Mortgage Fraud - Chuck Gallagher Ethics Speaker Discusses FBI Report

In an effort to deter mortgage fraud the FBI has listed (from their investigations) typical fraud schemes. Some are listed below:

Backward Applications: After identifying a property to purchase, a borrower customizes his/her income to meet the loan criteria.

In effect the borrowers determine from the lender what the criteria should be to qualify for the mortgage loan. Then income is "customized" or fabricated to meet the criteria. This sort of fraud is usually a single loan fraud. The fraud can involve others - as mortgage professionals may coach the borrower thus participating in the fraud.

In many cases, as I've addressed mortgage industry professionals, we find that such frauds involve the mortgage broker knowing that they are paid based on production and production can't take place without sufficient income.

Air Loans: These are non-existent property loans where there is usually no collateral. An example would be where a broker invents borrowers and properties, establishes accounts for payments and maintains custodial accounts for escrows. They may set up an office with a bank of telephones, each one used as the employer, appraiser, credit agency, etc. for verification purposes.

These loans represent a clear intent to commit fraud. Many convictions this past year have involved the complete creation of fabricated documentation. Other than "money for nothing" these frauds when caught will result in prison time.

While presentations to industry professionals focus on various types of frauds and the consequences that follow...rarely have I seen this other than from experienced criminals.

The last fraud scheme identified by the FBI that will be reviewed in this blog is:

Silent Seconds: The buyer of a property borrows the down payment from the seller through the issuance of a non-disclosed second mortgage. The primary lender believes the borrower has invested his own money in the down payment, when in fact, it is borrowed. The second mortgage may not be recorded to further conceal its status from the primary lender.

This fraud is common especially with first time home buyers, low income buyers or those who are new at investing in real estate for profit. In some cases, borrowers don't see the fraud involved in this scheme. Based on experience there are two types of people involved: (1) folks who, as first time buyers, borrow the money from relatives and knowingly don't disclose to the lender (otherwise they wouldn't qualify) or (2) folks who clearly don't have the fund to purchase the real estate and use funds (401(k) loans, personal loans from relatives or friends. or personal loans from undisclosed lenders.

For information about presentations related to ethics choices and mortgage fraud contact Chuck Gallagher at http://www.chuckgallagher.com

Not Now Senator Grassley...Not Now! Hinn Delays Response. Business Ethics Speaker Gallagher Reviews

Several months ago Senator Charles Grassley, R Iowa, ranking member of the Senate Finance Committee, sent questionnaires to six ministries asking numerous financial questions - probing whether the pastors and their ministries were complying with IRS rules related to their tax exempt work.

The deadline was today and it appears that Binny Hinn Ministries of Grapevine (Grapevine, TX) and Benny Hinn World Healing Center Church, Inc. have stated that they will not respond to Grassley's inquiry until next year (2008).

According to the Associated Press:

"A lawyer for preacher Creflo Dollar of World Changers Church International in suburban Atlanta had said Wednesday that the investigation should be referred to the IRS or the Senate panel should get a subpoena for the documents."

"Only Joyce Meyer Ministries of Fenton, Mo., has provided the detailed financial and board oversight information sought by Grassley."

Several questions have been raised by both sides. Many of the ministries through their spokes persons have taken the position that they comply with the law and the IRS is the watchdog. Hence, they feel that Grassley has overstepped his bounds by making such a broad request.

Again, according to the Associated Press in a report in the Dallas Morning News:

"Grassley, an Iowa Republican, said in a Wednesday conference call with reporters that he "can't be impressed" by the argument from some of the preachers that the IRS already monitors them, because his past inquiries have unearthed information that the IRS never knew.

Grassley has insisted his investigation "has nothing to do with church doctrine" and is strictly concerned with making sure nonprofit groups are following the law."

Some of the ministries have suggested that Grassley get a subpoena if he plans on capturing the information he's requested. Should the ministries refuse to turn over the information, a very interesting court fight could ensue.

