A Felon’s View of White-Collar Crime - Why Society is Very Vulnerable to Fraud

White-collar crime is more brutal than violent crime. The actions of one or a few corrupt public officials and corrupt businessmen can affect the livelihoods of thousands, even millions of people. Fraudsters use a combination of persuasion and deceit to execute their crimes. Unfortunately, most people are unaware of how easy it is for fraudsters prey on their behavioral and cognitive vulnerabilities. Furthermore, the amount of prosecutions of white-collar criminals recommended by the FBI has steadily declined over the last 20 years. The government devotes far more resources to battling street crime than white-collar crime. The current framework involving, compliance, audits, and law enforcement does little to protect investors from fraud.

Every person is capable of doing white-collar crime. At the 22nd Annual Conference of the Association of Certified Fraud Examiners Conference in San Diego California in 2011, Joan Pastor, PhD, Clinical Psychologist and Fraud Expert said, “We’re all capable of committing fraud. Every single person in this room is capable of committing crimes.” For all of us, ethics is a matter of convenience depending on the situation and pressures involved. White-collar crime is an inevitable byproduct of the human condition. Seriously, can anyone truthfully claim that they live without sin and temptation?

Image from FBI

At best, people can prevent themselves from being victims of fraud. However, there is relatively little that our society can do to stop fraudsters from victimizing other naive and vulnerable people. If you are smart enough to avoid being victimized by a fraudster, they will simply find someone else with an exploitable weakness. Everybody has an exploitable weakness. The fraudster's job is to find the people who have an exploitable weakness that he/she can take advantage of.

Exploitable Weaknesses

White-Collar criminals use a combination of persuasion and deceit to achieve their objectives. Fraudsters prey on the psychological and cognitive vulnerabilities of their victims using the following techniques:

• White-collar criminals consider your humanity, needs, desires, ethics, morality, and good nature as weaknesses to be exploited in the execution of their crimes.
• White-collar criminals measure their effectiveness by the comfort level of their victims. They use a combination of charm and deceit to achieve their objectives. It’s far easier to get a potential victim to believe your lies, if they like you.
• White-collar criminals fabricate false integrity to gain the trust of their victims. Stature, generosity, and good deeds gain the respect of their potential victims and make it less likely that victims will question their behavior.

White-collar criminals will always have the initiative to commit their crimes. Your ethics, morality, and good nature limit your behavior, but fraudsters have no such constraints on their behavior. The ethical foundation of our society is based on trust and legal basis of our society is based on the presumption of innocence. The inclination to trust and the presumption of innocence gives the fraudster the initial benefit of any doubt while they are free to plan and execute their crimes. Therefore, trusting and decent law abiding human beings are easier prey for fraudsters.

It's common knowledge that effective internal controls, oversight, and checks-and-balances reduce the opportunity for fraud. However, people tend to ignore the fact that their trust, ethics, and good nature limit their behavior and create a fertile opportunity for white-collar criminals to seize the initiative and execute their crimes. Fraudsters are unfettered by society’s moral constraints on behavior.

Crime and Punishment

Many people mistakenly believe that strong punishment such as long prison sentences is a major deterrent to white-collar crime. Recently, many white collar criminals have received very stiff prison sentences, which I firmly support. At best, it holds those guilty of white-collar crime accountable and responsible for their actions. However, strong punishment does relatively little to prevent white-collar crime. Often, we watch prosecutors pound the podium in front of the cameras and claim that their latest successful case sends a strong message to fraudsters to stop doing crime. However, white-collar criminals don't listen to the rhetoric of prosecutors. No white-collar criminal discovers ethical behavior and stops doing crime because another criminal ends up in prison. While white-collar criminals take precautions against failure, they do not plan on ever ending up in prison.

Don't Trust. Just Verify

Trust is a hazard that will destroy your future livelihood. While you initially give a fraudster the benefit of the doubt, they will attempt to solidify their trustworthiness before you follow up to verify their claims. The fraudster hopes that you trust them enough to never verify their claims. However, if you later seek to verify their claims, your skepticism may be substantially diminished by your increased comfort level with them. In other words, you will accept the fraudster’s deceptive answers as factual, even if you have some doubts.

A common mistake made by victims of fraud is called "unexamined acceptance." Claims received from any source should not be taken for granted as being truthful and accurate without any critical analysis, investigation, and verification. Therefore, learn to exercise professional paranoia. Do not trust. Just verify

Apologies

Apologies are irrelevant. While contrition and forgiveness are admirable traits, apologies do not change the past or undo the harm caused by fraudsters. Apologies tend to make the victims feel a small measure of comfort and make fraudsters, as a minimum, appear remorseful. However, apologies should not be relied on to predict future behavior. People should be ultimately judged by their actions, not by their "well meaning" words or claimed "good" intentions.

