ACFE Tampa Bay Chapter 13th Annual Fraud & Computer Crimes Seminar May 10-11, 2012 2 CPE Hours
Today s Discussion Leader Steven S. Oscher Oscher Consulting, P.A. 201 N. Franklin St., Suite 3150 Tampa, FL 33602 (813) 229-8250 Fax (813) 229-8674
Why are we here?
All CFEs must exemplify the highest moral and ethical standards and abide by the Certified Fraud Examiners Code of Professional Ethics. and earn two (2) CPE hours every twelve (12) months
Each profession that is represented by a CFE has its own Code of Ethics/Conduct. For example: CPAs Law Enforcement Officers FBI Agents Attorneys
The AICPA Code of Professional Conduct states that members should test decisions and deeds by asking Am I doing what a person of integrity would do? Have I retained integrity?
The FBI states that two of its core values are uncompromising personal integrity and institutional integrity.
In the Florida Bar s Rules of Professional Conduct, a lawyer s conduct should conform to the requirements of the law, both in professional service to clients, in the lawyer s business and in personal affairs.
Hopefully, each individual that represents each profession has his/her own personal ethics
Professional v. Personal Ethics Is there a difference?
First, we should define ethics Simply, ethics can be defined as a system of principles of right and wrong behavior.
Some people can isolate personal ethics from professional ethics by the following: Personal = Conscience; Private Professional = Code of Conduct; Public
Is it possible for a person with low personal ethics to exhibit high professional ethics?
How would these people answer that question?
Is it possible for a person with high personal ethics to exhibit low professional ethics?
It was widely thought that Bernie Madoff was very (personally) ethical due to his contributions to multiple charitable organizations.
SCENARIO - A golfer hits his ball into the rough. While retrieving it, he notices a second ball much closer.
Since it s only a friendly game, is it okay for the golfer to take the closer ball? DUH
What if there was a friendly wager? What if the game was during a charity tournament?
In some states, a judge may sentence a criminal to the fullest extent of the law the death penalty, but may personally be opposed to the death penalty.
Would you be able to make the same decision?
The most important persuasion tool you have in your entire arsenal is integrity. -Zig Zigler Always do right. This will gratify some people and astonish the rest. Mark Twain
In 2010, Lewis Freeman, CPA, a go-to forensic accountant who was a court appointed receiver in many bankruptcy and fraud cases, was found guilty of embezzling $6 million from businesses under his control.
His defense team indicated that his guilty plea didn t represent the complete story They wanted his community deeds and sizable charitable contributions, including those to the Miami Children s Hospital, to be considered alongside his crime.
Bernard L. Madoff Investment Securities, LLC
December 2009 Donald Eugene Gates was released from prison after spending 27 years behind bars for a crime he did not commit. The testimony of former FBI Agent Michael Malone was instrumental in sending Gates to prison. Malone was able to have a profitable side job by manufacturing evidence and committing perjury in trial testimony.
In 2009, Marc Dreier, a successful Park Avenue attorney with degrees from Yale and Harvard, was arrested for impersonating a billionaire real estate developer which led to the uncovering of a $400 million Ponzi scheme.
Can ethics be taught? Can it be learned?
Harvard psychologist Lawrence Kohlberg found that a person s ability to deal with ethical issues develops in stages and is greatly influenced by EDUCATION.
And then there s Barry Minkow In 1987, Minkow s company ZZZZ Best Carpet Cleaning, a publically traded company, collapsed as a Ponzi scheme. Minkow was sentenced to 25 years in prison and ordered to pay $26 million in restitution.
In 1995, Minkow was paroled and became the pastor of a church in California. The congregation more than quadrupled under his leadership. In 2001, he founded the Fraud Discovery Institute and worked with the FBI and the SEC on shutting down at least 20 serious Ponzi schemes. In 2009, he began producing a movie about his life.
In 2009, Minkow pled guilty to conspiring to manipulate the stock of a Fortune 500 company. He caused the stock to plummet 26% in one day by making false accusations. He was sentenced to 5 years in prison and ordered to pay $583 million in restitution. As a result, the church investigated their records and found that numerous frauds were committed by Minkow against the church, the congregation, investors in his movie production, banks and credit card companies.
Best Buy CEO steps down following 'personal conduct' probe Champion of 401(k) fiduciary standard stole from pension plans: U.S. Attorney InvestmentNews 04/13/12 CNNMoney 04/10/12 Boy band mogul, Lou Pearlman, admits role in Ponzi scheme. Fox News 03/05/08 The Economics of Scandal: A $55,735 Hiring Cost Arkansas Football Coach Bobby Petrino $18 million Forbes 04/12/2012 What will it take for finance workers to report wrongdoing? CNNMoney 04/11/2012
Thank You