"Hopefully these organizations will work with us," said Grassley, who has been investigating nonprofit compliance with IRS rules for years. "I don't think I've had to issue a single subpoena in the five years that I've been trying to get cooperation from organizations."

So here are the questions and your comments are welcome:

What does not complying to Grassley's request mean to the ministries?

If one believed that they were fully compliant, would it be best to turn over the records or stand on principle (perhaps the belief that Grassley over reached)?

Since the IRS rules provide that a tax-exempt organization cannot be a conduit for excessive personal gain, is it possible to define that in a highly successful ministry?

For the record, the ministries targeted by Grassley's requests were, in addition to Hinn: Bishop Eddie Long of New Birth Missionary Baptist Church and Bishop Eddie Long Ministries of Lithonia, GA; Randy and Paula White of Without Walls International Church and Paula White Ministries of Tampa, FL; Joyce Meyer Ministries of Fenton, MO; Creflo Dollar of World Changers Church International in Atlanta, GA; and Kenneth and Gloria Copeland of Kenneth Copeland Ministries of Newark, TX.

Every choice has a consequence. In fact, in Galatians it states, "Do not be deceived, God is not mocked: for whatever a man sows, this he will also reap." As this unfolds the truth will be revealed...whatever that truth may be.

Comments?

Which Cities Top The List For Corporate Crime? Business Ethics Speaker Chuck Gallagher Comments

The Corporate Crime Reporter, a print weekly legal newsletter based in Washington, D.C., released a report on November 27th, 2007 naming Washington, New York, Los Angeles, Philadelphia, Boston and Newark are the corporate crime capitals of the United States.

“Every year, the FBI releases its Crime in the United States report,” said Russell Mokhiber, editor of Corporate Crime Reporter. “This report is misnamed. It is actually a report on street crime in the United States. It ignores corporate crime. So, while the Crime in the United States report documents rape, robbery, murder, robbery and assault – it ignores health care fraud, bribery, environmental crimes, and other major corporate crime prosecutions.”

“We believe that America deserves to know not only where most of the street crime is – but also where most of the corporate crime is being prosecuted,” Mokhiber said.

The Corporate Crime Reporter conducted a survey of 2006 prosecutions, settlements and sentences and the results identified the top six corporate crime capitals of the US.

“These are the cities where most of the corporate crimes are being prosecuted,” Mokhiber said. “New York is an obvious hub – that’s where Wall Street is and that’s where the money is. Washington is also an obvious contender – corporations rip off the government and government prosecutors act to recover the defrauded funds.”

“Federal prosecutors in Boston have developed perhaps the premiere health care fraud prosecution team in the country – outside of Washington,” Mokhiber said. “The U.S. Attorneys’ offices in Los Angeles and Philadelphia have both developed white collar and corporate crime expertise.”

Several interesting facts arose from the study. What is most obvious is that corporate crime is centered in our largest cities and money hubs. It would be no surprise that New York, Los Angeles and Washington are there based on their sheer size and the consolidation of business and power. What I don't see is a relationship between number of cases (prosecuted or settled) and size of the location. It would be interesting to see the top areas as a percentage not just by number.

Another issue is location and interest of federal prosecutors. As stated in the report, Mokhiber acknowledges that Boston and Washington focus on health care fraud while L.A. and Philly have developed white collar expertise. Again, is crime in these cities higher or is it that the prosecution effort is more focused?


As a business ethics speaker, I know, from presentations nationwide, that issues with ethics breeches and crime don't seem to be strongly centered in one geographic region or another. I fully recognize that larger metropolitan areas have more, just by the sheer numbers, but where people are gathered, when the components for crime exist (need, opportunity and rationalization) - there will be crime.

Do you believe that crime is centered in these cities (predominately) or do you think that corporate crime is alive and well where you are. Feel free to respond with your thoughts.

