Psychopaths in Suits – Corporate Criminals in Our Midst

Recently another ponzi scheme was exposed after its evil mastermind,  Jeffery White, passed away in 2011, from a brain aneurysm at the age of56. Lucky for him.   Brown, one of the “investors” whom he bilked out of his life savings to the tune of $250,000.00, has stated “if he wasn’t already dead, I’d kill him.” Indeed.  The truly evil thing about White was that he knew Brown and his wife, Anne, and they were his friends.  Imagine how he treated his enemies?  Brown’s wife used to teach White’s wife, Henny, in grade school, hence the connection between Brown and White. It turned out to be a devastating connection, personally and financially. Too bad Anne didn’t teach Henny about business ethics.

Ponzi schemes are named after Charles Ponzi, an Italian businessman and con artist in the U.S. and Canada.  Charles Ponzi promised clients a 50% profit within 45 days, or 100% profit within 90 days, by buying discounted postal reply coupons in other countries and redeeming them at face value in the United States as a form of arbitrage.In reality, Ponzi was paying early investors using the investments of later investors. Some ponzi schemes also pay investors with their own initial investment, masquerading it as accrued profit. An interesting flick that presents a ponzi scheme (without calling it so) is Green Guys, about a group of 20-something hot shots who bilk unsuspecting investors for millions of dollars.

There are 5 main characteristics of a ponzi scheme:

1. The Benefit: A promise that the investment will achieve an above normal rate of return.
2. The Setup: A plausible explanation of how the investment can achieve these above normal rates of return.
3. Initial Credibility: The person running the scheme needs to be believable.
4. Initial Investors Paid Off: For a time, the investors need to make at least the promised rate of return.
5. Communicated Successes: Investors need to hear about the payoffs.

Steps in the Ponzi Scheme

The steps are as follows:

1. Convince a few investors to place money into the investment.
2. After the specified time, return the investment money to the investors, plus the specified interest rate.
3. Convince more investors to place their money into the system by referring to the profits of the earlier investors.
4. Repeat steps 1 through 3.
5. During step 2 at one of the cycles, break the pattern.  Escape with the money and start a new life. Or, in Jeffery White’s case, drop dead.

White’s known investors say they are out as much as $5 million. The scheme unravelled after White’s sudden death. Trustees of White’s estate became “extremely uncomfortable“with the discoveries they made. White solicited investments from many of his insurance clients, while treating their moneys as funds that were loaned to him for his general use. White’s business and personal accounts were intermingled, making the tracing of investments impossible.  At the time of his death, White was carrying more than $300,000 in credit card debt and was behind his time-share at Diamond’s Edge Muskoka Cottages. The vintage Porsche 911 Turbo he drove around the GTA was leased. There were no red flags but court documents show White had money problems dating back to the early 1990. Reassessment of his personal income taxes of the years 1996 to 2000 resulted in a substantial debt to Revenue Canada. Testifying at his tax court appeal White claimed his sister left him $1.3 million in debt.The judge in the case called White “vague” and his records “woefully inadequate.” By moving funds about through numerous bank accounts, he made it impossible to prove his case. In 2006, he dropped his appeals and paid $400,000 in arrears.

Psychopathy runs on a continuum with white collar criminals falling in the middle. They’re deceitful and egotistical. White-collar criminals might not physically destroy people, but they have no problem financially destroying them. This type of psychopath is high-functioning. They’re intelligent, have great interpersonal skills, are powerfully persuasive and able to disguise themselves very well. A psychopath is all about manipulation. They’re always assessing, “How can this particular job or person meet my needs? How can I exploit them?’” 

The list of white-collar psychopaths is almost endless. To a certain extent, most people compartmentalize and lead different lives. It’s normal for your work persona to be divergent from your family life. With psychopaths the compartmentalizing is much more exaggerated Jim Hammes, formerly a controller with a Cinncinnati-based company, embezzled $8.7 million of company money into a bank account in the name of a second company doing business with his company. He is currently a fugitive wanted by the FBI and has been on the run since 2009. Hammes also abandoned his two families, neither of whom knew about the other: he was married to two women and had children with both.

