Being a displaced Brit from north of the U.S. border, I frankly don’t have a whole lot to contribute to the Commercial Fraud newsletter on U.S. statutory issues. I can wax lyrical on the subject of the status, on discharge, of debts arising from fraud in a personal bankruptcy administered under the Canadian Bankruptcy and Insolvency Act, if requested, but it is a pretty arcane topic and frankly rather dull. So what I thought I might do to maintain status as a contributing editor is attempt to take a look at those that give rise to our continuing employ.
For example, whatever happened to the unrighteous who, once nicked, gave up quietly and confessed? My childhood television years in the United Kingdom were filled with cops-and-robber shows cast with these types—rather dull shows really, where the rogue hearing the words “you are under arrest” instead of taking off in an exciting car chase or exchange of automatic weapons fire would say, “It’s a fair cop Guv, I done it and I knows it was wrong!” This was followed by the scene where a stern-faced magistrate sent him off to the “stir” to do his “porridge,” and we all learned that crime didn’t pay.
The first commercial crime I ever came across was as a young articled clerk. I think I was 19. I found it during the audit of a small town where the boardroom in which I sat to verify the town books was filled with brown boxes—as was the reception area, and the storage room— and indeed, on my second day I was moved down the board-room table as more of these boxes arrived and room had to be found for them. Curiosity got the better of me, and I gave up reconciling the cash books of the municipal rent collectors of the council-owned housing and took a peek. They all came from a stationery supplier and were marked “carbon paper.” A quick run-through the weekly disbursement lists showed continuing payments to that supplier. These lists were all properly signed by the clerk of the council as being approved by council, attached to the minutes of the council meeting and duly circulated to councilors. So all looked well.
When my boss, the audit manager, arrived later that day, he got quite excited (for an accountant), and further investigation followed. We calculated that over a span of four months, the town had bought enough carbon paper to last 144 years.
The boss’s boss—the partner—arrived very early the next morning, and after a few minutes of review, we were off to see the mayor. And later that day, there was a confrontation with the municipal manager and his subordinate, the municipal treasurer, who both immediately confessed to being taken to Town (as London is known in the vernacular of provincial England) and wined and dined and “clubbed,” after which they signed a contract with their benefactors, who turned out to have the pictures, for these huge quantities of over priced paper. Resignations were immediate, and charges were laid. (I am not sure what happened to the “salesmen.”)
That never seems to happen these days. Someone else always did it. Lord Black didn’t steal the money—at least, he says not—and 12 (or is it 18) people will have to make up their own minds. It wasn’t Ken Lay’s fault—or so he said. And in the case of the court-directed winding up of rotten investment businesses, which has become my day-to-day living, the rogue often points at the Liquidator. “Honest Guv, it was all there when I left—it must have been the liquidator what nicked it—I’ll bet he paid off his mortgage!!”—words often spoken from a remote and exotic location safe from the fear of extradition. The trouble is that defrauded investors sometimes want to believe that, and not that they put their faith in a crook who bolted with their life savings. The efforts of investors to defeat the efforts of the only person likely to get any of their money back, based on the “truth” as spoken by the rogue, is perhaps for discussion another day. In the meantime, whatever happened to the honourable thief?