Red Cross President Mark Everson Ousted - Business Ethics Speaker Chuck Gallagher Discusses

As a frequent speaker on business ethics, I state often - Every Choice Has A Consequence. Whether those choices relate to a large enterprise, like Enron, one of the nations leading charities, The Red Cross, or just your personal life, it is clear daily that my statement to audiences nationwide is true.

Every Choice Has A Consequence!

Former commissioner of the Internal Revenue Service, Mark Everson took on the job of running the Red Cross on May 29th 2007. The charity had been the target of much criticism following it's response to Katrina. Having had now five leaders in the past six years, the charity struggles to regain its focus and public image.

According to many news stories, on Tuesday, November 27th the board of governors for the Red Cross accepted Mr. Everson's resignation after it was reported that Everson was having a "personal relationship" with an employee of the Red Cross - one of Everson's subordinates.
Several news sources are linked here:

http://fe6.news.re3.yahoo.com/s/ap/20071127/ap_on_re_us/red_cross_president

http://www.bloggossip.com/index.php?id=29698

http://www.time.com/time/nation/article/0,8599,1688266,00.html

The following comments are reported from an AP news story:

"The board acted quickly after learning that Mr. Everson engaged in a personal relationship with a subordinate employee," a statement said. "It concluded that the situation reflected poor judgment on Mr. Everson's part and diminished his ability to lead the organization in the future."

"I am resigning for personal and family reasons, and deeply regret it is impossible for me to continue a job so recently undertaken," he said. "I leave with extraordinary admiration for the American Red Cross."

Not only do choices and the consequences that follow have a direct personal impact, but they clearly impact those who are closest to you. As a man with children, his family well also be the unintended beneficiaries of Everson's actions. The pain that othes experience as a result of one's personal actions, are often the hardest to bear.

Having made choices in my past that had unexpected and unintended consequences, I understand the emotions behind the experience of the consequence. Perhaps, Mr. Everson will have time to evaluate his actions and other may come to understand that ethics in business or in one's personal life are critical if we wish to achieve positive results.

Business Ethics Speaker - Chuck Gallagher states - Michael Vick Facing Longer Prison Sentence

Many thought that Michael Vick would be sentenced to a year and a day for his conviction on "dog fighting." Some had said that he threw his career to the "dog" as it were, but with a short sentence and voluntarily surrending and starting the sentence now, it was thought that Michael might just be back in the game for the '08 year.

Not so fast. today two of Michael Vick's co-defendants in the federal dog-fighting case received sentences at the high end of the Sentencing Guidelines range. Now there is some thought that Vick might face a longer prison term at his sentencing in December.

According to the Associated Press, "A federal judge made clear his disdain for animal cruelty when he sentenced two of Michael Vick's dogfighting cohorts to 18 months and 21 months in prison Friday.

"You may have thought this was sporting, but it was very callous and cruel," Judge Henry Hudson told Quanis Phillips of Atlanta, who received the longer sentence.

The prison terms for Phillips and Purnell Peace of Virginia Beach are a little longer than prosecutors recommended, but less than the five-year maximum Hudson could have imposed.

Vick still could get a sentence above the negotiated range in his case -- a year to 18 months -- if (Judge) Hudson concludes 27-year-old Vick is more culpable than the others because he admitting bankrolling the operation and providing gambling money.

According to court papers, Vick not only financed the "Bad Newz Kennels" but also participated in executing several underperforming dogs by drowning, hanging and other means. "

Should Vick be sentenced to the mid to upper range of the sentencing guidelines, he would be out for at least half of the '08 NFL season.

Every choice has a consequence!

My guess is Michael Vick would have never considered this as a result of his actions. Frankly, neither did I expect the consequences I received. My misdeeds were illegal and I deserved the punishment I received. But, during the time of the illegal actions, I never expected prison.

Hopefully, Vick will use his influence to help others so that they don't face the consequences that he is facing today. Holidays behind bars are no fun.

As always, your comments are welcome.

Business Ethics Speaker - Chuck Gallagher - signing off...

