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STORY NUMBER #1:
EMBEZZLERS ARE NICE PEOPLE
We spend a lot of
time suing embezzlers. All over the world. Week in and week out. Big
embezzlers, small embezzlers, smart embezzlers and very smart
embezzlers…
That’s right, no
dumb embezzlers because almost all the embezzlers we encounter are
smart. Some are very smart. Some are brilliant.
And, almost always,
most would have made more money and had a more profitable career if they
had simply stopped stealing and starting working honestly.
I mean, figure it
out. An embezzler has to not only do his or her job well so that no one
is looking over his or her shoulder but has to do their job so well
that they can steal for months or years and it won’t show up. They have
to be charismatic and knowledgeable enough so that no one bothers to
double check their work. They have to be very steady in their work so
that it cannot be reviewed because they are on vacation or ill…in short,
they have to be great employees. And either so boring that all ignore
their existence or so well liked that no one would question their
character. Most choose the latter mode since it also allows access to
more accounts and financial secrets.
And when embezzlers
run entire companies, they have to create a bottom line successful
enough for long enough that investors and business colleagues respect
and trust them after review of the books…at least for a time.
Took me a long time
to figure that out…for the first few years of practice, I found it
incredible that such brilliant and attractive people would be dumb
enough to risk it all for the relatively paltry gains that embezzlement
can earn. I kept looking to see the underlying motivations since, I
figured, I could better advise clients what to look out for if I could
figure out precisely what makes an embezzler embezzle.
Now I know.
They embezzle
because they like it. They like the rush. They need money now, not in
five years. They like being smarter than the drudges they figure are
around them. And they embezzle, I am convinced, because they want to get
caught sooner or later and that pattern is usually repeated over and
over.
Take one of my
favorite embezzlers, a guy who once owned the famous Flamingo Hotel in
California until his world crumbled around him during a case our client
brought against him in the late 1970’s. I had represented a minority
shareholder in the venture and after perhaps a year of very aggressive
litigation, Eddie Chan (not his real name) called it quits, transferred
the shell of a company that was left to my client along with most of the
rest of his assets, settled for a suspended sentence with the district
attorney (to my fury) and then called me to invite me to lunch.
I had only been
practicing for five years at the time and was unused to the foibles of
opposing parties. I was nonplussed and immediately called his counsel to
ask if that would be OK…as required by the Code of Ethics.
“Sure,” the
relatively famous criminal defense attorney chirped, “and tell him to
pay my bill while you’re at it. ”
So there I was two
days later with Eddie at his favorite Italian restaurant, Orsis,
watching him fiddle with his fettuccini, his hands nervously twitching
every so often, but immaculately dressed in a conservative business
suit, expensive cufflinks and watch, the picture of a successful and
conservative business man.
He had greeted me
in a rather distracted manner, looking about the room, but friendly
enough. Since I had been instrumental in destroying his economic well
being, and since he knew I had been demanding his incarceration for his
embezzlement with the district attorney, I wondered why we were having
this lunch. Cautious, I figured I’d let him tell me. And, in turn, I’d
try to figure out what made him tick.
The waiters all knew
him. He was a regular and his waistline showed it. Friendly but not
effusive, soft spoken and understated, he appeared now as he had been
throughout the trial…a typical intelligent businessman slightly shocked
that people were upset with him, but just maybe a hint of irony somehow
mixed into his replies. On the stand he had been asked what he had done
with the money.
“Spent it. I have
none left. If I did, perhaps I would pay it back”
“On what did you
spend it? Are those assets in the United States at this time?
He had stared at me
for a moment, knowing I was looking for assets to attach, then suddenly
smiled sadly. “I spent it on sweet, stupid things that make life an
appropriate journey. Little things with some elegance attached. Things
only worth buying because they have little value in the long run. Like
life, itself.”
There was some
laughter in the court room but my client had begun to mutter darkly at
my side, furious that these “little things” had bankrupted the Hotel. As
I sat there in that elegant restaurant, I decided that he had, for once,
been telling the truth.
“Is this lunch a
little elegant thing to make life bearable, Eddie?” I now asked.
I thought he would
smile but he looked at me steadily for the first time that afternoon.
After a moment’s silence, he said softly, “Your courts are not used to
hearing an honest statement, are they?”
“Was that? You’re
telling me that you spent it all, nothing is left?”
