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Why do they do it? Scammers and their mindset

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Very interesting article:

 You wonder whether they were just broke or thought they were a bit smarter than everybody else. Wonder if you got close enough, could you detect small stains of guilt on their white collars? Wonder, had the buttons to their consciences come undone?

When he reached for ice cubes, did it bother him that money was in the freezer? Did it shame her that she had to turn an extra bedroom into a closet for all those clothes she bought with money intended for children? Was she ever struck by pangs of remorse as she allegedly stole millions while masterminding the largest theft from a local government ever uncovered in the Washington area? Did they purse their lips with a bit of disgrace as they drank from the Versace tea set? Did the tea go down easily? Did their houses stand straight? The ones they bought from crooked deeds?

With so many scams recently against the public trust, one wonders: What goes through the minds of workers who scam and steal and defraud the government of money that is not theirs?

On a recent morning, you slip into the back of a wood-paneled courtroom in U.S. District Court to witness the penitence of the captured. The defendant, Brenda Belton, has pleaded guilty to stealing from the school system by arranging illegal school payments and contracts for herself and friends. As the prosecutor tells the judge how Belton stole money that could have gone to underprivileged students, Belton sits at the defense table, her head held in her left hand. You notice a thin gold bracelet slide down her wrist.

When it’s her turn to speak, she rises uneasily, puts on glasses and reads: “I did not start out trying to scheme. . . . What I did was wrong. I am so very, very sorry. I never intended to hurt the children of the District of Columbia.”

“At one time I wanted to commit suicide because I thought I had nothing to live for,” she says later. “I have realized I am not a worm in a rotten apple to be thrown away.”

Before Belton takes her seat, Judge Ricardo M. Urbina asks the million-dollar question: “While you were pilfering this money . . . what were you thinking . . . knowing this was money being diverted from projects and children?”

For a moment, the question seems to push her off balance. Belton, who was chief executive of the D.C. school board’s Office of Charter School Oversight and has a doctorate, seems bewildered. Then she begins the tale as if her life depends on it.

“This did not start as a scheme,” she says. “It was a process. I was trying to get things to children. I did not see myself giving contracts to friends and family. I was trying to usurp what I thought was an entangled bureaucracy. One step led to another and I found myself having to lie and cover for things put out. . . . I don’t know what was going through my mind. I’m not that person who said, ‘Let me take things.’ ”

There is a heavy silence in the courtroom.

“All right,” the judge finally says.

Belton sits down. She coughs slightly.

The judge later scolds her. “I have to say this: I was very unimpressed by your explanation to my question,” he says. “. . . This city deserves better.”

Experts who study those who defraud, embezzle and steal from the government say they are no different from other criminals. They swim just as easily in rancid waters.

“This is how their minds work,” says Terrance Lichtenwald, a clinical psychologist in Illinois who has written profiles of white-collar criminals for clinical studies and forensic journals. “They are going to be nice to you. The face they present to you will be very charming.”

Grandiose, cunning and manipulative faces. They are often like creatures in mythology, he says. Beautiful on the outside and rotten within. Enticing like the sirens. Often wearing two faces.

When you look into their backgrounds, you might find they have a sense of entitlement. Some have wrath. Some have resentment, envy. “They will not have empathy for their victims who they have ripped off,” Lichtenwald says, “and how people will have to pay more money for what they did.”

And then, when they are caught, sometimes they will prey on the public’s sympathy for white-collar criminals. “They give this notion that we could all be in that situation,” Lichtenwald says.

“Typically, in white-collar court cases, everybody puts on a tie and goes to court and they say, ‘Look at me. I am just like you.’ That is called the chameleon effect. They try to blend in. They hope the jury will say, ‘She’s like me. She is okay. She just flipped.’ ”

You step into another courtroom, trying to determine the mind-set of the scammers. There is Sandy Jones, pleading guilty to first-degree fraud for stealing money from the chess club of Anacostia’s Moten Center, a school for emotionally disturbed elementary school students. The prosecutor says Jones stole about $30,000 by presenting over-the-counter withdrawal slips and writing checks payable to herself, forging the signatures of other people. In the memo line, she wrote, “chess membership.” After the hearing, Jones does not explain to reporters what she was thinking when she took the chess club money.

We don’t know what Harriette Walters, accused of orchestrating fraud in the city’s Office of Tax and Revenue, said in the statement prosecutors describe as her confession. So we don’t know what she may have been thinking all those years while allegedly approving six-figure refund checks, enriching herself and others.

Frank Perri, a criminal trial lawyer and certified fraud examiner in Illinois, says some white-collar criminals rationalize their actions by saying they will take a little money, then return it later. “In reality, they don’t put the money back,” Perri says. “There are those who just want to take a little and there are those who go in with the belief they will take as much as they can even if it means bringing the whole organization down. . . . Every day, they go to work thinking about the scam.”

Sometimes it is in the statements of the guilty that one might parse slivers of reasons for the why. What they were thinking. Small windows of hell open within their statements — the deeds getting out of hand, the lies told to cover them up, the manipulation, paranoia, fear that they will get caught. Then the windows shut abruptly.