Texas Man Sentenced to 40 Years for Mortgage Fraud - Dude That's Over Half His Life!

There is a wonderful blog called the "Mortgage Fraud Blog" http://mortgagefraudblog.com that is a good resource for information on this specific type of fraud. On November 27, 2007 the following was reported as is quoted here:

Stevie L. Johnson, a former licensed Escrow Officer, was sentenced to 40 years in prison for his part in a multi-million dollar mortgage fraud scam in the Houston, Texas area. The case involved the fraudulent acquisition of mortgage loans associated with approximately 300 residential properties valued at nearly $40 million. The prosecution was the result of a long-term investigation by the Consumer Fraud Division of the Harris County District Attorney’s Office and the Texas Department of Insurance (TDI) Fraud Unit. TDI is the state regulatory agency responsible for licensing title insurance companies, title agents and escrow officers.

Two other defendants in the case were previously convicted for their part in the fraud scheme; Mark A. Jones was sentenced to 25 Years by the 232nd District Court and Reginald Washington was sentenced to 8 years by the 184th District Court.

Markay Stroud, the Assistant District Attorney in Harris County responsible for prosecuting Johnson‘s case, emphasized that the investigation is ongoing and additional indictments are expected.

Earlier this year, the 80th Texas Legislature took action to address mortgage fraud by creating the Texas Residential Mortgage Fraud Task Force under House Bill 716, authored by Rep. Burt Solomons (R-Carrollton) and Sen. Kip Averitt (R-Waco). The 2007 legislation was intended to reduce false or misleading information on residential home loan applications by increasing cooperation among regulators and requiring new disclosures at closing.

Now, I'll be the first to say, I don't know Mr. Johnson's age, but unless he started his mortgage/escrow career as a teenager, he'll likely either die in prison or exit as an old man. Neither is a fitting way to end one's life.

As a national business ethics speaker, I speak around the country about one primary topic: Ethics = Choices and Consequences. Every choice has a consequnce! No matter what we might think or how we might rationalize it - Every choice has a consequence.

Was Mr. Johnson just a bad, unethical man? Some, who are quick to judge might say yes - otherwise how could he have committed such a crime? My guess, however, is that he didn't start out unethical in his profession. Rather, the perfect storm existed for his crime to be committed.

The "perfect storm?" Yep...and here are the three components: Need, Opportunity and Rationalization. When those three are present, in many cases, an otherwise ethical person may make unethical decisions - under the illusion that it's really O.K.

Now, I can't speak for Mr. Johnson, but I can speak for myself. That was exactly the sequence in the fraud that sent me to Federal prison.

So how do we create a way to keep the storm from brewing? As I consult with companies I find three things to be true: (1) if you evalutate your employees for example, you can often see when the need issue arises (without a severe need there is no fuel for the fraud); (2) a good system of internal controls reduce the opportunity (and without opportunity one cannot perpetrate the fraud); and (3) keeping people focused on right behaviors - consistently - helps to eliminate or difuse "rationalization."

For information on programs that might help your organization on ethics and anti-fraud visit my web site at www.chuckgallagher.com

Comments are welcome...

Business Ethics Speaker - Chuck Gallagher signing off...

Mortgage Fraud - 30 Years in Prison - Business Ethics Speaker Chuck Gallagher Asks - Excessive?

O.K. I say often - Every choice has a consequence! I live and breath that concept. I've lived it - serving time in prison. But, I have to ask in these comments - Is 30 years excessive?

According to the White Collar Crime Prof Blog the following was stated: "United States Attorney's Office for the Southern District of Florida issued a press release that Samantha Johnson and Scott Warren Johnson, husband and wife, were sentenced following their guilty please to "a wide-ranging mortgage fraud scheme." The sentences were 60 months for Samantha Johnson and one year for Scott Johnson. The press release said that they received "in excess of 2.5 million in ill gotten gains."