Invisible White-Collar Criminals

According to the Association of Certified Fraud Examiners (ACFE) 2014 Report to the Nations on Occupational Fraud and Abuse, “Occupational frauds can be classified into three primary categories: asset misappropriations, corruption and financial statement fraud.” Less than 10% of fraud perpetrators had been previously charged with a crime or had criminal records. As the economic impact of an economic crime goes higher, it is less likely that the perpetrators involved have any previous criminal records. Did Bernie Madoff, Ken Lay (Enron), Bernie Ebbers (Worldcom), or Dennis Kozlowski (Tyco) have criminal records? The answer is no. Therefore, it is difficult for law enforcement and professionals to profile the white-collar criminals among us.

Most Fraud is Discovered from Tips

The ACFE 2014 report found that, “Tips are consistently and by far the most common detection method. Over 40% of all cases were detected by a tip — more than twice the rate of any other detection method.” Specifically, the study states that 42.3% of occupational frauds are initially detected from tips and 6.8% of such frauds are found by accident. Therefore, 49.1% of occupational frauds are found by tip or accident. Furthermore, the ACFE stated, “Management review and internal audit rank second and third, respectively, in frequency of detection, but they lag far behind tips.” Only 16.0% of frauds were detected by management review, 14.1% by internal audits, and 3% of frauds by external audits. Unfortunately, our society must primarily rely on the actions of whistleblowers to inform us about most frauds.

Who are the Whistleblowers?

While many whistleblowers are glamorized by the press, most of them are not motivated by altruism, but are motivated by revenge or personal gain. Every source has an agenda. To government investigators, it’s known as the XXX principle (and I am not talking about pornography).

1. Ex-lovers: Divorced spouses, former girlfriends and boyfriends.
2. Ex-business associates: Former customers and suppliers.
3. Ex-employees: Fired employees, laid off employees, and employees who quit working for the entity.

Whistleblowers can provide useful information. Most whistleblowers have an ax to grind and are looking to promote their particular personal agendas. They may have known about the crime during the execution of it, but did not report it until later. A whistleblower’s credibility should be judged on the basis of actionable verifiable information they provide, not what they say.

Do Audits Really Protect Investors?

Many investors blindly rely on the integrity of audits to protect them against fraud. Unfortunately, audits give investors a false sense of security. Traditional financial statement audits of public and private companies are not designed to find fraud. What accounting firms call an “audit” of financial reports is really a compliance review designed to find unintentional material errors in financial reports by examining a limited sample of transactions. In other words, traditional financial statement audits are designed to be spell-checkers and catch the accounting equivalent of innocent typos.

Despite the built-in limitations of audits, the major accounting firms do a poor job conforming to professional standards and rules for carrying them out. In 2012, the Public Company Accounting Oversight Board (PCAOB) inspected various audits conducted by the biggest four accounting firms and reported serious deficiencies in 25% to 49% of them:

• Ernst & Young: 51 audits inspected /deficiencies (49%)
• Pricewaterhouse Coopers: 52 audits inspected/21 deficiencies (40%)
• KPMG: 48 audits inspected/17 deficiencies (35%)
• Deloitte & Touche: 51 audits inspected/13 deficiencies (25%)

The latest inspection reports issued by the PCAOB for 2013 show that Pricewaterhouse Coopers had serious deficiencies in 19 of 57 audits inspected (33%) and Deloitte & Touche had serious deficiencies in 15 of 51 audits inspected (29%).

Dwindling Law Enforcement Efforts to Battle White-Collar Crime

From 1993 to 2013, the amount of prosecutions of white collar criminals recommended by the FBI has steadily declined, according to data obtained by Transactional Records Access Clearinghouse (TRAC) under the Freedom of Information Act from the Department of Justice. See the charts below provided by TRAC:

As a nation, we devote far more resources fighting blue-collar crime or street crime, than we do battling white-collar crime. For example, the NYC Police Department employs approximately 34,000 cops in uniform battling street crime. However, the FBI employs approximately 13,600 special agents, the IRS Criminal Investigative Division employs approximately 2,600 special agents, the SEC employs approximately 3,958 people, and the US Postal Inspectors Office employs approximately 1,500 postal inspectors. The NYC Police Department has more man power directly battling street crime than those four federal law enforcement agencies combined have fighting nationwide white-collar crime.

