Montreat College takes the Ethical High Road! Business Ethics Speaker Chuck Gallagher explains

January 7, 2010

Administrators at Montreat College, according to The Asheville Citizen-Times, said this week that they would help cover student loans taken out by more than 50 master’s-degree students at the North Carolina institution who were told by outside recruiters that the federal government would forgive their loan debt up to $17,500 each.

Many of the students whom the recruiters said would be eligible for loan forgiveness were in fact ineligible because they were neither secondary-school mathematics and science teachers nor special-education teachers at elementary and secondary schools. The recruiters, who worked for a private company hired to recruit for the college’s adult-education programs, had told the students that they would receive government help if they pursued an M.A. in education at Montreat.

President Dan Struble, Montreats leader, met with teachers Monday night telling them the college would aid them with the costs they’ve incurred in the program.  “Clearly, this is a challenge to our reputation,” Struble said. “We want to be who we say we are and that means meeting every student’s situation.”

According to the Asheville report:

Montreat contracted with Arizona-based Institute for Professional Development in 1994 to build its adult education program.

IPD recruiters representing Montreat have visited numerous schools in Western North Carolina in recent years advertising a masters program in K-6 education.

Many teachers who enrolled said recruiters told them they were eligible for loan forgivenes because they were highly qualified math, science or special education teachers at Title I schools.

Neither Struble nor officials at IPD’s parent company, the Apollo Group, have said why recruiters distributed material suggesting students in the K-6 program qualified for loan forgiveness.Sara Jones, a spokeswoman for the Phoenix-based Apollo Group, said her company would work to resolve the students’ complaints and review the recruitment issues.

While the final loan forgiveness assistance help is not fully finalized, positive moves are being put in place to hear the students concerns and take appropriate action.  This is ethics in action…and as a business ethics speaker to colleges and universities I find joy in reporting on positive applications of ethics vs. reporting on ethical breaches.

COMMENTS WELCOME!


Bernie Madoff – The Human Tragedy. Is Compassion Possible?

March 14, 2009

At the end of the movie – Saving Private Ryan – Ryan, as an old man speaks these words to his wife who walks up to his side:

“Tell me I’ve have led a good life.  Tell me I’m a good man.”

I must say that, although I’ve seen that movie many times, I am always brought to tears.  I am touched knowing that others come into our lives for a reason and, through their efforts, we find that our lives are shaped.  In Ryan’s case, his concern was living up to the sacrifice made for him and on his behalf.  Ryan wanted to know if the life he lived and the legacy he left was worth the price.

As the movie ended, I could not help but feel sadness for the tragedy that came to light some four months ago when Bernie Madoff admitted that his work wa nothing but a ponzi scheme.  As those words were spoken – lives were changed and, at least for now, not for the better.  The reality of lost investments came to light, financial futures were changed and Madoff’s legacy was forever etched in history.

THE HUMAN TRAGEDY:

From the standpoint of those who were victimized the loss is great.  But the tragedy goes much deeper than lost money.  I do not wish to minimize the loss bernie-madoffof treasure, but it is – afterall – just money.  Money can be made and often is lost.  The question is how do we react to that loss?

I heard one of Madoff’s victims on a radio clip Thursday the day Madoff was sentenced.  She said, “My life is over…”  I cringed when I heard her comments.  I, too, (admittedly for different reasons) lost everything material.  I know the feeling of loss and despair, but LIFE IS NOT OVER.  In fact, while life will most certainly change, she still has her freedom and the ability to make choices to improve her life.

One part of the human tragedy is the natural feeling of anger that lost trust naturally brings.  That anger and the negative emotion that is a part of what we hear about Madoff does little to promote joy and healing.  Perhaps over time that will come.

There is grief over loss.  In this case the loss is not only the obvious – the investments that didn’t exist, but the grief over loss is the trust that forever is gone.  Many people have come to learn the pain of betrayed trust, and that is hard to heal from.  As I have talked with victims from other similar scams, many have said that they have a hard time trusting anyone.