Now compare this to the sentence received by Chalana McFarland, a first offender who was sentenced for mortgage fraud (see here) to 30 years imprisonment for her role in an extensive mortgage fraud scheme that skimmed $20 million from the sale of over 100 homes from 1999 to 2002.

Why such a disparity in sentence? Could it be that the first group of individuals plead guilty and the second person risked trial? When the stakes are so high, do you really have a constitutional right to a jury trial?"

The White Collar Crime Prof Blog goes further to state:

30 Years to Non-violent First Offender in White Collar Case

The case of Chalana McFarland, pending in the 11th Circuit, is a case that should be closely watched as it involves a sentence of 30 years for a non-violent first offender in a white collar case. The defendant argues that this sentence is unreasonable. The preliminary briefs are below:

Download final_11_cta_brief.pdf

Download appellee_brief_feb_28_06.pdf

Download mcfarland_reply_06.pdf

The parties also filed briefs in response to the Rita case. As noted in McFarland's supplemental brief -

"Ms. McFarland also has a young child and has lost her reputation in the legal community as well as in the general community. Her incarceration has been very difficult for her parents and young child. If President Bush is correct that Libby's sentence of 30 months is 'excessive' than surely Chalana McFarland's 360 month sentence is excessive as well, and should be reversed."

So here are the questions:

(1) If President Bush said that Scooter Libby's sentence was unreasonable, what do you think about this sentence?

(2) Was this sentence the outcome of electing to take advantage of the constitutional right to a jury trial vs. pleading?

I elected to plead guilty to my crimes and had the agreement with the U.S. Attorney as to the length of sentence according to the sentencing guidelines. Today, I share with businesses and associations that - Every Choice Has A Consequence. http://www.chuckgallagher.com

But 30 years...Wow!

Any comments?

Post Katrina Bribery - Corruption Doesn't Pay Says Business Ethics Speaker - Chuck Gallagher

Today a Grand Jury handed down an idictment against members of "The Scruggs Law Firm" for alleged bribery of Third Circut District Court Judge, Henry Lackey, of the State of Mississippi. According to the indictment Scruggs tried to bribe Judge Lackey with $40,000 to provide a favorable ruling on a case they were a party to.

To read the indictment see the following link: http://online.wsj.com/media/LB_wsj071127-show1_case_doc.pdf

Smart...real smart. How often do folks think that somehow there isn't a consequence to choices they make. Every Choice Has A Consequence!

As a business ethics speaker, I understand that fundamental law of the universe so well. I, too, felt that choices made could avoid consequences. Wrong! You cannot avoid the consequences of your choices and actions. You may not see them immediately and often the time between choices and consequences create the illusion that they don't exist. They do.

The story has all the trappings of a good John Grisham book. The problem is - the outcome will likely be prison...a place I've been and don't care to go again.

In my newest presentation, "The Truth About Consequeces," I explore with business groups the reality about the choices we make and the consequences - either positive or negative - that can follow. For information about that presentation, contact me at http://www.chuckgallagher.com/contact.html

Read the indictment and offer your comments here.

Business Ethics Speaker - Chuck Gallagher - signing off...

How Much Is Three Years in Federal Prison Worth?

While there are those who would disagree with me - I feel that there is no amount worth the pain of prison. Having been there myself, I speak from experience.

But the Department of Justice released today that the former president and owner of ATE Tel Solutions, Rafael G. Adame, will spend three years in prison following his conviction for his involvement in a scheme to defraud the federal E-Rate program. The E-Rate program subsidizes the provision of Internet access and telecommunications services, as well as internal computer and communications networks, to economically disadvantaged schools and libraries.

The news release is attached: http://www.usdoj.gov/opa/pr/2007/November/07_at_936.html

According to the news release, ” Adame was convicted of submitting fraudulent invoices for payment to the Schools and Libraries Division of USAC from December 2001 to May 2003. As a result of the scheme to defraud the E-Rate program, Adame fraudulently obtained $106,514 in payments from USAC.”