In their statements, they often mention atoning to a higher power, and they seek forgiveness from family and friends and those they betrayed. They often cry. And you wonder whether the tears come because they were caught. And they close their statements saying they will do everything in their power to make amends. And the watchers wonder just what that could be. How does one wipe away fraud?

Jack Abramoff, the once powerful lobbyist who pleaded guilty to fraud, tax evasion and conspiracy to bribe public officials, explained his deeds last year to a U.S. district judge: “Your honor,” Abramoff said, reportedly looking sheepish, “words will not be able to ever express how sorry I am for this, and I have profound regret and sorrow for the multitude of mistakes and harm I have caused. All of my remaining days, I will feel tremendous sadness and regret for my conduct and for what I have done. I only hope that I can merit forgiveness from the Almighty and from those I have wronged or caused to suffer.”

Former congressman Randy “Duke” Cunningham (R-Calif.), who served time for taking $2.4 million in bribes, explained in a 2005 news conference, “. . . Because I was not strong enough to face the truth . . . I misled my family, staff, friends, colleagues, the public — even myself. . . . The truth is — I broke the law, concealed my conduct and disgraced my high office and the trust of . . .” At that point, he stopped reading and stifled tears. Then he continued: “In my life I have had great joy and great sorrow. And now, I know great shame.”

You see shame, maybe. Then hubris.

Ivanhoe Donaldson, a former mayoral aide to Marion Barry, was convicted of a felony for repeatedly stealing city money by approving false city contracts and writing checks on a special administrative fund he controlled. After he finished serving his prison time, paid restitution and returned to work advising public officials, he told The Post, “There are those who would like to see me spend my life in some abstract purgatory. But I am a damn good manager. I get things done.”

Some suffer from pride, says Perri, pride that cloaks guilt.

Michael Lorusso, a city government leasing official who pleaded guilty to two counts of accepting bribes, testified last year in a federal case against a developer. Lorusso bragged about his deeds. Even on the printed page of a court transcript, his tales seemed swollen with the sense that he was emboldened by the corruption, that the false deals gave him a sense of being bigger than what he was.

“On my signature, I could take anything I wanted in the District,” Lorusso told the court.

There is often a method in their mad schemes: They start by stealing a little change, and when nobody seems to notice the little that is missing, they become braver, stealing a bit more, becoming a bit more conspicuous until years have gone by and they have accumulated stolen wealth.

James W. Cooper, a former assistant U.S. attorney, prosecuted the case against Barbara A. Bullock, the former president of the Washington Teachers’ Union who pleaded guilty in 2003 to charges that she embezzled $5 million in union money. While testifying against two fellow union members, Bullock told how she and two others used the money to buy anything they wanted: silver flatware, a catered wedding, Washington Wizards tickets, a custom-made $40,000 fur coat.

Cooper asked in court: “Miss Bullock, would it be fair to say you like to shop?”

“No, that’s not fair,” Bullock said. “I love to shop.” She later told the jury: “I like jewelry. I like china. I like crystal. I like shoes. You name it.”

Cooper, who spent 10 years prosecuting fraud cases and is now a partner at the Arnold & Porter law firm, says thieving government workers often rationalize their stealing. “Frequently,” Cooper says, “people think they are justified because they do extra work that is unrecognized. With public employees, they might think they are uncompensated for work they do. Although they are stealing, they think they deserve the money.”

And, he says, they think they can get away with it. “They think people around them are not smart enough to see and detect it.”

Are they smarter than everyone else? “There are plenty of cases in which criminals are pretty dumb, but there are sophisticated frauds that require smart people to carry them out and keep them going,” Cooper says. “It’s just that most of the time once an investigation has started, they are not smart enough to figure out how to defeat it.”

When the end came for Barry Webne, all he could do was sit at home and wait.

Webne, who now advises businesses about detecting fraud, had worked as the controller for a small manufacturing firm in Cleveland. His pay did not cover his stack of bills at home. The pressure from the bills weighed on him. “I thought the only way out was to steal,” Webne says.

His crime started small. “I doubled my pay.” Over the next four years, he would secretly award himself raises and bonuses. The stolen money eventually added up to more than $1.2 million, Webne said. The more he stole, the more he descended into guilt, shame and greed. He couldn’t stop: “You have a money tree growing in the back yard,” he says. “Why cut it down?”

“I wasn’t thinking about consequences. I wasn’t thinking about going to jail. All I was thinking about was satisfying my financial need. After you do it for four years and get away with it, you start feeling you will never get caught.”

When Webne’s wife asked about the money, he lied.

But at work he was getting sloppy. One day, someone in the corporate office noticed. He was fired.

He sat at home for three months “waiting for the other shoe to drop.” Then one day, two FBI agents knocked on his door. “My heart fell out of my body,” Webne says. “Part of me was scared to death. I didn’t know what they were going to do. The other part of me was happy and relieved it was finally over. I didn’t have to look over my shoulder any longer. I took them down to my office,” in the basement. “I confessed.”

Written by Leisureguy

13 December 2007 at 12:08 pm

Posted in Business, Government

Tagged with ,

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