White Collar Crime hard to Deter? Perhaps we’re trying the wrong approach says Business Ethics Speaker Chuck Gallagher

February 23, 2010

How do companies deter White Collar Crime?

With media reports filled with stories of “white collar crime” such as the developing Koss embezzlement story and the on-going reports related to Allen Stanford and recently sentenced Bernie Madoff, it’s no wonder that organizations are seeking to find deterrents to this seemingly growing phenomenon.

As I prepare to address a group in just hours, I came across this article in the Charleston Regional Business Journal and it struck me – “We’re going about this all wrong!”  But, before I suggest what’s right let’s look at excerpts from the article featured below.  The whole article is here:

Law school panelists: White collar crime hard to deter

By Andy Owens
aowens@scbiznews.com
Published Feb. 22, 2010

Crime pays, at least if you’re a midlevel executive wearing a white collar.

Panelists at a symposium on crime and punishment said that fraudsters find the risk of being caught typically worth the potential reward for all but the most top-level executives.

Using Enron and WorldCom, along with more recent financial fraud, as examples, the panelists — a federal prosecutor, a CPA and a former Securities and Exchange Commission official — said deterring white collar crime is difficult, partly because criminals are typically caught after years of high living and typically only the top executives receive the harshest penalties.

COMMENT #1: The first problem I see is that none of the panelists have any background as a criminal.  Each represent a segment of society that intellectually is connected with and perhaps understands “white collar crime”, but none are “white collar criminals.”  Therefore, they see things from their perspective but have no practical experience in showing others how to deter crime.  See the list below and then ask yourself, how could any of these folks really identify with the commission of a crime and therefore how to prevent it?

The symposium, held by the Charleston Law Review and the Riley Institute at Furman University, took place Thursday and Friday in downtown Charleston. It included a keynote address by the founder and executive director of the Equal Justice Initiative based in Montgomery, Ala., as well as a series of panel discussions by scholars, judges, lawmakers, lawyers and public advocates.

‘Like the Whac-A-Mole game’

For example, in 2000, the FBI reported that the number of suspicious mortgage fraud cases was 3,515. By 2008, that number had risen to 63,713. Even eliminating false alarms, the numbers are growing at an enormous rate, said Daniel V. Dooley, CPA and a former senior partner with PricewaterhouseCoopers.

“This trend is staggering,” Dooley said. “This is like the Whac-A-Mole game.”

COMMENT #2: Why is this trend up?   To someone who has been involved in white collar crime the answer is obvious.  From 2000 to 2008 we experienced unprecedented economic growth.  Everything was financially rosy.  We acquired more debt.  We lived more extravagant lifestyles.  We created a larger life illusion.  Therefore, two things were present to fuel the white collar crime growth: (1) more money to steal; and (2) greater need (the first component that exists for the creation of a white collar crime).  The crimes have always been there, its the economic decline that has caused them to come to the surface.  Think of white collar criminal as fish (bottom feeders if you will).  When the water is high you don’t see them.  They are there all right, but out of sight.  But in a drought when the water level recedes they come to the surface.  In an economic recession, when the money recedes you see white collar crime come to the light.  The principle is easy.

In a recent paper, Dooley and Mark Radke, a former SEC official and partner with Dewey & LeBoeuf, wrote that this can be a big challenge to the argument that lengthy prison sentences deter fraud.

“Most financial criminals don’t think about it, and they don’t think they’ll get caught,” Dooley said.

The 150 years in jail that Ponzi schemer Bernie Madoff received will likely deter only him from committing similar fraud, Dooley said, and even those who consider they might get caught know that they might have a decade or more to live off ill-gotten gains before anyone notices.

COMMENT #3: Will the long prison sentence deter the crime.  Well with Madoff getting 150 years and a fellow from Maryland sentenced in Texas to 99 years for a $10 million crime – folks are taking notice.  But, Dooley is right.  Most white collar criminals don’t think they will get caught.  Why?  First, once you have satisfied your NEED…you begin to RATIONALIZE your behavior.  That’s the tricky part cause if you can convince yourself that you’re not committing a crime – you begin to believe your own ILLUSION (your own lie).  So…if you can help people understand the impact that PERSONAL RATIONALIZATION has in the commission of the crime, you likely can begin to prevent the behavior that leads to such an ILLUSION.