$106,000+ in theft = three years in federal prison? I don’t get it. But then again, I did something equally as dumb and paid the price. Adame will now come to know the lesson: Every Choice Has A Consequence.

As a business ethics speaker and Senior Sales Executive in a public company, I speak to groups nationwide about choices and consequences. In fact, my most recent presentation is entitled - The Truth About Consequences! While every choice has a consequence - the fact is we can determine whether the consequence is either negative or positive.

For information on Chuck's presentations visit his web site: www.chuckgallagher.com

Multiple Guilty Pleas and 433 Months in Prison - And That's Just In Three Days!

Seems that it's been a busy week for guilty pleas and sentencing for Mortgage Fraud and related crimes.

Let's start from the beginning of the week. The multiple members of the Dorean Group were found guilty of multiple counts of various types of fraud in a scheme to eliminate client's debt. Their scheme involved creating mortgage and home equity fraud in order to obtain hundreds of thousands of dollars in home equity loans from unsuspecting lenders. The scheme covered investigations in California, North Carolina, South Carolina, Texas, Utah, Washington, Florida, Montana, Nevada, and Colorado. Their sentencing is set for March 18, 2008. Expect their sentence to be stiff - certainly not "Club Fed" for them.

Then theres Anthony Belletteiri, a real estate attorney, who was sentenced to 121 months in prison for his creative and elaborate scheme involving his law firms corporate and escrow bank accounts - using funds marked for real estate closings. Belletteiri also admitted that he stole approximately $2 million from a client, falsely telling the client that he had invested the client’s money in private mortgages. In order to conceal his theft, he created phoney mortgage documents, which he provided to the client, so that the client believed that his money was secured by mortgages, when it was not. This (former?) attorney was ordered to surrender to Federal prison on December 26, 2007 to begin serving his sentence. At least he got some grace in that he will be able to enjoy his last holiday season for a long while with his family - a small gift.

According to the Mortgage Fraud Blog (an excellent source for mortgage fraud information), Wesley Snyder, age 71, plead guilty to fraud for his mortgage scheme. The mortgage fraud blog reports, "Snyder defrauded more than 800 individuals throughout Central and Eastern Penn. via his “Wrap Around, Equity Slide Down Discount” Mortgage Program and his “Mortgage Participation” Investment Program. The charge carries a potential penalty of 30 years imprisonment and $1,000,000 fine." It would appear that once incarcerated he may never see freedom again in his lifetime. I am confident that once confined, he will have many nights sleeping on a thin prison mattress wondering if it was worth ending his life in confinement?

Bang the gavel drops and Matthew Bevan Cox, age 38, is sentenced to 26+ years. In the federal system, one must serve 85% of one's sentence...so Matthew will be a little over 60 years old when he's released. Every choice has a consequence! In this case Mr. Cox made choices that will mean that, what is typically some of the most enjoyable and productive years of one's life will be spent in prison - working for 12 cents per hour. He and his girl friend ran mortgage and real estate scams that spanned several south eastern states.

"Cox will now be serving the long prison sentence he deserves for his crimes,” said United States Attorney David E. Nahmias in Atlanta. “While the subject of a nationwide manhunt, Cox repeatedly used the stolen identities of minor children, the homeless and others to place multiple fraudulent loans on the same property without the knowledge or consent of the true owners. His crimes resulted in clouded property titles in several states with years of unresolved litigation, a trail of over 100 victims, and millions of dollars in losses that cannot be recovered.”

“The Secret Service has taken an aggressive stance in the prevention and investigation of mortgage fraud and other forms of identity theft”, said James Byers, Special Agent in Charge of the United States Secret Service Atlanta Field Office. “This case shows both the wide-reaching effects of identity crimes as well as the importance of cooperation among law enforcement to focus resources and respond effectively to uncover and prevent this type of financial fraud.”

