White Collar Crime and Criminals - School of Criminal Justice - U of Cincinnati
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I have embedded about a dozen videos on the slides. Click the links to watch the videos......I interviewed Minkow at Lompoc Federal Prison October 22, 1994. Six month later, May 1995, he was my first white collar criminal speaker.
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White Collar Crime and Criminals - School of Criminal Justice - U of Cincinnati
- 1. White Collar Crime and Criminals Gary Zeune, CPA 10356 Wellington Blvd., Suite D Powell, OH 43065 614-761-8911 gzfraud@TheProsAndTheCons.com www.TheProsAndTheCons.com White collar criminal speakers University of Cincinnati School of Criminal Justice
- 2. Barry Minkow, CEO ZZZZ Best ©Gary Zeune CPA 2 Connected with Minkow by accident Read FAKING IT IN AMERICA ($2) A play on Minkow’s MAKING IT IN AMERICA
- 3. Barry Minkow, CEO ZZZZ Best ©Gary Zeune CPA 3 Interviewed Minkow at Lompoc Wrote THE CEO’s COMPLETE GUIDE TO COMMITTING FRAUD
- 4. Gary Zeune CPA 4 Gary Zeune CPA has 40+ years in public accounting, corporate finance, investment banking. He also has the only speakers bureau in the U.S. for white collar criminals. The Pros & The Cons has been profiled in NY Times, WSJ, LA Times, Forbes and numerous other publications. Since 1987 more than 20,000 professionals have attended his classes on fraud, ethics and corporate strategy. He writes extensively and has had more than 20 articles published in national magazines and journals. www.TheProsAndTheCons.com gzfraud@TheProsAndTheCons.com 614-761-8911 ©Gary Zeune CPA
- 5. Barry Minkow, CEO ZZZZ Best ©Gary Zeune CPA 5 Daniel Akst, LA Times Minkow wrote several books
- 6. Barry Minkow, CEO ZZZZ Best ©Gary Zeune CPA 6 Oprah (no known video) 60 Minutes Lennar is a fraud Barry Minkow ZZZZ Best CEO Sentenced to 5 Years Anderson Cooper 360
- 7. Barry Minkow Movies ©Gary Zeune CPA 7 CON MAN 3 minute clip Minkow was sentenced to 5 years for stealing the money to pay for the movie The Dirtiest Con American Greed Yahoo Daily Motion
- 8. Are You a Criminal? ©Gary Zeune CPA 8
- 9. Business Bully It’s my company, I can do whatever I want. True False Why? __________ ©Gary Zeune CPA 9
- 10. 10 Wal-Mart Fake Expenses 1. Vice Chairman and No. 2 executive 2. Submitted fraudulent expenses + illegal gift card use for $500,000 3. Guilty of wire-fraud and tax-evasion 4. Nearly all for personal expenses WHY: Because he could Video: No Jail Time For Former Wal-Mart Executive Thomas Coughlin ©Gary Zeune CPA
- 11. HP CEO Mark Hurd Jodie Fisher ©Gary Zeune CPA 11 If $20,000 is immaterial, why did HP fire Hurd? YouTube: HP CEO Mark Hurd Fired Over $20,000
- 12. 12 Defective Compensation Systems Goal Discongruence Incents Fraud When the ‘system’ puts the decision-maker in a position of conflict. ©Gary Zeune CPA
- 13. 13 Defective Compensation Systems Goal Congruence Incents Honesty When the ‘system’ puts the decision-maker in win-win position. ©Gary Zeune CPA
- 14. Behavior is NEVER Static It ALWAYS Changes ©Gary Zeune CPA 14 WARNING: Anytime You Change a System People ALWAYS Change Their Behavior to Maximize the Benefit Wells Fargo 2 million fake accounts WHY? Changed to defective compensation Q: If management didn’t know the comp system would incent fraud, how is management smart enough to run the bank? Video: Here's how Wells Fargo workers created fake accounts
- 15. 15 Davis-Bessie Nuclear Power Plant Melt Down Over Pay System Siemaszko ©Gary Zeune CPA
- 16. Fraud Information and Surveys 1. ACFE 2014 Report to the Nation 2. EY - 2014 Global Fraud Survey 3. PwC Global Economic Crime 2014 Survey 4. Global Fraud Report - Kroll 5. 2014 AFP Payments Fraud and Control Survey 6. 2013 Deposit Account Fraud Survey 7. 2014 Global Consumer Fraud Survey 8. Financial Fraud and Fraud Susceptibility 9. BDO Not-For-Profit Fraud Survey 2014 10.Fraud Surveys and Report ©Gary Zeune CPA 16
- 17. Internal Fraud Resources 1. Assn of Certified Fraud Examiners www.acfe.com 2. The Shulman Center www.theshulmancenter.com 3. American Society of Employers www.aseonline.org 4. Jack Hayes International hayesinternational.com 5. The Linesch Firm http://standuptofraud.com 6. Marquet Int’l www.marquetinternational.com 7. Join Linkedin.com fraud groups 17©Gary Zeune CPA
- 18. The Corporate Con 18 Cashier CPA Banker Bank Pres Ins Adjuster Ins Agent Bookkeeper Cashier Association of Certified Fraud Examiners $149 ©Gary Zeune CPA
- 19. Dr. Farid Fata ©Gary Zeune CPA 19 Sole owner 45 Year Sentence Video: Cancer doctor Farid Fata sentenced to 45 years in prison
- 20. Biomedical Tissue Services ©Gary Zeune CPA Video 20 CNBC's 'American Greed': Greed Beyond The Grave | American Greed CNBC's 'American Greed': Greed Beyond The Grave | American Greed
- 22. Legal but Ethical? ©Gary Zeune CPA 22 Do Hospitals Time Patient Discharges to Boost Profits? Video: Facilities Release Medicare Patients After Rules Trigger Higher Payments
- 23. Medicare Sepsis Patients Discharges ©Gary Zeune CPA 23 WSJ 2/17/16
- 24. Was the Behavior a Mistake or Intentional = Criminal ©Gary Zeune CPA 24 Gary’s 2 simple questions: 1. Did the behavior violate past patterns? 1. Healthcare upcoding 2. Treat a check as asset instead of expense 2. Did the violation benefit anyone? 1. Bonus 2. Comply with bank loan covenants 3. Keep stock price up 4. Small biz owner delays bankruptcy If both are Yes high probability behavior was criminal.