Written by:

Sam E. Antar

© Copyright by Sam E. Antar. All rights reserved.

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. I do not want or seek forgiveness for my vicious crimes from my victims. My past sins are unforgivable.

There is a saying, "It takes one to know one."Today, I advise federal and state law enforcement agencies about white-collar crime and trains 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 government entities, businesses, professional organizations, and colleges and universities. In addition, I perform forensic accounting services for law firms and other clients.

What Indicted SAC Capital Portfolio Manager Mathew Martoma Can Learn from Crazy Eddie

Back in March 1989, I faced an agonizing decision: Either cooperate with the F.B.I. and S.E.C. investigations of fraud at Crazy Eddie or spend a long time in prison behind bars. Likewise, former SAC Capital Advisors portfolio manager Mathew Martoma faces a similar important decision: Either cooperate with federal investigations of alleged illegal insider trading at SAC Capital or risk a long prison term. At the time I made my decision, I was married with three young children. Martoma is married with three young children too. We both had larger than life bosses who pressured us with unreasonable demands (me: my cousin Eddie Antar, Martoma: Steven A. Cohen).

Mathew Martoma and his wife after indictment

Facing an imminent indictment and a long prison term behind bars, I chose to cooperate with government investigators and turn in my cousin Eddie Antar and other relatives who ran our 18 year old criminal enterprise. Today, Mathew Martoma faces the same pressure I experienced back in 1989.

Apparently, federal investigators believe that Mathew Martoma is guilty of participating in an illegal insider trading scheme and can implicate his former boss, Steven Cohen as the driving force behind the alleged crime. According to the Wall Street Journal:

As federal agents pressed Mathew Martoma late last year to turn against his former boss, hedge-fund billionaire Steven A. Cohen, he fainted in the front yard of his Florida home.

"It was an upsetting experience," Charles Stillman, Mr. Martoma's lawyer, when asked about the incident. [Emphasis added.]

On December 21, 2012, Mathew Martoma was indicted for allegedly using information to illegally help SAC Capital profit from trades in certain publicly traded companies. According to the New York Times:

A federal grand jury in Manhattan indicted the former portfolio manager, Mathew Martoma, a month after the government arrested him on charges that he used inside tips about a clinical drug trial to help SAC earn profits and avoid losses. Prosecutors said the total benefit to SAC was $276 million.

SAC, based in Stamford, Conn., has been touched by several insider trading cases in recent years, but there is heightened attention surrounding the Martoma prosecution. For the first time, the government has tied questionable trades to Steven A. Cohen, the billionaire owner of SAC. [Emphasis added.]

Steven Cohen

My crimes were far worse than those alleged in the indictment against Martoma. I helped mastermind a scheme that defrauded investors and creditors of over $500 million and my crimes left over 3,000 people unemployed.

So far, Mathew Martoma maintains his innocence and has turned down cooperating with federal investigators. Martoma faces arraignment on January 3, 2013. His chances at beating the rap are slim. Over 90% of federal indictments result either in a trial conviction or guilty plea by the Defendant. Manhattan U.S. Attorney Preet Bharara has a perfect record tallying over seventy convictions with no acquittals in the massive ongoing federal insider trading probe.

If Mathew Martoma is in fact guilty as the indictment alleges and if he can implicate his former boss Steven Cohen, then time is running out for him to make a decision to cooperate with federal investigators. Potentially, if someone else comes forward and implicates Cohen before Martoma, he risks losing his best chance at avoiding a long prison term, because his value as a key witness would be diminished.

According to Fox Business, Mathew Martoma’s attorneys are charging over $1,000 per hour for legal fees and his former employer is footing the bill. That fact may provide a powerful incentive for Martoma not to cooperate with federal investigators. Likewise, for two years after being ousted from Crazy Eddie, my former boss Eddie Antar funded much of my legal fees as I was battling federal investigators. Finally, in 1989, I hired new attorneys who were not paid by my former employer and decided to cooperate with federal investigators.

My new lawyers, Anthony R. Mautone and Jonathan D. Warner advised me to come clean with the feds. I learned from them that quick timing and valuable information was the key to my future freedom. They told me that my duty to my wife and three children was more important than my loyalty to my cousin Eddie Antar and his immediate family.