Frauds can be very deceptive in terms of their appearance, status and age. Joanne Schneider, a 71-year-old woman in Ohio was recently charged with operating a ponzi scheme and bilking $60 million dollars from 900 investors. The scheme unraveled when a Schneider family member became suspicious after his mother was promised a 16 to 20 percent return on her investment. Schneider’s criminal resume is impressive: securities fraud, selling unregistered securities, engaging in corrupt activity, misrepresentations in securities, theft, and money laundering. Schneider’s husband, Alan Schneider, played a lesser role in the scheme, pled guilty to security and theft charges. He got probation. She got 10 years. If she serves the full sentence, Schneider will be 81 when she is released from prison – either that or deceased from natural causes.

The Average Canadian is Truly Joe Average

As Canadians we have a lot to be proud about in terms of living in a wonderful country like Canada.  The best country in the world, in fact. Where else can you retire on nothing and still be taken care of (see my previous blog Ridiculous Retirement Advice).  However the stats for the average Canadian as a person are considerably less impressive:

1. the average male is slightly overweight (think of that ugly beer belly many middle-aged men sport) and only earns $30,000 a year
2. Many Canadians spend $2,000 on fast food and/or restaurants annually yet they save zero for retirement (again, that relates to my previous post if you are interested in the no-frills retirement option)
3. the average Canadian is $112,000.00 in debt ….  watch cbc a living wage instead of minimum wage
4. Canadians spend more on booze than fresh fruits and vegetables
5. these stats don’t jibe with the fact that most Canadians have graduated from college or university
6. most people are happy with their economic situation
7. if you live in a house larger than 1,900-sq.-feet,  contribute anything at all to your RRSPs and don’t have a mortgage, you’re doing better than most
8. The average household debt, including  mortgages, credit cards and personal loans equates to a monthly payment  of about $1,140 ….  watch canada’s growing debt
9. There’s no evidence that we have a retirement crisis since overall Canadians contribute 30% to their RRSPs
10. If your family brings in more than $68,000 a year, you’re doing better  than average

The average household rake in between $68,000.00 and $86,000.00, but that is only if both spouses are working.  It is the combined salaries that raise the household income from a single person (on average only $30,000 to $40,000) to these higher amounts. Usually those who are university educated fare far better financially.  An individual can make as much money annually as a combined household income with 2 adults who haven’t graduated from a post-secondary institution.

The stats seem rather disparaging to me, personally but in comparison with the United States they really aren’t so bad:

1. In 2006, the median annual household income rose 1.3% to $50,233.00
2. The real median earnings of men who worked full-time, year-round climbed between 2006 and 2007, from $43,460 to $45,113
3. For women, the corresponding increase was from $33,437 to $35,102 watch thomas sowell – gender bias and income disparity – a myth?
4. households with an income exceeding $60,000, had two income earners
5. The educational attainment of the U.S. population reflects that the vast majority of the population has completed secondary education and a rising number of college graduates outnumber high school dropouts.
6. As a whole, the population of the United States is spending more years in formal educational programs
7. an average per person of more than $43,000 in debt
8. the American mortgage debt works out to over $60,000 in housing debt for every adult in the country
9. the average debt for every adult in the United States is $113,360
10. Average credit card debt per household with credit card debt: $15,956

You’re no better off if you skip to the States to try to capitalize on lower-income taxes as a senior retiree.  Stats seem to bear this out.  The numbers sound abysmal but apparently if you fall in that range somewhere, you’re doing okay. It seems the average Canadian and the average American have a lot in common.  Who knew?

WalMart Involved in a Scandal? Really?

Well isn’t that news, and so unexpected too.  Wal-Mart, according to CEO Mike Duke‘s Statements of Ethics, “our customers trust us to be their advocate. Our suppliers trust us to be an equitable partner. And as Wal-Mart associates, we trust each other to uphold the highest standards of conduct every day.” Just don’t cross the Mexican border, Mike.