Every choice has a consequence. On a personal level I feel for the people mentioned above. Not to be mistaken, I do not in any way condone their crimes or actions - I don't. I just know that since every choice has a consequence, the price paid will be significant. Perhaps they will find, like I, that they can make their time in prison useful - either for themselves or for others.

As a business ethics speaker, I know first hand the pain of incarceration, as I've been there. I also know that no matter what someone might believe, you cannot escape the consequences of your choices. Likewise, if you make positive ethical moral choices the results can be quite remarkable. I, too, am living remarkable results.

For more information on presentations I make...feel free to visit my web site: http://www.chuckgallagher.com

Any comments?

Texas Ethics Speaker - Chuck Gallagher - signing off...

Texas Motivational Speaker - Gallagher - Reflects On Michael Vick's Incarceration

According to the U. S. Marshalls service, Michael Vick, former Atlanta Falcon’s quarterback, turned himself into authorities today to start serving a prison sentence for his conviction for running an illegal dogfighting ring. Vick turned himself in around noon and is being held at Northern Neck Regional Jail in Warsaw, Virginia, until his sentencing hearing scheduled for December 10th.

CNN reported the following shown in italics -

Vick pleaded guilty in August after three associates admitted their own roles in the operation and agreed to cooperate with prosecutors.

“From the beginning, Mr. Vick has accepted responsibility for his actions and his self-surrender further demonstrates that acceptance,” Vick’s attorney, Billy Martin, said in a statement.

“Michael wants to again apologize to everyone who has been hurt in this matter and he thanks all of the people who have offered him and his family prayers and support during this time,” Martin’s statement said.

Don’t Miss

• Vick co-defendant pleads guilty to dogfighting

CNN Senior Legal Analyst Jeffrey Toobin speculated that Vick started his sentence early “to get it out of the way.”

“Also, by surrendering before he’s sentenced on December 10, he shows a measure of remorse to the judge who will sentence him and I think he hopes will get a somewhat lesser sentence because the judge does have some discretion,”

With Vick now behind bars several questions loom:

(1) Will Vick’s voluntary reporting for his sentence sways the judges decision to show some mercy at his sentencing hearing?

(2) With Vick suspended indefinitely by the NFL, will his acceptance of responsibility soften the NFL’s stance toward Vicks return to football?

(3) When his sentence is complete, will Vick use the experience and his fame to positively influence the lives of those who have faithfully followed his career?

As a motivational speaker - I speak frequently to businesses, associations as well as colleges and universities on the subject of Ethics and Choices. Every choice has a consequence. Michael Vick enjoyed, what he felt was the sport of dog fighting. It is not my intent to debate whether that action was a sport or not. What ever I might believe, reality is - that action was illegal and Vick today gained a taste of reality as he faced the first night of his incarceration.

I remember my first night and I can say with clarity of mind…it was not fun - nor would I wish it for anyone. I wish Michael the best in his new found circumstances. Likewise, I hope he gains personal insight and the wisdom to use this experience not only for his own good, but the good that he can bring to others.

Every choice has a consequence.

Texas Motivational Speaker - Chuck Gallagher signing off…

There's No Such Thing As Business Ethics - Yea Right!

I’ve heard that statement, “There’s no such thing as business ethics!” said way too many times. The arguement is that businesses don’t have ethics - people do. Therefore, there is no such thing as business ethics.

As a motivational speaker addressing corporations and associations on business ethics from coast to coast - my response is - Bull!

If that is true (there is no such thing as business ethics) then the appeal by Enron CEO Jeffrey Skilling of his 24+ year prison sentence is doomed. Seems that Skilling and his legal team are relying (in part) on the Fifth Circuit’s decision in U.S. v. Brown that limited the “right of honest services” theory when the defendant believes he or she is acting in the corporation’s best interest as defined by management. In simple terms, if the corporate employee is acting in the corporations best interest or under the direction of management, then they can’t be guilt of “fraud”.

