Last Sunday, Marc Dreier was profiled on 60 Minutes, for those of you who didn't recognized his name, just think of Mr. Madoff, and instead of $65 billion, think $400 million.
Marc Dreier 59, a former lawyer from New York City, was sentenced to 20 years for defrauding clients and investors of over $400 million. Apparently, Mr. Dreier has managed to accomplish his misdeeds ($400mil) to his clients in just under five years. He basically did what Mr. Madoff did but in a shorter time.
I believe, the pivotal moment for Mr. Dreier came when his firm's controller and in-house counsel requested disbursement of $38.5 million held on behalf of 360networks Corp., (which 360 has emerged from a 2001 Chapter 11 bankruptcy) for payment distribution to their unsecured creditors, but only $19 million was found in several escrow accounts. To cover the short-fall and to prevent his house of cards from falling, Mr. Dreier knew he must make another "desperate" move before his fraud would be discovered, and he believes he needs to go where he won't be easily caught like - Canada. In Toronto, he approached one of largest and most powerful investment groups in the country with 167,000 members and 104,000 retirees - the Ontario Teacher's Pension Plan (OTPP). Repeating his lies, he made another attempt to defraud. He arranged a meeting with OTPP to tried to convince them to invest in his fake promissory notes and presenting false financial statements for the total of $44.7 million by impersonating an in-house lawyer of his own New York long-time client (who was also defrauded). OTPP was suspicious and didn't take the bait, he was immediately arrested and was finally caught.
Last week, another "I-don't-believe-this-is-for-real" story broke on talk show host David Letterman who announced during his monologue he had sexual relationship with his female staff. He confessed on-air because he was blackmailed by a seven-time Emmy award winner producer, Joe Halderman who produced the popular 48-hours an investigative magazine show. Joe allegedly cashed a phony certified check issued by Letterman's lawyer in the amount of $2 million dollars in a sting operation - I don't know about you, but issuing a check in the name of your blackmailer and getting your blackmailer to cash it at his own bank - just doesn't wash. I can only imagine what must be like to work in a "toxic" environment and what his staff (male or female) have to endure. It almost makes you wonder if his marriage last March to his longtime companion was perhaps done out of guilt. His behaviors definitely have signs of "abuse of power".
Another story worth mention, a 16-year-old honors student in Chicago was beaten to death, his death was not the reason his story went virile around the country, it was the fact that "no one" came forward to help identify the perpetrators - that's the shocking part. It's a tragedy, I think our schools, our community and I would go even further by saying, the parents - have failed. I think we should take responsibility for failing to teach our kids to value and respect ourselves and to value and respect the lives of others. Teach kids to believe, teach kids to act, teach kids to help others who are in need of help. Helping a dying victim in a fatal car accident is no different than helping or saving a victim in a gang fight. In this case, the incident was recorded from a cell phone, you can see people gathering and watching the teenager being beaten to death. I believe, if the situation was reversed, I think we would hope someone will come forward. I know Derrion Albert's mother would.
This month's Pager Turner - A Must Read, Dr. Robert D Hare and Dr. Paul Babiak discussed their book "Snakes in Suits" with Ann Curry on Today show via YouTube. It's relevant because people like Madoff, Dreier, Stanford, and many others fits what the book identified as Psychopathic Fraudsters. Last year, Dick Carozza, editor of Fraud Magazine interviewed Dr. Babiak and he said "...all of the psychopaths that we have studied are still in positions of authority in their companies. In some cases, they have risen within the ranks, and in others, they have solid positions from which they continue to use their organizations for personal gain. The one psychopath we studied who was fired ended up leaving with a sizeable financial package and a company car. He was hired by a competitor at a significantly greater salary. Unfortunately, in their effort to rid themselves of problems and to avoid embarrassment in front of corporate or financial communities, some organizations will cover up their messes and even write favorable letters of recommendation thus facilitating psychopaths' devious journeys up corporate ladders. Since the publication of "Snakes in Suits", we have received an increased number of calls from executives, entrepreneurs, and principals who now suspect that someone on their staff - or even an equity partner - is a corporate psychopath. We see that awareness of the problem has increased, as has the willingness to take action to remove or otherwise deal with the problem person..."
Warren Buffett talked about hiring people who have integrity, intellegence and energy when he spoke at University of Florida's MBA class some ten years ago - is worth watching.
Several years ago, I was asked if I'd like to see an eighty some year-old guitar inventor perform live at the Iridium in NYC, I kind of said "not-really" but when Les Paul came on stage and started to interact with his audience, he was not only funny, charming, smart and never missed a beat when he performed with his trio band. He played jazz and other music better than anyone. Let's just say I am very fortunate to have catch him perform on stage at Iridium.
Thom Browne is the man behind Brooks Brothers. For me, Brooks Brothers means quality, temeless, and it's a sure thing. No wonder they've been around since 1818 and now in Canada.
Remember John Thain, former CEO of Merrill Lynch thought it was all right to spend $1.2 million renovating his office suite, when he knew his company was in "over-his-head" with debts. Well, British designer team Colin McAllister and Justin Ryan were tasked to re-style their boss's office, Star's new editor-in-chief, Michael Cooke's outdated executive office. It's entertaining to watch.
Winter in Toronto, not sure where to stay but you know you would like to stay near the financial district, then King Edward should be considered. Marcel's Bistro and La Maquette serve great food, wonderful ambience, friendly and personable staff. Next time, if you are in Toronto - take a visit.
Today is Thanksgiving in Canada. It's a holiday where most people don't have to go to work. This year, I know people that don't have to work not because it's Thanksgiving, but because they are either underemployed or unemployed. Most families I know are scaling back, whether to save to be safe, or scaling back because they have to, are signs of time. Even TV commercials have got in on it. One thing I know for sure, we won't have any shortage of "conversation topics" to go around the table tonight.
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