Radke thinks the SEC should act less like a prosecuting agency and more like a gatekeeper that could shut down rip-off artists even without a case that could go before a court. He said a lot of the damage that’s being done could be stemmed if the SEC would use its regulatory power to freeze assets and bar fraudulent activity from occurring.

“You don’t have to build a case beyond a reasonable doubt” to act, Radke said.

Assistant U.S. Attorney Rhett DeHart agreed that a more regulatory approach would be helpful in stopping financial criminals, but he said it’s impossible to know if large prison sentences deter the trend of financial fraud because you can’t measure the incidence of someone not committing a crime.

“Who knows whether they deter others or not?” he said. “You can’t measure a crime that’s not committed. I think deterrence may be the least important factor.”

COMMENT #4:  O.K. guys – this is a very nice academic exercise, but beneficial – I doubt it.   So as a start let me provide a list of things that might help to deter white collar crime:

  1. Make it known that you, from time to time, will have random auditors reviewing departments, processes and procedures – and THEN DO IT.  For example, you might have a plant (yes, fake employee) come into a department and test the integrity of workers.
  2. Post examples of folks who have committed a crime and the punishment that they received, and without violating some perceived right – make sure that those who internally violate are known and prosecuted.  If folks feel that their indiscretion will be swept under the table they are more likely to commit the crime.
  3. Self serving statement – but hire someone other than an academic to come in and speak to your folks.  You have no idea the impact it has when employees are faced with someone who committed the crime and then did the time.  I, or folks like me, make it real and the more real you can make it the more someone will think before they take some “white collar crime” action.
  4. Consistently keep the message of “choices and consequences” before them.  With companies I consult with, I often find that different mediums shared frequently has a positive impact.  It is said that a person might see an advertisement seven (7) times before they really consider buying.  If that is true in marketing, then aren’t we marketing good behavior.  Yes…of course so!  So, we need to approach behavior marketing the same as product marketing.  All we are looking for is a positive outcome.

FINAL QUESTION:  Do you think that “white collar crime” can be deterred and if so, how?  YOUR COMMENTS ARE WELCOME!


FBI Mortgage Fraud Investigation – Too Little Too Late? Is This Smoke and Mirrors or the Real Thing?

September 24, 2008

For some time I have been writing and speaking about white collar crime, business ethics and the issue of mortgage fraud.  Then we have the issues that have surfaced over the past several weeks culminating with the President’s address tonight.  A major recession (I’d call it a depression) is facing us if we don’t do something now.

Now just may be too late.  Many individuals and firms have either gone under or become the target of a massive FBI investigation into mortgage fraud over the past several years.  But at the heart of this entire mess is the government and their failure to provide oversight and accountability.  It seemed that a robust economy balanced on the back of home ownership was more important than practical long term ethical decisions that fall on the backs of our elected officials.  (And for anyone who feels that I am leaning one way or the other politically – I feel there is plenty of blame for all elected officials).

Now we find in published reports that the FBI is expanding it’s investigation of major institutions whose names have been at the heart of the meltdown we are today witnessing.

According to CNN:

The FBI is investigating Fannie Mae, Freddie Mac, Lehman Brothers and AIG – and their executives – as part of a broad look into possible mortgage fraud, sources with knowledge of the investigation told CNN Tuesday.

Two officials with knowledge of the FBI investigation into the mortgage crisis said “the investigation is all very preliminary”. They said there is a lot of anger and people want someone held accountable.

Officials are looking into whether any criminal activity occurred, but the Bureau said the investigation will take some time. They said the investigation is in the preliminary stages, and so far it is a broad look at the companies involved.

“From what I’ve seen so far, I really don’t believe we’re going to find widespread fraud,” according to one of the officials. They said they have to go where evidence and facts lead. Just because an investigation has been opened doesn’t mean there will be charges.