According the the White Collar Crime Prof Blog (http://lawprofessors.typepad.com/whitecollarcrime_blog/) ”The government argues that Brown does not apply because it is limited to lower-level employees and not a CEO who it describes as the leader of the fraud. The problem with that argument, however, is that Brown does not seem to create a “CEO exception” to its analysis of the applicability of honest services fraud theory in a private setting in which the company is the victim of the fraud.”

There are numerous legal issues at play and not the prime subject of this blog. Rather, in laymans terms…Skilling was found guilty of (simply put) unethical conduct - fraud, consispracy, etc. Skilling was guilty because, as CEO, he acted in a manner that was unethical and costly to those who placed there confidence in he and Enron senior management.

Personal ethics only…? No such thing as business ethics?

Simply stated, looking at the complex legal arguements in Skilling’s appeal and the governments response - the arguement seems to strongly indicate that businesses have a legal existence and “soul.” If I’m acting at the direction of management then the “honest services fraud theory” would apply. Business ethics 101 as far as I can see.

After each Business Ethics keynote speech I give…there is at least one who just has to say that business ethics doesn’t exist. I do understand where they are coming from. Yet, most every business I encounter has a culture - a spirit if you will. And, that spirit, soul or corporate culture is the foundation of that enterprises - business ethics.

Not only is there business ethics - but it is now, as best as I can see, becoming part of legal defense against fraud, etc.

Interesting. Your opinion?

Ministry Accountability - What Do Benny Hinn, Kenneth Copeland and Eddie Long Have In Common?

In an age of increased corporate accountability under the Sarbanes-Oxley rules, it seems that Senator Chuck Grassley, ranking member of the p0werful Senate Finance Committee, is seeking detailed information from six major ministries concerning the application and use of their members contributions.

From his news release on November 6th the following is stated: “Grassley has reviewed a wide range of non-profit issues over the last five years, first as Finance Committee chairman and now as ranking member. The committee has exclusive Senate jurisdiction over federal tax policy, including the policy governing the billions of dollars donated to and controlled by the nation’s tax-exempt groups.”

He goes further to say, “I’m following up on complaints from the public and news coverage regarding certain practices at six ministries,” Grassley said. “The allegations involve governing boards that aren’t independent and allow generous salaries and housing allowances and amenities such as private jets and Rolls Royces. I don’t want to conclude that there’s a problem, but I have an obligation to donors and the taxpayers to find out more. People who donated should have their money spent as intended and in adherence with the tax code.”

What do you think about Senator Grassley’s request? Do you feel that prosperity enjoyed by church leaders is unethical? Should the Government be involved in the affairs of the Church? Are these individuals being singled out or is there a broader issue at play?

Every choice has a consequence. Is it possible that opulent prosperity can go too far?
To read the news release see:

http://www.senate.gov/~finance/press/Gpress/2007/prg110607.pdf

What do you think?

Working and Ethics in America

From a recent blog I read I share the following and ask you to comment on your perception of “work ethics”:

I recently read a newspaper article on attitudes towards work.

America: The more you worked, the more you billed, and more the profit you generated for yourself and your company.

France: The fewer hours you work, the more vacation you take, more the time you get to grumble about the state of the universe, and smarter you feel.

Australia: On Mondays, they would talk on how they enjoyed the just-ended weekend; on Thursdays, the talk would be on what one would do on the coming weekend; on Friday afternoons they would not be any talk as they are already driving off to the nearest beach or hill ranges.

Urban India: When I meet software professionals, I see that the talk is like as in America – billings and profits. While attitudes of work are seen in some other areas of businesses, most others exude a chalta hai attitude; anything will do; performance and good work be damned !

The question for this blog is not about other countries, but more about what you think.

What does “work ethics” mean to you?

Is it more “ethically” sound to achieve your personal goals or to achieve the goals of the employer?

Is it possible to meet both?

Has the strong focus on business performance in America helped or hurt our country?

Feel free to respond- the commentary should be interesting!