MADOFF’S LEGACY:

Beyond the victims, I have to say that I feel for Madoff.  I do not condone his actions – they are abhorent.  But, I feel for the man.  Imagine for a moment the feeling inside as Madoff once again crawls into his prison bed.  As a child, as a teen as a young man, never would he have imagined that the end of his life would be spent in prison.  In his early years he was able to use his intellect to benefit others and himself.  Madoff is not dumb and certainly has a vast compentency.  Unfortunately, he elected to miguide his brilliance.

Again, at the risk of offending his victims, I do not express my feelings for Madoff in support of his actions.  He has earned every night he spends in prison.  The empathetic feelings I have are for him as a human being.  How tragic that his actions have not only hurt those whom he was entrusted with investments, but his actions have harmed his family and others closely connected to him.

As a human being, it is difficult to find your life relegated to the structure and environment of prison.  Here’s a man who has a brilliant mind, who now will wake at 6ish each day, eat prison food at designated times and eat only what is offered.  He will eventually be assigned a location which will likely be a medium to minimum security facility.  It is NOT “Club Fed” – the days are filled with counts, structure and work.  You quickly lose the feeling for the outside world as contact is kept to a minimum and while you may read the newspaper, you find that reading or TV is no replacement for contact that free people have with each other.

As time goes on as he languishes away in prison, those close to him will die – but, he’ll find himself disconnected.  He will have gone from high flying financier to just another inmate.  He will withdraw for his own protection finding that the culture in federal prison is something foreign to him.  He will hear and learn things that will repulse him and there will be those who will leach on to him hoping to make him their prey.  Perhaps, they might think, “If I can threaten or endanger him, I might get some money for my family on the outside.”  He may become a target or he may just fade into oblivion.

For a time, he will continue to have notoriety as the federal government seeks to unravel the true scope of his actions.  Did his wife and/or children know?  Were they involved?  Was his accounting firm in the know or where they just incompetent?  How was he able to maintain the grandeur of his illusion for so long?  These questions and many more will arise – but all the while, the human tragedy is that someone – Bernie Madoff – through his choices is ending his life sitting in a prison cell.

Beyond Madoff – for a moment – imagine being one of his children, grandchildren or greatgrandchildren – the name Madoff is tainted.  He will be remembered for his crime – for the effect he had on the lives of thousands who trusted him – for his last days spent in prison.  If you were a grandchild – think of what happens when you enter college and for the first time the teach calls the role.  When they get to your name and say “Madoff” – think of the looks you’ll get when folks quickly begin to wonder – “is he connected to that guy”?   Their lives have been changed forever as well – and not by their doing.

Charles Ponzi created this scheme.  The name “Ponzi” is forever associated with something negative – just like the name Hitler.  As we live our lives today, the same is true with “Madoff” – his name has been etched in history never to be associated with positive thougths.

FINAL THOUGTHS:

As a business ethics and fraud prevention speaker, I know what it must be like for Madoff – this his first weekend in prison.  While I wish I could say otherwise, I know because I’ve been there.   I earned my time there.  It was no fun, but punishment is a consequence of choices.  My choices led me to prison, and Madoff’s have led him there as well.

Perhaps, when the dust settles, we can all take a moment and, like Private Ryan from the movie, ask “have I led a good life?”  I pray when my life ends that I’ll be able to look back and see a life well lived.  I wonder though for Madoff if it is possible for people to find compassion while at the same time accepting that his life is prison is a clear consequence for the choices he made?

YOUR COMMENTS ARE WELCOME!


And the Fraud Begins – Gordon Grigg and his firm, ProTrust Management Inc. Charged with Securities Fraud – I Shall Call Him “Mini Madoff”

February 3, 2009

In tough economic times fraud will rise!  And with government funds flooding the markets to stimulate the economy, there is no doubt that some will see this as an opportunity to – well take advantage of an unregulated environment.  That seems to the be case with Gordon Grigg of Nashville and his firm, ProTrust Management Inc.

