Book Reviews

Continuing with book reviews:

"Power Failure - The Inside Story of the Collapse of Enron"

     10 years after the fall of Enron, the story still has a powerful hold upon Houstonians.  Enron was a company of almost mythical proportions in the city and Ken Lay (now deceased) and Jeff Skilling (serving a long jail sentence) mythical figures in themselves.

     Personally, Enron meant a lot.  I worked for a law firm at the time which was located directly across from the Enron building.  I remember the parties during the summer that Enron would have on the green space separating our buildings.  Later, I worked for a firm that represented Sherron Watkins, the Enron whistleblower that brought down the organization, and the author of this book.

    "Power Failure" is an excellent book and highly recommended.  Ms. Watkin's insider details lets us know her story as she began to discover, once again almost by accident, the fact that Enron was, in and of itself, a massive Ponzi scheme.  10 years ago, this shook the foundations of corporate America.  Now, unfortunately, this same story has repeated itself time and again.  "Enron" itself has become a verb to describe a Ponzi scheme of massive proportions.

     The book is even more relevant today than when it was written.  Ms. Watkin's observations on human deception and the need sometimes to look away when the truth is too painful, as happened time and again within Enron, demonstrate how con artists and fraud scammers prey upon our all-too human weaknesses.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

Book Reviews

I will be on a major project starting Wednesday the 30th of November for a few days and this blog will not be updated until about December 5.  So, rather than start on a lengthy post, I will just devote the next two days to book recommendations.

     "No One Would Listen" by Harry Markopolous is an outstanding read and highly recommended.  Markopolous was a fraud investigator who, with a small team, discovered (quite by accident) Bernard Madoff's Ponzi scheme long before anyone else.  The discovery was based on a few elemental observations and even Markopolous himself was doubtful at first at what he realized was a fraud of epic proportions.

     This is only the beginning of the story, however.  The majority of the book is devoted to Markopolous' tireless efforts to get the Security and Exchange Commission (SEC) to listen to him (hence the title of the book) as he tried to bring this multi billion dollar scam (the largest such scam in history) to the agency's attention.  SEC incompetence and outright laziness on the part of SEC officials meant that for many years, despite Markopolous' warnings and exhaustive memos which clearly outlined Madoff's scheme, this vital information was ignored.

    The truly sad and shocking part of this entire story is that, had the SEC taken the time to just listen to Markopolous and read his memos (which anyone could understand), Madoff's scheme could have been caught years before it was finally exposed and upwards of $50 billion dollars saved (yes, you read that correctly, it's billions with a "b").

   Markopolous' story, as I think he would be the first to tell you, was not so much about someone cracking Madoff's scheme (although this was some brilliant work by Markopolous and his team), but rather the frustrating and heartbreaking scandal of government incompetence and possible corruption as Madoff's scam continued to defraud people of money and, in the end, cause an international tragedy and scandal.

    The book is an easy read and is well written.  Markopolous' own frustrations jump out at the reader as he relates his struggles and it is easy to empathize with him as Markopolous discovered that sometimes the real scandal is not the person who does the evil, but the governmental functionaries that are too lazy or incompetent to even care.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

You realize you are a victim of fraud XI

OK - you've done the leg work, made the hard decisions, stopped the fraud and taken steps to ensure that it never happens again.  What is left?

     Well, as we leave this subject, I will state that it can't hurt to at least become familiar with some of the well-known techniques of fraudsters.  Blogs such as this one (ahem) are a good place to start with learning about fraud and fraud related issues.  But, every so often, it can't hurt to do a scan of the internet to find out about what is occurring in the world and how fraud and confidence scams change and evolve.  In some ways, fraud never really changes - it is the use of deception to take money or possessions from other people and, as we have seen, this has been going on since the dawn of time.  However, the method and means of fraud is always changing.  Fraudsters are incredibly inventive in coming up with new schemes.

     Take some time to read up on what is going on in this murky world.  I find this reading to be absolutely fascinating.  It doesn't take much of an effort, it is often times an easy read and also enjoyable.

    We will move to a new topic tomorrow.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

You realize you are a victim of fraud X

OK - so we discussed what happens when you are a victim of active fraud and the prevention measures that need to be taken.  What happens if you are a victim of passive fraud?

