending the rules, and he is breaking the law.
This phenomenon is not unique to the middle and upper socioeconomic strata, and equally applies to the poor. A drug dealer feels that his activities, though illegal, are still a legitimate means to earn a livable wage within his community. The same could be said of any accountant or lawyer who “tweak’s” the system to make a little money. So, getting a television set off the back of a truck in the ghetto looks much like another’s decision to not claim income on a second job. It is all about perspective.
As we address the problem of the business class, we can facilitate the much-needed change in perspective with some cold, hard facts. Business leaders do not need to be as extraordinarily crooked as Madoff to affect a, huge societal burden. Study after-study demonstrates that “white collar” or corporate crimes, as well as middle-class crimes, ranging from tax evasion, insurance fraud, price fixing, inventory “shrinkage” (what a euphemism!), etc., weigh much more heavily than the number one Index crime, conventional property crime. Index crimes are known also as “street crimes.” They are highly visible crimes, easy to categorize and count, and are overwhelmingly committed by the poor. White collar crimes, by contrast, are difficult to detect and rarely prosecuted. Still, the economic yearly cost with respect to property crimes of the corporate America are approximately twenty times greater than conventional property crimes of index offenses, or a difference of $200 billion to $10 billion annually.
Having completed a fully accredited MBA program via a distance-based education format, I need to share that – this accomplishment – was done from an 8′ by II’ prison cell. I was an inmate and like most “on the inside,” I readily justified my criminal acts, which occurred within my professional life, as did the drug dealer or the burglar. So, as I approached my Business Ethics coursework, I did it with the secure knowledge that I committed a crime. This perspective, and the belief that my professors would judge my answers too with this in mind, gave me a keen eye in studying ethical queries in business.
I believe that when most students answer questions related to ethical foundations or detail their understanding of their own personal values, they do it from a perspective that they themselves could not possibly commit a crime. Such activities, such as smoking pot in the college dorm or not claiming wages from a summer job paid “under the table,” are simply not considered as crimes, which they are. Again the attribution error: “My (illegal) acts are not illegal, and certainly not unethical.
Everybody does it. It is no big deal.” And so forth. To cultivate a true ethical North in business, we must broaden our perspectives, and when an ethical dilemma arises, we can perceive it as such. No different from operations management or strategic planning. An appreciation of multiple perspectives — proffers a grand wealth of insight that will carry our next generation of leaders.
As a convict, my daily life is a direct result of criminal acts related to my work. In my studies, I can clearly see the untold millions that are affected by one unsafe product, but I can also appreciate how one man can justify criminal acts as a bad business decision, rather than a pathological act for profit with no respect for the law. To open the eyes of CEOs early in their training to the easy comparisons between corporate crime and “street” crimes, as well as offer tangible proof of the enormous societal burden of white-collar crime, would be of immeasurable value. In teaching business ethics, we must go well beyond the bland terms and definitions and the prosaic personal litanies of “What I value in the world.” We must make the coursework truly applicable and create managers and business leaders who intuitively understand how ethics within Corporate America are just as important, if not more so, as profit margins and supply chains.
Clearly, when I understand myself, I can understand Bernie Madoff or Kenneth Lay. I believe the same could be said of us all. The equation is simple: Unbridled Financial Gain plus Opportunity, then Add the Likelihood of Detection and Fear of Prosecution. Embracing the truth of unlawful acts in our everyday lives, be it business or personal, is much harder to do than to merely vilify in a fanciful Dickensian way the corporate or government leader who betrays our trust, or even the dope dealer of the inner cities. But it will help to create leaders who view all of their work and life through a lens of principled behavior. We must begin to see the situational nature of all criminals acts, and therein lies the beginning of meaningful solutions. It is not enough to alter the number of opportunities to steal or the severity of the requisite penalties, but to go further by changing what stealing looks like by different people, changing the perceptions of illegal gains, and infusing the intrinsic value of ethical behavior.
When we see that all of us have a little of Bernie Madoff in us, only then can we begin to view our world more clearly and begin to make authentically ethical decisions as we lead our companies and organizations. We may even make significant changes in our personal lives.
Business Ethics: It is really is about more than avoiding prison.
Corey Richardson Biography:
Corey John Richardson is a former clinician, who holds a Master’s Degree in PA Studies from the University of Nebraska’s College of Medicine (Omaha) and a Bachelor’s Degree in Health Science/PA Certificate from the University of Florida’s College of Health Related Professions (Gainesville). He holds an MBA from Salve Regina University’s Graduate Business School (Newport, RI) and has completed doctoral health science coursework with a focus on prison healthcare at Spalding University (Louisville, KY). Mr. Richardson’s work has been incorporated into criminology courses at the University of Cincinnati and has been included in CURE’s congressional file on correctional healthcare in support of HR 3710. He has performed medico-legal consulting and has legal experience assisting prisoners in various civil and criminal actions. As a pro se litigant, he won a precedent-setting case on appeal against the Kentucky DOC and its Abuse of Power (published at Richardson v. Rees, 283 S.W. 3d, 257). He has also worked as a facilitator in numerous psychotherapeutic and rehabilitative programs.