Ultimately, the information that I provided federal investigators helped me avoid prison. I pleaded guilty to three felonies which carried a potential fifteen year prison sentence. Despite a much more lenient jail sentence recommended by former United States Attorney Michael Chertoff, Judge Nicholas H. Politan went even further and sentenced me to only six months of house arrest. In addition, Politan sentenced me to 1,200 hours of community service and I paid nominal fines and penalties totaling only $30,000. In my settlement with the victims of my crimes, I avoided all civil liability. I was able to avoid harsh punishment due to my extensive cooperation with federal investigators and lawyers representing victims of my crimes.

If the allegations in the indictment are true, Mathew Martoma’s only value to federal investigators is the potential information he can provide them about suspected illegal activities by his former boss Steven Cohen and others. Mathew Martoma has a lot of thinking to do and he’d better do it fast, because timing is running out. If he's convicted of the crimes alleged in his indictment, he faces up to twenty years in prison and I doubt that the feds will show him any mercy and give him any leniency.

Written by:

Sam E. Antar

Photo credits

NY Post: Mathew Martoma with his wife after indictment

Marketfolly: Steven Cohen

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 white-collar crime classes for various government entities, professional organizations, businesses, and colleges and universities. More recently, I've helped the AICPA Fraud Task Force develop better methods for detecting fraud. I do not want or seek forgiveness for my vicious crimes from my victims. My past sins are unforgivable.

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.

Why President Barack Obama Must Take Steps to Significantly Increase Law Enforcement Resources to Combat White-Collar Crime

Syndicated writer William K. Wolfrum wrote a must read provocative blog post on "Alan Colmes Presents Liberaland" website about possible future efforts by the Republicans to impeach President Barack Obama. He observes:

Republicans can not beat Obama at the ballot box. But you can be assured that they will do all they can so that his legacy is terribly tainted in scandal. There is just no way the GOP will allow Obama to serve out eight years and leave office with a strong record of liberal accomplishment that he can hand over to a Democratic successor. Simply put, for Republicans, Barack Obama must be destroyed and completely invalidated before his term or terms are over.

Republicans will attempt to impeach Barack Obama. The “why” of the matter is completely insignificant. They’ll find something and work overtime to make it appear to be the Greatest Scandal Ever. It’s just a matter of time. Provided, of course, that they have the numbers.

Wolfrum referred to my concerns that excessive government spending on an unprecedented scale will no doubt lead to unprecedented levels of white-collar crime. I believe that the Republicans will exploit that issue, in any way possible, to bring down the Obama Administration, barring more serious efforts by the Administration to deter, prevent, and prosecute white-collar criminals. Yes, that's politics.

In his blog post, Wolfrum wrote:

A while back, my friend Sam Antar – a former key player in the infamous and egregious “Crazy Eddie’s” fraud – told me that it was just a matter of time before Barack Obama faced impeachment charges.

“With all the stimulus money going out, the Republicans will eventually find some corruption charge they think will stick,” said Antar, now a corporate whistle-blower who tends to view things from a non-partisan prism. “It’s just a matter of time.”

In June 2009, I wrote an Open Letter to President Barack Obama warning him to be prepared for an unprecedented onslaught of white collar crime:

Within a couple of years, you can expect a massive crime wave on an unprecedented scale resulting from spending trillions of extra taxpayer dollars to stimulate the economy and bail out the financial sector in a relatively brief period of time. Not enough attention is being paid to effective internal controls to prevent such crimes. The FBI and other law enforcement agencies do not have enough resources to effectively investigate and prosecute such crimes. 

The Republicans will run against you on a simple platform, “The Democrats are responsible for white-collar crime, corruption, and waste on an unprecedented scale.” The Republicans will say that you should have cut taxes and simplified the tax system to stimulate the economy and reduce the incentive for criminals to commit fraud.

Among the sources that I cited in making my case was a warning by FBI Director Robert Mueller:

Given the trillions and trillions of dollars involved in the government's current moves to stem the economic crisis, "from the purchase of troubled assets to improvements in infrastructure, health care, energy and education -- even a small percentage of fraud would result in substantial taxpayer losses."

We simply do not have enough resources to effectively investigate and prosecute most white-collar crimes and the criminals know it. White-collar crime investigations are increasingly complex cases that require enormous specialized resources and take long periods of time to successfully prosecute them.

For example, the Securities and Exchange Commission only employs about 3,642 employees to police our capital markets. The Internal Revenue Service only employs about 2,725 Special Agents to conduct criminal investigations into such crimes as tax evasion and money laundering and that number has remained flat for ten years. The FBI employs 13,492 Special Agents and not all of them are assigned to investigating white collar crime. By contrast, the New York City employs approximately 34,500 police in uniform to combat crime in a city of 8 million people. Therefore, the NYC Police Department has more cops in uniform than the combined amount of people employed by the SEC, criminal investigators at the IRS, and special agents at the FBI (34,500 compared to 20,859).