Hmm let’s see now. Insofar as Wal-Mart and scandal is concerned there have been a few in its history:

1. sweatshops – when we discovered that was one reason Wal-Mart could keep lowering those prices that
   created a bit of an outcry, however it didn’t last too long…who doesn’t want low prices?
2. Chinese pork labelling scandal – Tonnes of pork was deliberately mislabeled as “organic”.  Organic pigs.  Who
   knew?  Watch president of Wal-Mart China resigns after pork scandal
3. Something about commie China and Wal-Mart – watch America can’t afford Wal Mart any longer. Good ol’
   WM keeps importing unsafe products from China rather than selling our domestic products here where the
   health and safety standards assure we won’t end up dying of asbestos poison when we eat a deli sandwich.
   Tsk, tsk, Samuel. watch the hidden costs of walmart
4. Speaking of importing Chinese products (which have been made in Wal-Mart’s Chinese sweatshops), heaven
   forbid Wal-Mart employs American and Canadian workers to make products here at home, thus improving the social
   economy and guaranteeing jobs for thousands of people who have been out of work since the mortgage crisis in
   the US of A.  That would be too people-friendly and far too ethical.  (Mike Duke will forgive me). watch Wal-Mart smiley tv commercial
5. On the other hand, Wal-Mart employees tend to go hungry on a Wal-Mart wage – watch 3 of 10 Wal-Mart Deception
   and Corruption Documentary 

Wal-Mart of course makes a mighty attempt at volleying back these accusations through their PR department.   David Tovar, VP of Corporate Communications, actually kept a straight face during this little blurb.  Well done, Dave. watch Wal-Mart statement on fcpa

Okay, so this one isn’t directly WM’s fault.  However it is entirely understandable if the “suspect” was in a grouchy mood about WM’s victimization of consumers. Perhaps he mistook the tot for a WM PR rep and he let the kid have it.  watch stranger slaps crying child at WM

I shall leave you with this catchy little jingle…..  I’ve always been a CCR fan, myself.

Vatican Vs Military Spending … You Know You’re in Trouble When …

… even the Pope is devastated over international financial expenditures on military defence.
video: Pope Calls for Less Military Spending and More Development

Note the Pope’s quote: To cease the hatred, the provocation and the use of arms. Easing global tensions however is not what so many nations, especially us privileged first worlds, are about. The Pope pleaded to Iran for a negotiated solution to the dispute over the nuclear programs. Let’s have a look at the US involvement in Iran’s “dispute”, shall we? (You knew it had to go there). The UN made it clear Iran must not pursue weapons of mass destruction. Clearly this is not a sign that Iran is in any way on a quest for peace. Iran halfheartedly, kinda agreed to that but politely suggested it needed plutonium for, um, nuclear energy, not weaponry of course. The UN, not to be fooled, demurred and let it be known to other nations not to barter with Iran over that one. Well, you can’t win em’ all….or can you?
video:  Iran’s uranium a problem for UN, not the world – an alternative viewpoint

Enter the United States who, for purely altruistic purposes, were happy to negotiate the sale of plutonium to Iran to manufacture nuclear energy and not nuclear weaponry, of course. Iran didn’t care for the market price of US plutonium and the final transaction was sucked into the void known as the Black Market. Outraged and shocked upon discovering Iran was purchasing plutonium after it “insisted its plutonium-separation experiments were conducted in 1993” “and that no plutonium had been separated [from uranium] since then” the United States righteously called for sanctions against Iran by the UN. Can you hear that sound? That’s me gagging on my lunch.
Article:  Threats Watch: Iran, Plutonium and Assessing the Threat

Ah, Benedict XVI, world peace remains as elusive now as it was during Jesus‘ time. The Son of God Himself couldn’t turn the tides and I dare say neither can Pope Benedict. Of course now we have the hypocrisy and greed of those pesky Americans to contend with in the process.

World Peace R.I.P.