“You are still cross
examining me. You are still looking for assets. I am speaking of honest
answers. Of course I spent it. Why else take it? Money taken like that
should not be spent on necessities of life but on luxuries of life.
Necessities of life are the proper destination of grim jobs with little
men working at little desks.”
He waved to the
water to refill his wine glass. I was suddenly reminded of the movie
Casablanca in the coffee house with Sidney Greenstreet making a deal.
I was also angry. “Those little people
were your victims, Eddie. They work years and you take what they make
and bankrupt businesses left and right. For luxuries.”
“Of course I do. You
are stating the obvious. What you are not stating is why it matters so
much to arouse such passion. I am the one losing all. Not you and not
your client. Do I appear upset?”
He didn’t. He
appeared bemused, not upset. He leaned forward. “Look, that is the past
and I want to move forward. I want this to be a constructive meeting.”
“Meeting?
Constructive meeting?”
“Yes, I have an
opportunity. You represent many clients who might be interested. It
should be very profitable.”
And for the next ten
minutes he explained in some detail a new business venture he was
considering involving Hong Kong property. Finally I could take it no
longer.
“Look, Eddie,” I
interrupted, “I can’t believe this. I’m the guy who wanted you in jail.
Remember? I know you and your past. You seem to think I’d tell my
clients to invest in you. Are you nuts?”
He was shocked. “Of
course you would. You already know who I am and what I do. You don’t
have to worry about checking out my background. You can build all the
safeguards you need. This isn’t about me. It’s about the deal. If it’s a
good deal, you should jump at it. Better the thief you know than the
thief you don’t know. This is a perfect opportunity for you. Who else
would think of investing with me?” And off he went again with his
business plan.
I pushed my
cannelloni around while he expounded on the future of Hong Kong and when
he finally wound down, asked, “Does it not occur to you that people want
to do business with honest people they can trust? Not dishonest people
they have to watch?”
He became
exasperated. “Didn’t you tell your client you have to create checks and
balances in the company and watch each and every employee?”
“Yes, but…”
“And don’t you
insist on systems being created in every company so that no one can get
away with cooking the books or taking from the company no matter who is
in charge?”
“Yes…”
“Then what
difference does it make if someone you don’t trust is involved? You
don’t trust anyone anyway. If your systems work they work. I am not any
more of a danger to you than any other person. I don’t see the problem.”
And he didn’t see a
problem. Either with his plan or his actions-except that he was caught.
Oh, perhaps a little guilt now and then…but nothing that good wine could
not assuage. Business was business and his was stealing if he could get
away with it.
There was a certain
splendor in his lack of hypocrisy, a certain attraction in his blunt
appraisal of his own role.
But I would not
recommend business with him to anyone.
Since what Eddie
didn’t understand is that people are not only in business for the money.
Oh, it’s important, but it’s never just the money in my experience. It’s
a dozen other things, the joy of creating something from nothing, the
excitement of success, the comradeship one gets from working in a team
that is good and effective, etc, etc.
Business may be
competitive, but there are rules and it is not war.
To Eddie, business
was not only war, but war with the only rules being do not get caught if
you can and make all the money you can. And trust no one.
I had another client
about the same time, an elderly business man disliked by almost all that
knew him, a truly unpleasant individual who never praised anyone, made
more money than anyone I knew and could be cast as Scrooge except for
his enjoyment of fishing which was all that he truly cared about other
than money. But honest…he often would give more to the other side in
the bargain than they asked because it was better business tactics to
have a vendor who was making good money with you than not. During a
break in a negotiation I told him about Eddie, laughing.
He didn’t think it
was funny.
“Eddie’s just more
honest than a lot of the business men I know. Get the money any way you
can, any time you can, short term thinking, everyone is a crook anyway
so what’s the big deal? I know a lot of people like that. They think
they’re smart. They’re not. They grab a nickel here and lose a dollar in
the long run. Like him…but he’s just crude and a little stupid.”
“Crude?”
“The smarter ones do
it legally.” He grinned and the negotiation began again.
Eddie died about
three years later. I read in the papers that his funeral was well
attended, even by some of his newly created victims. Perhaps they were
gloating. Or perhaps they liked him,
Because, all in all,
he was a pretty nice guy. Being a nice guy is how he made his living,
after all. Who would trust his money to a grouch? |
