How To Embezzle $100 Million

How To Embezzle $100 Million

Step 1. Start a financial services firm.

Step 2. Make sure you are the only person in the company who sees the bank statements.

Step 3. “Using a combination of Photo Shop, Excel, scanners and both laser and ink jet printers… make very convincing forgeries of nearly every document that came from the Bank.”

At least, that’s how Peregrine CEO Russell Wasendorf Sr. did it – for over 20 years.

He wrote a suicide note explaining the whole scam before attempting suicide. He failed at that and has now pleaded guilty to fraud and embezzlement.

What about the Regulators? Why didn’t they catch him?

“It was relatively simple to deceive the Regulators” according to Russ. Good to know.

He ended his suicide note with “I am ready to die. I guess this is the only way out of a business I hate so much.”

It’s a far cry from his most recent “Chairman’s Letter”, where he wrote

“At PFGBEST, our consistent hallmarks remain: respectful and conscientious care of customers and their accounts; a keen sense of their evolving needs; and, the talent and resources to provide analytical, flexible and customized solutions.”

Guys like Wasendorf are fascinating to me. How high would he score on a test for psychopathy? Surely he would score highly on many of those factors.

You have to wonder how many CEOs, politicians and entrepreneurs are psychopaths? And what is it about capitalism that allows them to prosper?

Of course, the history of socialism and communism has it’s fair share of psychopaths as well. Why is it so hard for us to design a socio-economic system that weeds out psychopaths?

 

Does Deprivation Fire Ambition?

Does Deprivation Fire Ambition?

In the NYT today, David Brooks makes some interesting points about motivation, reflecting on Romney’s latest gaff:

The final thing the comment suggests is that Romney knows nothing about ambition and motivation. The formula he sketches is this: People who are forced to make it on their own have drive. People who receive benefits have dependency.

But, of course, no middle-class parent acts as if this is true. Middle-class parents don’t deprive their children of benefits so they can learn to struggle on their own. They shower benefits on their children to give them more opportunities — so they can play travel sports, go on foreign trips and develop more skills.

People are motivated when they feel competent. They are motivated when they have more opportunities. Ambition is fired by possibility, not by deprivation, as a tour through the world’s poorest regions makes clear.

If rich people really think benefits don’t help you, then they wouldn’t send their kids to private schools and elite universities. They wouldn’t use their personal networks to land their kids high-paying jobs in friends’ companies. They wouldn’t buy them a car, or give them a credit card or a mobile phone.

And we know this isn’t how it works.

So the next time one of your wealthy right-leaning friends tells you that the welfare system destroys ambition, you might want to point our their hypocrisy. If they really believed it, they would send their own kids to live by themselves in Kabul for a few years.

I grew up on the poverty line (by Australian standards) and I’m grateful that we had healthcare and education made available to us. If we hadn’t, I’d probably still be living in Bundaberg, either unemployed or doing some kind of manual labour. I’m not suggesting there is anything wrong with those things, but it was only because I had a decent education that I could explore other opportunities.

Yes – growing up poor made me hungry. And in my 20s that was a hunger to be rich. In my 30s and 40s that turned into a hunger to improve the system.

What people like Romney don’t understand is that altruism is about enlightened self-interest. If you build a strong society of people with a decent education and decent healthcare, you will get rewarded a thousand-fold. These people will become the next generation of doctors, inventors, engineers, artists, authors, journalists, film-makers, musicians, scientists and historians that improve society for all of us.

(HT to @NikolasKozloff for the NYT link)

Socio-Economics Is Like Soccer

Socio-Economics Is Like Soccer

economics is like soccer

We understand and accept this fact in sport. I tell my kids all the time “every member of the team is important”.

The same is true in socio-economics. The CEO can’t run a billion dollar company without the rest of the employees. The brilliant entrepreneur can’t bring that new gadget to market without the people who sweep the streets, pick up the garbage, grow the food, staff the supermarket, wait tables, and manage the petrol station. It’s all a giant web of interrelation. If we all need each other to make the whole damn thing work, then we should share the profit as well. This whole bizarre idea that the people who run companies or invent something deserve the 1% because they worked harder or are smarter is complete bullshit and easily falsifiable. I love Ayn Rand’s book, but the premise of Atlas Shrugged works both ways. Yes – when the entrepreneurs pack their bags and move to an island, society feels their loss. But if the rest of society up and left the entrepreneurs alone on the mainland, how long do you think they would survive on their own, without anyone to sweep the streets, grow the food and, by the way, BUY THEIR WONDERFUL PRODUCTS?

We all need each other. As Lester Freamon might say “All the pieces matter”.

Lonmin Marikana Police Massacre

Lonmin Marikana Police Massacre

Around the world this year we have seen police violence whenever the people don’t submit themselves to the elite. Whether it is against Occupy Wall Street,  students in Pennsylvania or against rioters in Greece, the story always has the same ring to it – the people must submit or face violence.

Today the news out of South Africa’s third-largest platinum producer, Lonmin‘s Marikana mine, is the most chilling of all. Thirty striking miners were shot dead by police.

Al Jazeera has horrifying footage of the slaughter:

This is on top of the 8 workers who were killed last week at the same mine.

As of the time of posting, there is no mention of the latest round of violence on the (British owned) Lonmin website.

lonmin marikana website

According to Al Jazeera, the miners were getting paid about $500 a month and wanted a pay rise to $1500. They wanted Lonmin management to come down to negotiate with them but the management refused.  Possibly because their CEO, Ian Farmer, has recently been diagnosed with a serious illness. Lonmin has a market cap of $16 billion.

There had been a stand-off between the protestors and the police for a week and today it came to a bloody end.

The footage only starts with the protestors, who were wielding machetes, running towards the police when the shooting starts, but we can see what looks like tear gas behind them. Is it possible that the police shot tear gas into the crowd, who then panicked, and were mown down?

The AMCU (Association of Mineworkers and Construction Union) claims that Lonmin management might have been behind the initial violence via their indirect support of the National Union of Mineworkers (NUM), a rival union. Management setting up rival fake unions to create tension and conflict in the workforce isn’t a new tactic. See here and here.

http://www.miningweekly.com/article/amcu-blames-lonmin-management-for-mine-unrest-2012-08-14

 

I wonder how this incident maps to Lonmin’s stated corporate mission and values?

lonmin values