Trust me – there will not be charges.  The FBI investigation (done by well meaning people) is just a political smoke screen so that those who want accountability will feel that something is being done.  Frankly, nothing substantive will be done to hold those most accountable for this financial failure responsible.

As reported in my prior blog entries, FBI Director Robert Mueller told Congress that 1,400 individual real estate lenders, brokers and appraisers are now under investigation in addition to two dozen corporations.  What is of most interest is that the focus is on small time fish and a big sea of corruption.

Greenspan told Congress sometime in the recent past that something must be done with Freddie Mac and Fannie Mae or we would face a meltdown and grave financial crisis.  His prediction has come true.  What’s sad is that our politicians from both sides of the isle did not have the fortitude to step up and do the right thing.  Rather, they buried their head in the sand and now find that they are drowning in a sea of financial misfortune.

ENRON’s leaders were held criminally liable for their financial misdeeds.  This collapse makes the ENRON mess pale in comparison.  Yet, since government backed Freddie Mac and Fannie Mae are at the heart of the problem – both backing poor loans and selling them to the market – there will be nothing criminal to come from this.  The government doesn’t have the will or courage to regulate itself – nor the ethical wisdom to do what is right.

Cynical – well not really.  Practical – yes.  This $700 billion dollar plan will in the end cost $3 TRILLION…just wait and see.  Meanwhile, there is a long winter ahead and the chill we will feel won’t just be the weather.

QUESTION:  Do you believe the FBI will find anyone in any major institution recently names held criminally liable?


Mortgage Fraud Crisis and House Stealing – How Widespread is the Criminal Activity?

March 31, 2008

Over the past several months I have written a number of blog articles about the consequences of what appears to be rampant mortgage fraud – especially in the subprime lending arena.

A wonderful article was written a week or so ago by Robert Schmidt, writer for Bloomberg.com. The article appears in full here. In the article Schmidt writes:

The U.S. Justice Department is conducting a broad review of the subprime lending crisis to see if there is a “larger criminal story” to the mortgage meltdown, Attorney General Michael Mukasey said.

Mukasey said the agency hasn’t decided if the turmoil merits a response similar to the Bush administration’s corporate fraud crackdown that began in 2002 after the collapse of Enron Corp. Still, he told reporters in Washington today, the department’s criminal division is now weighing how to address the issue.

“We’re considering information that’s coming in and possible legal theories,” Mukasey said. “People are looking at the law to see to what and to whom it might apply.”

The FBI, the Justice Department’s investigative arm, announced earlier this year it was investigating 14 corporations for possible accounting fraud related to the mortgage rout; the number now is almost 20. The collapse in the credit markets has forced people from their homes, shaken Wall Street and become a major issue in Congress and the presidential campaign.

In the White Collar Crime Blog the question has been asked if Mukasey will appoint a Mortgage Fraud Task Force much like the Corporate Fraud Task Force that was set up after the Enron – Worldcom – scandals? According to a report from the New York Times, “LAST month, almost 225,000 properties in the United States were in some stage of foreclosure, up nearly 60 percent from the period a year earlier, according to RealtyTrac, an online foreclosure research firm and marketplace.”

As a white collar crime and business ethics speaker, I have seen a dramatic up tick in the number of requests for information about this form of white collar crime. It seems that every week there is a new form of fraud revealed.

On March 25, 2008 the FBI issued an interesting article on one of the latest scams: HOUSE STEALING. The report reads as follows:

What do you get when you combine two popular rackets these days—identity theft and mortgage fraud? A totally new kind of crime: house stealing.

Here’s how it generally works:

… The con artists start by picking out a house to steal—say, YOURS.

… Next, they assume your identity—getting a hold of your name and personal information (easy enough to do off the Internet) and using that to create fake IDs, social security cards, etc.

… Then, they go to an office supply store and purchase forms that transfer property.

… After forging your signature and using the fake IDs, they file these deeds with the proper authorities, and lo and behold, your house is now THEIRS.