According to the Associated Press – “Federal regulators on Wednesday charged an investment adviser with securities fraud, saying he bilked clients of at least $6.5 million in the first scheme using the government’s $700 billion financial bailout program as a front to lure investments.”

Need, opportunity and rationalization – these are the three components of fraud – white collar crime.  And while a person is considered innocent until proven innocent, it would seem that there is enough evidence to cause the Securities and Exchange Commission to obtain a court order freezing the assets of Gordon Grigg of Nashville and his firm, ProTrust Management Inc.

It would seem that based on the information thus far that Grigg could be called “Mini Madoff.”  No he might not have yet created a Ponzi scheme, but it does seem it was headed in that direction.

The Associated Press reports:

Grigg represents himself as a financial planner and investment adviser, but neither he nor his firm is registered with the SEC or a state regulator, the agency said in its civil lawsuit filed in federal court in Nashville. The SEC said that Grigg, who obtained control over funds of at least 27 clients, falsely claimed to have invested their money in securities described as “private placements,” creating phony account statements.

BE AWARE:

One of the first indications of fraud is when the investment advisor says – he/she has something that is “private” something that no one else has – something that is special.  Madoff had something special – and now it seems so did Grigg.  Only in both cases it appears that neither was true.

According to the SEC, Grigg began falsely claiming that his firm could invest client funds in government-guaranteed commercial paper and bank debt as part of the federal TARP program. His claims also included that he had partnerships and other business relationships with several leading U.S. investment firms.

Grigg and his firm “preyed upon investors’ desire for safety by claiming associations with reputable investment firms and the government’s TARP program,” Katherine Addleman, regional director of the SEC’s Atlanta office, said in a statement. “Investors should carefully check any purported affiliations. In this case, not only were such claims false, but there is in fact no program in which investors can buy debt guaranteed by the TARP program.”

THE VICTIMS:

As reported in the Charolotte Observer – “Davidson resident Steve Wieland has prayed with Gordon Grigg, invited the former Charlotte resident into his home and trusted him enough to let Grigg’s company invest his life savings.  Wieland, 59, a disabled former pilot who flew for US Airways for 25 years, said he lost $252,000, the bulk of his life savings.

“You read about this happening in the newspaper. But when it happens to you, you go, ‘Oh my God, how do I recover,’” Wieland said. “I can’t. I’m done.”

Grigg’s alleged fraud started in 2003 and according to reports – ProTrust also was subject to a cease and desist order in North Dakota in 2006 for allegedly selling nonexistent securities, records show.

THE PIT – THAT HOLE THAT INVESTORS FALL INTO (AND DON’T RECOVER FROM):

As a fraud prevention expert and business ethics speaker, I am often asked how is it that people get suckered into investments like this?  I wish I could say it was difficult.  But from experience that cost me time in prison – I have to admit it is easy.   More times that not the scammed investors fall into what I have referred to as the PIT.

But here is what Mr. Wieland had to say, “I gave my money to a ‘friend’ instead of doing my research,” Wieland said. “Never do that. I don’t want anybody else to lose any more money.”

P – first there is the “promise” that the investor can get something that is special – something that the average person can’t get.  That “something special” is the allure of a better return – or something that gives one a chance at the gold at the end of the rainbow.  The fraudster plays on that emotional need.

I – second there is the “illusion.” In Grigg’s case – he claimed to have “private placements.”  That was supported by false and fraudulent account statements reflecting client ownership of the non-existent securities.  The false information is part of the illusion.  When you see it on paper or on the web in a fake account, you are lulled into believing it’s truth.

T – the final part is the all important aspect of “trust.” As stated in the Charlotte Observer article – “Steve Wieland has prayed with Gordon Grigg, invited the former Charlotte resident into his home and trusted him enough to let Grigg’s company invest his life savings.”  Ah…there’s that word – TRUST. Bernie Madoff had it, Gordon Grigg had it and so did I.  And in each case the abuse of trust was a key factor in a fraud taking place.

