Wednesday, April 20, 2011

Reuters on FBI Efforts to Profile White-Collar Criminals

Matthew Goldstein from Reuters wrote a fascinating article "Special Report: From Hannibal Lecter to Bernie Madoff" about FBI efforts to profile white-collar criminals (PDF link, video link).
(Reuters) - Bernard Madoff -- the architect of history's biggest Ponzi scheme -- and Gary Ridgway - the Green River killer -- would seem to have little in common aside from being branded as "monsters" in the tabloids.
But a team of FBI agents, the same ones who specialize in helping local police track down serial killers like Ridgway, are using their expertise in behavioral profiling to target white collar criminals like Madoff.
For about two years now, agents with the Federal Bureau of Investigation's Behavioral Analysis Unit have been consulting with their colleagues in New York who specialize in securities fraud detective work. The BAU agents are going over the case files put together by the FBI for Madoff and other convicted scammers like Bayou Group's Samuel Israel, whose $400 million hedge fund turned out to be Ponzi scheme, and former Democratic fundraiser Hassan Nemazee, who stole nearly $300 million from Citigroup and two other big banks.
The hope is the BAU agents, whose work in profiling serial killers has been popularized in books, movies and on TV, can get into the minds' of fraudsters and see what makes them tick.
In cinematic terms, substitute Gordon Gekko, the insider trader in "Wall Street," for Hannibal Lecter, the cannibalistic serial killer in The Silence of the Lambs, and you get an idea of what the FBI is trying to do.
I was interviewed by Reuters for this article and explained that while I am a fan of FBI efforts to profile white-collar criminals, it won't be an easy task for them.
In a recent interview, Antar told Reuters that FBI profilers are right to be wary of putting too much stock into interviews with white collar felons because they'll often say what a questioner wants to hear. In his view, once people become a scamster it's hard for them to ever really change.
"People like to ask me if I am redeemed," said Antar. "I like to say that I am possibly retired. The only reason I stopped was because I got caught."
Most white-collar criminals are very clever in evading detection by law enforcement and avoiding skepticism from their their victims. They build walls of false integrity around themselves to increase the comfort level of their victims. According to various studies conducted by the Association of Fraud Examiners (ACFE), over 90% of white-collar criminals don't have previous criminal records (see page 69). The higher the economic value of the crime, the less likely it is that the perpetrator had a previous criminal record.

Additional insights into white-collar criminals can be found in the Reuters video interview clip below (Interviewer Jen Rogers):



Hopefully, the study of criminology won't be limited to the FBI, other law enforcement agencies and a few academics. I'd like to see all colleges and universities require every student take at least one course in criminology. Criminals know much more about exploiting human nature than society knows about how they do it.

Written by:

Sam E. Antar

Reaction to Reuters Article

Clinical Forensic Psychology - Criminal Profiling: From Hannibal Lecter to Bernie Madoff by Patricia Zapf

Fraud Files - Implied credibility given to white collar criminals (and others!) by Tracy Coenen

Keep Your Eye on Fraud - Profiling Today’s White Collar Criminal by the FBI – Voodoo Law Enforcement? by Bruno Pavlicek

Daily Speculations - Profiling Ponzi-ists, from Pitt T. Maner III


Disclosure

I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped my cousin Eddie Antar and other members of his family mastermind one of the largest securities frauds uncovered during the 1980's. I committed my crimes in cold-blood for fun and profit, and simply because I could.

If it weren't for the heroic efforts of the FBI, SEC, Postal Inspector's Office, US Attorney's Office, and class action plaintiff's lawyers who investigated, prosecuted, and sued me, I would still be the criminal CFO of Crazy Eddie today.

There is a saying, "It takes one to know one." Today, I work very closely with the FBI, IRS, SEC, Justice Department, and other federal and state law enforcement agencies in training them to identify and catch white-collar criminals. Often, I refer cases to them as an independent whistleblower. I teach about white-collar crime for professional organizations, businesses, and colleges and universities.

Recently, I exposed GAAP violations by Overstock.com which caused the company to restate its financial reports for the third time in three years. The SEC is now investigating Overstock.com and its CEO Patrick Byrne for securities law violations (Details here, here, and here).

I do not seek or want forgiveness for my vicious crimes from my victims. I plan on frying in hell with other white-collar criminals for a very long time.

I do not own any Overstock.com securities long or short. My investigation of this company is a freebie for securities regulators to try to get me into heaven, though I doubt I will ever get there. My past sins are unforgivable.

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