There are some variations on this theme…

… Con artists look for a vacant house—say, a vacation home or rental property—and do a little research to find out who owns it. Then, they steal the owner’s identity, go through the same process of transferring the deed, put the empty house on the market, and pocket the profits.

… Or, the fraudsters steal a house a family is still living in…find a buyer (someone, say, who is satisfied with a few online photos)…and sell the house without the family even knowing. In fact, the rightful owners continue right on paying the mortgage for a house they no longer own.

It can get even more complicated than this, as we learned in a recent case out of Los Angeles that we investigated with the IRS. Last year, a real estate business owner in southeast Los Angeles pled guilty to leading a scam that defrauded more than 100 homeowners and lenders out of some $12 million. She promised to help struggling homeowners pay their mortgages by refinancing their loans. Instead, she and her partners in crime used stolen identities or “straw buyers” (people who are paid for the illegal use of their personal information) to purchase these homes. They then pocketed the money they borrowed but never made any mortgage payments. In the process, the true owners lost the title to their homes and the banks were out the money they had loaned to fake buyers.

So how can prevent your house from getting stolen? Not easily, we’re sorry to say. The best you can do at this point is to stay vigilant. A few suggestions:

If you receive a payment book or information from a mortgage company that’s not yours, whether your name is on the envelope or not, don’t just throw it away. Open it, figure out what it says, and follow up with the company that sent it.

From time to time, it’s also a good idea to check all information pertaining to your house through your county’s deeds office. If you see any paperwork you don’t recognize or any signature that is not yours, look into it.

House-stealing is not too common at this point, but we’re keeping an eye out for any major cases or developing trends. Please contact us or your local police if you think you’ve been victimized.

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If you think you’ve been a victim of mortgage fraud, feel free to comment and keep in mind report in appropriate activity to law enforcement.


National Century Financial Enterprises Executives – GUILTY – in $3 Billion Securities Fraud Scheme!

March 16, 2008

It is true – every choice has a consequence! That statement holds true in every choice you make in life. Just like gravity, you can’t avoid the consequences of choices that you make. Now, don’t misread that statement – consequences don’t alway mean “bad” – they are just consequences. Your choices can create – Negative Consequences or Positive Results. By your choices you decide.

The Columbus Dispatch reported that after a day and a half of deliberation, the jury of eight women and four men came back with a determination of “guilty” for every one of the 40 charges against two of the Dublin company’s founders and three of its former executives.

 

donald-ayers.jpg

In the case of Donald H. Ayers, age 71, of Fort Meyers, Florida – Rebecca S. Parrett, age 59, of Carefree, Arizona – Randolph H. Speer, age 58, of Peachtree City, Georgia – Roger S. Faulkenberry, age 46, of Dublin, Ohio – and James E. Dierker, age 40, or Powell, Ohio – the choices they made as officers of National Century Financial Enterprises have yielded what will be a certain unpleasant consequence – likely time in federal prison.

Based on charges of conspiracy, fraud and money laundering, the jury returned the guilty verdict on all charges contained in a 27-count superseding indictment stemming from a scheme to deceive investors about the financial health of NCFE. The company, which was based in Dublin, Ohio, was one of the largest healthcare finance companies in the United States until it filed for bankruptcy in November 2002.

“This case is one of the largest corporate fraud investigations involving a privately held company headquartered in small town America,” said Assistant Director Kenneth W. Kaiser of the FBI Criminal Investigative Division. “The FBI continues to leverage its corporate fraud expertise gained through large-scale investigations such as Enron and WorldCom, to ensure that corporations represent their true health. From Dublin, Ohio, to Houston, Texas to New York, New York, the message is clear that the FBI will not stand by as corporate executives manipulate their financial statements and conceal illegal activities from criminal and regulatory authorities.”

According the the news release from the US Attorney’s office:

The government presented evidence that the defendants engaged in a scheme to deceive investors and rating agencies about the financial health of NCFE and how investor monies would be used. Between May 1998 and May 2001, NCFE sold notes to investors with an aggregate value of $4.4 billion, which evidence presented at trial showed were worth approximately six cents on the dollar at the time of NCFE’s bankruptcy in November 2002.