THIS STORY ISN’T OVER:

There is more to this story and likely many more victims.  I feel for them and hope that this writing might alert others to the importance of due diligence when investing.  Grigg, if convicted, will spend time in Federal Prison where he’ll have ample opportunity to think about this choices and the consequences that follow.  As I speak nationwide on ethics and fraud prevention – the first words out of my mouth are – “Every choice has a consequence.”

YOUR COMMENTS ARE WELCOME!


Jamal Nayfeh – Associate Dean for U. of Central Florida Faces Fraud and Theft Charges. White Collar Crime Knows No Boundaries.

February 2, 2009

One of the worst things that organizational executives face is the possibility of adverse publicity.  All manner of effort is placed on making effective decisions that produce positive results and publicity that promotes the organizations mission.  But, one thing that cannot be controlled is the choices that our employees make.  Needless to say, organizations must face the very real possibility that employees may make less than effective or ethical decisions.

In the case recently reported from the University of Central Florida – an associate dean  in the College of Engineering has been arrested ajamal-nayfehnd charged with grand theft.  Jamal Nayfeh is facing fraud and theft charges after he allegedly charged $40,000 worth of home electronics to a university-issued credit card and tried to conceal the purchases from the university, The Orlando Sentinel reported.

MOTIVATION:

As a white collar crime expert – speaker and fraud prevention consultant – the question always arises – what would motivate such behavior?  Nayfeh purportedly had the equipment installed in his $900,000 dollar home located in the gated and secluded community of Seminole Woods in Geneva.

There are three components of fraud:  (1) need; (2) opportunity and (3) rationalization.  I can’t speak to need or rationalization, yet, those two components are necessary parts of fraud.  Regarding “opportunity” – unfortunately the University of Central Florida created that with the all too easy issuance of a university issued credit card.  According to Fox News – UCF spokesperson Grant Heston says Nayfeh and other employees with the college credit cards had to sign an agreement promising to only purchase goods for the schools use.

PREVENTION:

Good people, people who you would never suspect, can be tempted and make choices that have very serious consequences.  A university spokesman, Grant Heston, said Mr. Nayfeh was suspended with pay this month after auditors discovered the purchases, made in December. The arrest affidavit says that Mr. Nayfeh gave the auditors an “altered receipt to make it appear that non-taggable business related items were purchased … rather than a home-entertainment system.”

But could such a purported fraud be prevented.  Yes.  While Mr. Nayfeh made the choices that would lead to his arrest, the University provided the opportunity.  This is very much like a similar situation with the Dallas Independent School District where the FBI has under investigation over 90 individuals who misused organizational credit cards.

Let me be clear  – I do not hold the University at fault nor do I hold the Dallas Independent School District responsibile for their employees fraudulent activities.  As a fraud prevention consultant, however, it is practical to observe how the fraud took place.  Had the opportunity not been in place there is a very real likelyhood that the fraud would not have occured.

COMMENTS:

According to a story on WFTV.com:

Nayfeh’s attorney had brokered a deal with UCF police to turn himself in at the Orange County jail as soon as an arrest warrant was produced. That warrant was issued Wednesday afternoon and Nayfeh turned himself in on charges of second-degree grant theft, fraud and credit card fraud greater than $100.

Among the $40,000 worth of items allegedly charged to Nayfeh’s UCF credit card were a home theatre system with an 80-inch screen, high-def projection system and surround sound, 52-inch LCD TVs in each bedroom and racks and racks of high-end audio equipment.

UCF spokesperson Grant Heston said Nayfeh made the purchases in December and had all of that equipment installed in his home. UCF auditors found the purchases after the high-dollar amount was red-flagged.”The individual has been suspended from the university. The legal process is running its course. And our intention now is to be reimbursed to the fullest extent possible,” Heston said.

Every choice has a consequence.  It is fair to be aware that though Mr. Nayfeh has been charged, he is innocent until proven guilty.

COMMENTS ARE WELCOME


Business Ethics and Tutorial Websites Like ‘studentoffortune.com’ – Really?