     There is really no way to sugar coat this - the best course of action is to retain a fraud professional for your business to install security and safety procedures to reduce the chances of it ever occurring again.  Unfortunately, unlike with active fraud, where you have to take some affirmative step to get involved with the fraud, with passive fraud, you were the victim because someone found an opening and exploited it.

     The best course of action is to retain a professional to "seal" these gaps.  There is just too much information to speak about this that cannot fit into this blog (although I may try later).  There are certain things for which you will need a fraud professional and this is one of them.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

You realize you are a victim of fraud IX

OK - you have found that you are a victim of fraud and you have also taken the corrective measures.  In medical terms, you have found the wound, staunched the flow of blood and closed the wound.  What's next?

     The next step is to ensure that it will not happen again.  If you have been the victim of fraud, you are somewhat more experienced and (hopefully) somewhat wiser.  You know that fraud is not only something that happens to "other people" it is something that can happen to you and has happened to you.  The real trick, therefore, is to prevent it from occurring again.

     Let's start off this discussion assuming you have been the victim of active fraud.  You sent money to a 419 scam in Nigeria (or any other country).  Once again, to have been a victim of active fraud you somehow must  have participated in this action (in this case, by sending the money).  It's easy to say "well, the answer is simple, I just won't do it again."

     Take steps to ensure that it does not happen again.  This is more than just saying "well, I'm never going to accept an e-mail invitation to send money abroad (or in the U.S.) again."  Talk to a financial advisor.  Talk to someone who can tell you if a program or scheme that is offered to you is legit or something that is indeed "too good to be true."  Get some kind of backup system in place so that you can get a second opinion BEFORE any money is sent or any contracts are signed.

     This step alone is enough to deter most fraud.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

You realize you are a victim of fraud VIII

OK - let's take the position that whether you have been the victim of a passive fraud or an active fraud, you took your case the District Attorneys' office (or the Justice Department depending on the size of the fraud) and it was accepted for prosecution (or you retained a legal or fraud specialist to help you with this and it was accepted for prosecution).  Now what?

     Two things:

1.  First, cooperate with the DA or the Justice Department.  You brought the case to them, they accepted it and they will need your help to fully prosecute the matter.  Just because you brought a case to the DA or to the Justice Department, it does not mean that it ends there.  The case may end up going to trial and, if you were the victim of fraud, it is almost certain that you will be a witness in the case, if not the star witness.  The DA or the Justice Department will need your help to keep the case going to its conclusion.

2.  Second, remember that if a case is being prosecuted, it is not wise to go around talking about it.  Until the case is resolved, it is best to keep quiet about the matter, unless of course you are talking to the DA or Justice or to your own legal counsel.

On a personal note, I will not be posting this Thursday (11/24) because of the holiday.  I wish everyone a happy Thanksgiving.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

You realize you are a victim of fraud VII

OK - we discussed yesterday what to do when you are a victim of passive fraud and the (usual) necessity of speaking to a lawyer because of the legal overtones of dismissing the employee who was causing the fraud (causing employment issues) and/or going to the District Attorneys' office to file a criminal complaint (bringing criminal issues into the mix).

     The issue for today is: if you are the victim of active fraud, do you still need to take the same steps and precautions?

     Remember, with active fraud, normally the only victim is yourself.  You were the one sending the money so you were the one who experienced the loss.  In this case, there are (usually) no other parties).

     It is still good advice, however, to speak with an attorney before filing any documents or complaints with the D.A.  In this case, "attorney" means a competent criminal defense attorney.  There are three main reasons for doing this:

1.  First, a competent professional should review your case
2.  Second, there is always the possibility that, inadvertantly, you may have committed a crime.  Money that was sent overseas (which occurs in some frauds) may have been sent, even without your consent, to groups that the United States Department of State classifies as terrorist groups.  Also, once again without your consent or knowledge, money transfers could have been in violation of the Foreign Corrupt Practices Act.  It is a good idea, therefore, to get an informed opinion on this.
3.  Finally, it is important to have an attorney see if this is something that a District Attorneys office can handle or if it needs to go the Federal government, or anywhere at all.

   When you have been the victim of fraud, it is important to report the fraud and how much you lost.  But, once again, getting assistance from an attorney can be important before proceeding forward.