NCFE presented a business model to investors and rating agencies that called for NCFE to purchase high-quality accounts receivable from healthcare providers using money NCFE obtained through the sale of asset-backed notes to institutional investors. The evidence at trial showed that NCFE advanced money to health care providers without receipt of the requisite accounts receivable, oftentimes to healthcare providers that were owned in whole or in part by the defendants. The evidence further showed that the defendants lied to investors and rating agencies in order to cover up this fraud.

Small hospitals, nursing homes and other health care providers sold their accounts receivable to the company, usually getting 80 or 90 cents on the dollar, rather than waiting for insurance payments. National Century then collected the full amount of the payments.

The evidence at trial showed that NCFE concealed from investors the shortfalls produced by this fraud by moving money back and forth between accounts, fabricating data in investor reports, incorporating false information into the accounting system, and making other false statements to investors and rating agencies. Moreover, the defendants’ compensation was tied to the amount of money they advanced to healthcare providers and those providers’ outstanding balance owed to NCFE. The government presented evidence at trial that showed that the defendants knew that the business model NCFE presented to the investing public differed drastically from the way NCFE did business within its own walls and that NCFE was making up the information contained in monthly investor reports to make it appear as though NCFE was in compliance with its own governing documents.

“These convictions send a clear message to corporate America that executives will be brought to justice for lying to investors and misrepresenting the actions taken in their normal course of business,” said Deputy Attorney General Mark Filip, chairman of the President’s Corporate Fraud Task Force. “These are the latest successes in our efforts to improve the integrity of our financial markets.”

“By holding accountable those who break the law, today’s convictions help restore some of the faith and trust the public loses every time corporate executives defraud their investors. The jury’s verdict demonstrates that the public will not stand by while company executives commit billion dollar frauds, leaving the honest investors to bear the losses they create,” said Assistant Attorney General Alice S. Fisher.

Facing millions of dollars in fines and up to 140 years in prison, the corporate officers found guilty here will have time to reflect on the choices they made and the consequences that follow.

White Collar Crime and Business Ethics Speaker – Today, I speak to groups nationwide about Choices and Consequences. Do your employees make the best choices for your company—or for themselves? Are you ready for some straight talk about success, choices, and ethics from a business executive who lost it all…and gained more than he could ever imagine?

In an unusually vulnerable style, I explore the decisions we make through the veil of honesty, integrity, and ethics. Your audience will be touched by this personal story and poignant lessons. Having been where the guilty executives above are going, I know first hand the pain caused by poor choices and practical ways to avoid making poor choices.

For information about my presentations, visit my website – www.chuckgallagher.com

Your comments on this blog are welcome!


Enron – Three British Bankers Sentenced to Prison for Andrew Fastow Conspiracy!

February 23, 2008

David Bermingham, 44, Gary Mulgrew, 45, and Giles Darby, 44, the so-called “NatWest Three” were sentenced to thirty-seven month prison terms. The three former British investment bankers for NatWest Bank who were charged for their role in helping former Enron CFO Andrew Fastow dress up the company’s balance sheet.

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According to a BBC article, they admitted conspiring with ex-Enron staff to defraud NatWest of $19m and then split $7m between themselves. The men they conspired with – Andrew Fastow and Michael Kopper – who are already in jail. According to the charges brought by prosecutors, the three men advised their former employer, NatWest, to sell part of a firm owned by Enron for less than it was worth. The three men then left the bank and bought a stake in the Enron-owned company, before selling it on at a higher price for a profit.

Enron, once the nation’s seventh-largest company, crumbled into bankruptcy in December 2001 after years of accounting tricks could no longer hide billions in debt or make failing ventures appear profitable. The collapse wiped out thousands of jobs, more than $60 billion in market value and more than $2 billion in pension plans according to reports by the Houston Chronicle.