November 10, 2008

Just like clockwork every day I receive an e-mail from google listing the new content for a selected topic – “Business Ethics” – a topic I specialize in as a speaker. Most days there is something of interest – either a new article, headline or blog posting. But over the course of the past several weeks I have begun to see a new entry in this arena and I must say it caught me by surprise.

Read below – as this is copied from the goole alert that I received in early November 2008. After you read, I’llHigh School Series offer some comments.

$50.00 – Research Paper Business Ethics
Research Paper Needed My topic will be Freddie Mac and the mortgage crisis, government bailout and the ethical impact this had on the nation. Research Paper Requirements 1) Length: 5 – 7 pages (Not including title page and reference
Student of Fortune – Recent Questions – http://studentoffortune.com/

SO WHAT DO YOU THINK?

Maybe it’s just me, but frankly I was amazed. It appeared that “studentoffortune.com” was a brokerage house for – what I would describe as – truly unethical practices. I was shocked. I knew that there were places on line where one might buy papers, etc. for school, but never thought that someone could advertise blatantly for homework “prostitution.”

Well I looked a bit further…and another entry that made the “google” list for business ethics. Hum…

$50.00 – Business Ethics
Has anyone taken a Business Ethics Class, I am totally lost. I do not know how to get the APA references the only reference the teacher wants us to use and I have a paper do. I go to the online library but is finding myself lost.
Student of Fortune – Recent Questions – http://studentoffortune.com/

Wow…

Well maybe this wasn’t what I thought it was until I researched the site. As best I can tell it is promoted as on-line tutorial for money. O.K. I thought. But the idea of a tutorial is help – not someone doing it for them. So, tell me if I’m wrong, but look at this next one – cause what I see is someone buying a paper for $10.00.

$10.00 ECO205 Final Project: Industry Research Completion (Auto Industry)

Q:

Final Project: Industry Research Completion
· Resource: Appendix A
· Due Date: Day 7 [Individual] forum
· Write a 1,750- to 2,450-word paper in APA format that provides an economic profile of
the industry you have researched. In your paper, discuss how the following impact the
industry.
o Shifts and price elasticity of supply and demand
o Positive and negative externalities
o Wage inequality
o Monetary and fiscal policies
· Conclude your paper with final thoughts on:
o How the economy affects the success of your chosen industry
o Economic influences that can affect the industry in a negative way
· Post your paper as a Microsoft© Word attachment.

Attachments:
eco205_appendix_a[1].doc (41K)

Somehow…I see this bastardizing the whole concept of BUSINESS ETHICS.

Would love to have your comments…perhaps some of you see something different than what I see on the surface.

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The Ethics of Change – A Letter To President Elect Barack Obama

November 5, 2008

Today – the day after the election – we, as Americans, have seen yet another historic moment in a life that has seen many. Those of us with some age have seen the end of wars and the beginning of others; we have seen space travel and a man on the moon; we have seen technology change everything about our daily lives; and we have seen a man rise up and break barriers that once were thought to be iron clad. Mr. President Elect – your election may be historic for African-Americans, but, more important, it is historic for all Americans as we see through you a change of attitude and focus – we see hope in your eyes.

With the above said, Mr. President Elect, I must caution, in the midst of celebration, that we not lose sight ofbarack-obama-smiling what got you there and what your task at hand is. President Elect Obama – we must restore a sense of ethics to this great nation and make choices – tough choices at times – based on sound ethical and moral principles that have guided us for so long.

I, of all people, have no right to lecture you on ethics or change – after all, you are our new President elect. But, like you, I know a thing or two about adversity and obstacles. As a former convicted felon (not something I am proud of) now professional speaker, I have risen above my poor choices from the past and become a voice for CHOICE and ETHICS. Regardless of the choices made, we can moving forward make better choices that will bring about positive results.

You said, “it’s been a long time coming, but tonight, because of what we did on this date in this election at this defining moment change has come to America.” Your statement is true…we have turned for too long away from choices that empower people to achieve greatness and focused on what’s wrong and how we exercise our muscle to the detriment of others.