- 25. Top 10 Crooked CEOs Time Magazine ©Gary Zeune CPA 25 # 1 Sam Waksal CEO Imclone He spoke of himself in 3rd person.
- 26. 2016 ACFE Report to the Nations http://www.acfe.com/rttn2016/docs/2016-report-to-the-nations.pdf
- 27. Fraud is a Profit Center • Medium loss $150,000 and 23% were $1 million+ • Most common discovered by tips 39%+ • Hotlines doubled fraud reporting • Average fraud in public and private companies same amount • Different frauds in different industries and different entity types • Increased controls decreased fraud • More power BIGGER frauds • Accounting dept had highest frequency of fraud • Most fraudsters change behavior • 8.4% of victim organizations were fined • Frauds cost victim orgs an average of 5% of ___________REVENUE
- 28. Distribution of Dollar Loses
- 29. Occupational Frauds by Category
- 30. Overlap of Fraud Schemes
- 31. Schemes by Type - US
- 32. How Often – How Much – How Long
- 33. Duration v. Scheme Type
- 34. Concealment
- 35. How Detected in Small v Large Orgs
- 36. How Much – How Long – How Detected
- 37. Where Do Tips Come From?
- 38. Hotlines
- 39. Hotlines
- 40. Whistleblowers
- 41. Whistleblowers
- 43. Org Type - Amount - How Often
- 44. Gov’t Entity Loss and Frequency
- 45. Victim Industry
- 48. Fraud Controls
- 53. Checked Background Before Hiring
- 54. Types of Background Checks
- 56. Control Weakness by Scheme
- 58. Job vs Frequency + Loss
- 59. How Long v. Job
- 60. How Often – How Much - Job
- 61. Tenure - How Often – How Much
- 63. Rate of Fraud – Women v Men
- 64. Who Steals More – Men or Women?
- 65. Gender v. Job
- 66. Why Might Male Owners Steal More than Women Owners?
- 67. Scheme v Gender
- 68. Age – How Often – How Much
- 69. Does Education Affect How Often and How Much Fraud?
- 70. The More the BIGGER
- 71. Scheme v Relationship to Victim
- 73. Background Checks v Controls
- 75. Non-Fraud Related Misconduct No Misconduct Identified 61.8% 38.2% of Fraudsters Misbehave Before Fraud Type of Misconduc t
- 76. Cases Referred to Law Enforcement
- 77. Didn’t Call the Police Because…
- 78. Figure 103: Cases Resulting in Civil Suit Figure 104: Results of Civil Suits
- 79. How Much Do Victims Recover?
- 81. Fine the Victim – WHAT????
- 82. ACFE Fraud Prevention Checklist Note…..These top level questions have sub-questions 1. Is ongoing anti-fraud training provided to all employees of the organization? 2. Is an effective fraud reporting mechanism in place? 3. To increase employees’ perception of detection, are the following proactive measures taken and publicized to employees? 4. Is the management climate/tone at the top one of honesty and integrity? 5. Are fraud risk assessments performed to proactively identify and mitigate the company’s vulnerabilities to internal and external fraud? 6. Are strong anti-fraud controls in place and operating effectively, including the following?
- 83. ACFE Fraud Prevention Checklist 7. Does the internal audit department, if one exists, have adequate resources and authority to operate effectively and without undue influence from senior management? 8. Does the hiring policy include the following (where permitted by law)? 9. Are employee support programs in place to assist employees struggling with addiction, mental/emotional health, family or financial problems? 10. Is an open-door policy in place that allows employees to speak freely about pressures, providing management the opportunity to alleviate such pressures before they become acute? 11. Are anonymous surveys conducted to assess employee morale? Source: Page 88 of the Report to the Nations
- 84. GLOBAL HEADQUARTERS THE GREGOR BUILDING 716 West Ave Austin, TX 78701-2727 • USA Phone: (800) 245-3321 / (512) 478- 9000 www.ACFE.com • info@ACFE.com • Global conferences and seminars led by anti-fraud experts • Instructor-led, interactive professional training • Comprehensive resources for fighting fraud, including books, self-study courses and articles • Leading anti-fraud publications • Fraud Magazine™ • The Fraud Examiner • FraudInfo • 170 ACFE chapters worldwide • Anti-fraud curriculum and educational tools for colleges and universities