Attorneys for the men asked that they be ordered to a federal prison in Allenwood, Pennsylvania. Allenwood has experience in the Department of Justice’s International Prisoner Transfer Program. If confined in the United States, they would be required to serve at least 85% of their sentence. However, if transferred to a prison in Great Brittain their sentence might be complete at the 50% point. Either way, all three will have direct time in federal prison.

According to the White Collar Crime Prof Blog ( a great source for white collar crime information): Among the criteria considered for authorizing a prisoner transfer are acceptance of responsibility, criminal history, seriousness of the offense, and ties to the two nations. Also considered is whether the prisoner will remain in the home country or return to the United States — rest assured, the NatWest Three are unlikely to darken our shores again any time soon. In addition, according to the Bureau of Prisons Policy Statement on transferring foreign prisoners, the transfer cannot be authorized until the prisoner pays any outstanding fine. In addition to the sentence in this case, U.S. District Court Judge Ewing Werlein ordered the three to repay the $7.3 million they received from the transaction that triggered the charges. While not a fine but restitution, I suspect there won’t be a transfer until that money is repaid. Even then, the application process will take at least a few months to complete ,once they begin their prison terms, as the bureaucracy processes the requests.

Every choice has a consequence! As an ethics and white collar crime speaker, I share that simple five word statement with groups nationwide. So often you find people – from all walks of life – make choices that, to them, seem right at the time – only to find out that the consequences of their actions are far worse than they ever imagined. I imagine this has been true for these three Brits! Not only have they been stuck in Houston for the past three years, but it looks like they will surely taste federal prison for a while.

What did they gain? Nothing! And, that is often the case when it comes to poor choices. The consequences of the choices we make can be far more significant than the short term benefit that one might think you’ll receive.


There’s No Such Thing As Business Ethics – Yea, Right – Ask Jeffrey Skilling!

November 15, 2007

I’ve heard that statement, “There’s no such thing as business ethics!” said way too many times.  The arguement is that businesses don’t have ethics – people do.  Therefore, there is no such thing as business ethics.

As a motivational speaker addressing corporations and associations on business ethics from coast to coast – my response is – Bull! 

If that is true (there is no such thing as business ethics) then the appeal by Enron CEO Jeffrey Skilling of his 24+ year prison sentence is doomed.  Seems that Skilling and his legal team are relying (in part) on the Fifth Circuit’s decision in U.S. v. Brown that limited the “right of honest services” theory when the defendant believes he or she is acting in the corporation’s best interest as defined by management.  In simple terms, if the corporate employee is acting in the corporations best interest or under the direction of management, then they can’t be guilt of “fraud”.

According the the White Collar Crime Prof Blog (http://lawprofessors.typepad.com/whitecollarcrime_blog/)    “The government argues that Brown does not apply because it is limited to lower-level employees and not a CEO who it describes as the leader of the fraud.  The problem with that argument, however, is that Brown does not seem to create a “CEO exception” to its analysis of the applicability of honest services fraud theory in a private setting in which the company is the victim of the fraud.”

There are numerous legal issues at play and not the prime subject of this blog.  Rather, in laymans terms…Skilling was found guilty of (simply put) unethical conduct – fraud, consispracy, etc.  Skilling was guilty because, as CEO, he acted in a manner that was unethical and costly to those who placed there confidence in he and Enron senior management. 

Personal ethics only…?  No such thing as business ethics?

Simply stated, looking at the complex legal arguements in Skilling’s appeal and the governments response – the arguement seems to strongly indicate that businesses have a legal existence and “soul.”   If I’m acting at the direction of management then the “honest services fraud theory” would apply.  Business ethics 101 as far as I can see.

After each Business Ethics keynote speech I give…there is at least one who just has to say that business ethics doesn’t exist.  I do understand where they are coming from.  Yet, most every business I encounter has a culture – a spirit if you will.  And, that spirit, soul or corporate culture is the foundation of that enterprises – business ethics.

Not only is there business ethics – but it is now, as best as I can see, becoming part of legal defense against fraud, etc.

Interesting.  Your opinion?


Success and Ethics – Can They Co Exist?