We can debate endlessly about the need for more regulation. However, the more important issue is that, we as a nation, simply do not have enough resources to combat white-collar crime and the criminals know it and are exploiting it.

If President Obama does not take further serious steps to significantly increase law enforcement resources, the Republicans will exploit the white-collar crime issue at election time. As I said before, "That's politics." However, it's not a political issue. It's a national economic security issue. White-collar crime poses a grave threat to the integrity of our free market economic system and our future prosperity as a nation.

Written by:

Sam E. Antar

Recommended Reading:

June 1, 2010: CFO Magazine - Something Wicked This Way Comes by Maria Leone

Excerpt of interview:

Antar says. Criminals "don't go down without a fight, they don't fight fairly, and they are going to intimidate whistle-blowers — that's the nature of their game." To fight back, companies may need to raise the level of their own game, or say goodbye to losses that the ACFE says typically equal 5% of company revenue.

Disclosure:

I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped 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 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.

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. Hopefully, President Obama will help send many more criminals to join me in hell.

Why White Collar Criminals Do Not Fear Today's FBI

As the heartless cold blooded criminal CFO of Crazy Eddie, the Federal Bureau of Investigation was a respected adversary that filled my stomach with butterflies and caused me many sleepless nights as I feared their tenacity to successfully investigate my crimes. Unfortunately, the white collar criminals of today have much less to fear from the FBI. According to an article in the New York Times:

The Federal Bureau of Investigation is struggling to find enough agents and resources to investigate criminal wrongdoing tied to the country’s economic crisis, according to current and former bureau officials.
The bureau slashed its criminal investigative work force to expand its national security role after the Sept. 11 attacks, shifting more than 1,800 agents, or nearly one-third of all agents in criminal programs, to terrorism and intelligence duties. Current and former officials say the cutbacks have left the bureau seriously exposed in investigating areas like white-collar crime, which has taken on urgent importance in recent weeks because of the nation’s economic woes.

The pressure on the F.B.I. has recently increased with the disclosure of criminal investigations into some of the largest players in the financial collapse, including Fannie Mae and Freddie Mac. The F.B.I. is planning to double the number of agents working financial crimes by reassigning several hundred agents amid a mood of national alarm. But some people inside and out of the Justice Department wonder where the agents will come from and whether they will be enough.

Even if the FBI doubles the number of agents working financial crimes, it does not solve the main problem of effectively investigating white collar crime. White collar crime investigations are often complicated cases, take long periods of time, require enormous resources, and most importantly, experienced agents.

Top-notch, experienced FBI agents are leaving the Bureau for higher paying private industry jobs as soon as they qualify for retirement causing a brain drain within the FBI. As white collar crime is becoming increasingly complex, our government must revise employee retention policies to compete with the private sector.

The FBI lacks adequate legal, technological, and personnel resources to meet its responsibilities to investigate white collar crime. According to the New York Times article:

From 2001 to 2007, the F.B.I. sought an increase of more than 1,100 agents for criminal investigations apart from national security. Instead, it suffered a decrease of 132 agents, according to internal F.B.I. figures obtained by The New York Times. During these years, the bureau asked for an increase of $800 million, but received only $50 million more. In the 2007 budget cycle, the F.B.I. obtained money for a total of one new agent for criminal investigations.

Too often, complicated white collar crime investigations fall apart because the FBI lacks experienced agents with the patience, knowledge, and experience to put together a successful criminal investigation. According to the New York Times article:

In some instances, private investigative and accounting firms are now collecting evidence, taking witness statements and even testifying before grand juries, in effect preparing courtroom-ready prosecutions they can take to the F.B.I. or local authorities.

“Anytime you bring to the F.B.I. a case that is thoroughly investigated and reduce the amount of work for investigators, the likelihood is that they will take the case and present it for prosecution,” said Alton Sizemore, a former F.B.I. agent who is a fraud examiner for Forensic Strategic Solutions in Birmingham, Ala.

In other words, in order for the FBI to give serious consideration to many cases, they must be presented to them neatly gift wrapped on a silver platter.

The criminals of today are elated by an under-resourced and relatively inexperienced FBI. As a result, the cancer of white collar crime continues to destroy the integrity of our great capitalist economic system.

Written by:

Sam E. Antar (former Crazy Eddie CFO and a convicted felon)

Disclosure: My mug shot and finger prints are on file with the FBI.