Mr. Richardson has written widely about prison issues and sobriety for publications such as Spotlight on Recovery, Cell Door Magazine (the official publication of the National Death Row Assistance Network), T’he Kentuckiana News, Perspectives (the official journal of the Association for Humanistic Psychology), The Grapevine (Alcoholics Anonymous’ international publication), The Long Term View: A journal of informed opinion (Massachusetts School of Law at Andover), OUTlooks (Canada’s GLBT magazine), and others. Several of his essays have been published in the book Voices Through The Wall and he won 1st Prize in the Ford Foundation’s 2OO9 national writing competition Think Outside the Cell, published in Love lives here, too. (2010)
Mr. Richardson maintains his writing at coreyrichardson.blogspot.com and may be reached at email@example.com. In 2001, he was convicted of crimes related to practicing medicine without a license and served 122 months in the Kentucky Department of Corrections; his supervising physician was given a probated sentence. Mr. Richardson has 13 years of continuous sobriety on July 14, 2011.
Jerry Holmes and R. Scott Pace face the Consequences of their Unethical and Illegal Actions. Prison, Probation and Restitution…July 12, 2011
Every choice has a consequence. What started out as a legitimate business turned into an opportunity to meet a need that coupled with individual rationalization became the fertilizer for fraud. As a business ethics and fraud prevention speaker, I see this frequently…intelligent and well meaning businessmen (or women) meeting a perceived need illegally and likely rationalizing that “they’ll pay it back” thus justifying their soon to be discovered illegal actions and then being forced to face the very real consequences of them.
Here’s the US Attorney’s news release…
DEPARTMENT OF JUSTICE
United States Attorney’s Office
Western District of North Carolina
FOR IMMEDIATE RELEASE
WEDNESDAY, JUNE 8, 2011
CONTACT: Lia Bantavani
FAX NUMBER: 704.227.0264
OWNERS OF SETTLEMENT COMPANY SENTENCED TO 33 MONTHS IN PRISON FOR EMBEZZLEMENT AND TAX EVASION CHARLOTTE, N.C. – The United States Attorney’s Office for the Western District of North Carolina announced that the owners of the Settlement Source, LLC, were each sentenced to prison terms for their role in embezzling money from the escrow account at the Settlement Source and for tax evasion.
U.S. District Judge Max O. Cogburn, Jr. sentenced Settlement Source owner and former chief executive, Jerry Holmes, 64, of Matthews, N.C., to serve 33 months in federal prison, to be followed by two years of supervised release. The defendant was also ordered to pay restitution in the amount of $1.9 million. Judge Cogburn also sentenced Settlement Source owner R. Scott Pace, 38, of Charlotte, to 33 months in federal prison, two years of supervised release, and ordered to pay restitution in the amount of $1.9 million.
The United States Attorney’s Office is joined in making today’s announcement by Chris Briese, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service (IRS) – Criminal Investigation Division (CID). Holmes and Pace pled guilty to the charges in a criminal bill of information filed on May 19, 2010. According to the bill of information, in or about November 2005 Holmes and Pace discovered that they could embezzle client funds from the escrow account – at least initially – without any customer discovering the embezzlement and without any noticeable effect on operations. Over time, Holmes and Pace, assisted by another defendant not yet sentenced, embezzled substantial amounts of money for, among other things, real estate investments, a box suite for Carolina Panthers football games, personal loans, and a loan for Holmes’ daughter and son-in-law to purchase a house. When the scheme collapsed in or about July 2008, it caused losses to clients and insurers of approximately $2.4 million.
In pronouncing the sentences, Judge Cogburn stressed that the sentences were only as low as they were because the defendants self-reported the fraud, believing it was unknown to the government. Holmes and Pace will be allowed to self report to begin service of their prison terms once the Federal Bureau of Prisons has designated the facilities at which they will serve their respective sentences. All federal prison sentences are served without the possibility of parole.
The investigation was led by the FBI and IRS-CID. The prosecution for the government was handled by Assistant U.S. Attorney Kurt W. Meyers of the U.S. Attorney’s Office in Charlotte.
If you have information that might be helpful in this case in identifying the motives behind the actions taken by Holmes or Pace…please share.
YOUR COMMENTS ARE WELCOME!