You, Mr. President Elect, are aware of the challenges ahead. Your words reveal it, “For even as we celebrate tonight, we know the challenges that tomorrow will bring are the greatest of our lifetime — two wars, a planet in peril, the worst financial crisis in a century.” You know, as do we all, that the only way to succeed is to do so by making choices founded on the ethical foundation of our forefathers as they founded this great Nation.

I speak on ethics today, founded on the lessons I learned from not living an ethical life. Perhaps, as a Nation, we have not made the best choices – or even ethical choices. The challenges ahead are significant and you, yes you – Mr. President Elect – will be tempted beyond belief, after all you are the most powerful man in the world. Don’t lose your sense of ethics, sir. Remember your promise! “But I will always be honest with you about the challenges we face. I will listen to you, especially when we disagree. And, above all, I will ask you to join in the work of remaking this nation, the only way it’s been done in America for 221 years — block by block, brick by brick, calloused hand by calloused hand.”

Regardless of who authored these next comments you delivered – and delivered well – they form a promise of an ethical foundation for your Presidency.

“So let us summon a new spirit of patriotism, of responsibility, where each of us resolves to pitch in and work harder and look after not only ourselves but each other.

Let us remember that, if this financial crisis taught us anything, it’s that we cannot have a thriving Wall Street while Main Street suffers.

In this country, we rise or fall as one nation, as one people. Let’s resist the temptation to fall back on the same partisanship and pettiness and immaturity that has poisoned our politics for so long.”

Mr. President Elect – we need that foundation that you have stated so well – a foundation of hope and promise and belief that as American’s we can be proud of who we are and what we stand for – that we can be proud to call ourselves American’s here and around the world. You have given us that hope and for that we say – Thank you!

Regardless of political belief, I think we are witnessing the dawn of an new age for America. We will succeed or fail based on the choices we make moving forward. If our choices are based on fear, ego and power, we may find that we will be no better than we have been and perhaps even worse. Those choices and not based on sound ethical principles. On the other hand, if we make choices that foster freedom, opportunity and a spirit of selfless cooperation we might see the dawn of the “Age of Aquarius.”

Let me end with your words…

“America, we have come so far. We have seen so much. But there is so much more to do. So tonight, let us ask ourselves — if our children should live to see the next century; if my daughters should be so lucky to live as long as Ann Nixon Cooper, what change will they see? What progress will we have made?

This is our chance to answer that call. This is our moment.”

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Prostate Cancer Solutions – A New Blog is Formed

November 1, 2008

Some of my collegues have said that I’m crazy – as I’m expending energy to focus on an area that is not a part of my daily livelyhood.  I am a business ethics and sales motivational speaker and trainer.  I am also a prostate cancer survivor!

Because of my speaking and writing, I have elected to be an open book.  That choice has carried into my work with prostate cancer as well.  Because of that and the strong number of people who have contacted me asking questions and seeking help – I have chosen to write a book about not only my experience with prostate cancer but the experiences of literally hundreds of men.

When I was diagnosed I became frustrated at the volume of information, but the lack of credible data from a survivors perspective.  As a result serveral things are happening that may benefit the 280,000 men who this year will be diagnosed with prostate cancer.

One…the book is well underway.  I am still conducting interviews from men who have had treatment for prostate cancer in various forms.  GUYS…I know that it may sound strange, but I need your help.  Your comments (taken confidentially) could save someone else’s life.  So, PLEASE, contact me so I can get your story.  The time you spend with me in this short interview may be all it takes to help another or save a life.

Advance copies of the book can be obtained by contacting me at chuck@chuckgallagher.com

The other major issue is a new blog has been formed devoted strickly to the issues of PROSTATE CANCER.  The blog can be found here and is called:  http://prostatecancersolutions.wordpress.com.

Feel free to visit this blog and take the time to comment.  Every comment has value and together we can create a safe place for men to focus their efforts to beat this dreaded disease.  Your comments and help are greatly appreciated.