November 11, 2007

In today’s world there is a wide gap between success and ethics. Ethics violations seem to have dominated the news over the past five year. From Enron, to Worldcom, to a Wal-Mart VP, to Martha Stewart, everywhere we turn we seem to be bombarded with the faces of “successful” people who have been vexed with ethical issues and suffered the consequences. They certainly were not the first nor will they be the last examples of the consequences of unethical behavior.

The big question that seems to go unanswered is what happened? What happened that caused these people to choose unethical behavior? Were they naturally unethical? Was it the desire for more money too great? Were they inherently “bad” people? Were they ignorant of their own value system?

To understand success and ethics, we must first examine the two so take a minute and think about success. Write your thoughts down on paper. There is no right or wrong answer, just your thoughts. Take your time and make your notes on paper. What does success mean to you? Is it the accumulation of material wealth? Is it being happy? What makes you happy? Is success measured in your life by the lessons learned on life’s journeys? Is success, for you, that you tried or is it that you achieved? Does success come from a disciplined life? How was success modeled for you in your home?

Now, let’s think about ethics. Close your eyes for a moment and think about what ethics mean to you. When you return to reading, write your thoughts down. Do you believe the you were born inherently good? How did you learn ethics/values? Were they taught to you by your parents, church or school? Were they taught to you at all? Was what you were taught exemplified in your environment at home, school or church? Would you be willing to compromise your ethics for success? Are you successful because of your ethics? How do you feel when you operate apart from your sense of ethics?

I was adopted at birth by my parents. My adoptive father died when I was two years old and my mother became a single parent which created in it some financial woes. My mother worked hard to feed and clothe us. I grew up in the projects. My mother always said to hold your head high and be somebody and when I grew up I would be somebody.

When I grew up I went to college and received my masters in accounting and became a CPA. Success to me meant having a lot of money, a beautiful home, a Mercedes, and all the benefits that go with wealth. I achieved it. I had it all. I was happy. I had a wife, two children. I was highly respected in the community. My articles were published in accounting journals. I traveled throughout the country teaching accounting seminars. I couldn’t be happy.

Ethics? At that time, I didn’t think much about them. I did what I thought was morally right. I went to church. I was even the music director. I was an embezzler. I didn’t give much thought to it as I was just “borrowing” from one client and replacing it with another client’s money. However, I wasn’t asking their permission. As is true in most cases where unethical behavior reigns, it fell apart around me. I ended up in Federal Prison, which, I am grateful to say, became my wake-up call.

During my prison time I evaluated the success at the cost of ethics. I evaluated what success was, and I came to understand that I manifested the illusion of success compounded by unethical behavior resulting in negative consequences. I came to understand that success or being somebody began inside myself. It was who I was regardless of the environment I am in. Success, for me, became the positive choices I made and how I lived my life throughout its journey. The external manifestation of success then came about because of my ethical choices. I left prison and became gainfully employed. Now, 11 years later, I am an executive in a publicly traded company and an international keynote speaker.

It took for me prison time to clarify for me what success and ethics are and that they can co-exist if you choose to allow them to co-exist. I found success with integrity. I chose not to compromise ethics for success. The journey has its ups and down, but I walk it with my head held high looking forward to the future.

Success is best measured by the choices we make on the journey of life. It is not only the attainment of material items, but also it is the process of attaining those items. It is how we treated ourselves and others on that path. It is the decisions we make on the journey to choose right or to choose wrong. It is what we do with the outcome or the consequences of our decision. Success and ethics can co-exist and must co-exist to be truly successful. It is when they do not co-exist that problems occur.

Have you ever found yourself in a situation where you were tempted to compromise your integrity and honesty for success?

Every choice has a consequence. You might not see it immediately, and some feel that there might not be a consequence. Just because the consequence doesn’t materialize immediately doesn’t mean there are no consequences as there are consequences for everything that we do. If you want positive results, than choose the right path. When all is said and done, the materials of success can be taken away from you, but they can never take away your integrity. It is never too late to choose the integrous (ethical) pathway. The rewards are amazing and I am living proof of it.

What are your thoughts?