Dexter Van Dango is a pen name for a real person who is a senior executive with more than 25 years of experience in the equipment leasing industry. A self-described portly, middle-aged, graying, balding leasing guy in the twilight of a mediocre career, Van Dango will provide occasional insight from the front lines via Monitor.
Monitor mystery writer Dexter Van Dango discusses the plague of fraud and greed hitting the industry. Can we expect more “hucksters and suckers” in equipment finance’s future?
Nearly 2,500 years ago Greek poet Sophocles quipped that he would “rather fail with honor than succeed by fraud.” It seems that some people disagree with Sophocles — they fail without honor while trying to cheat the system. To the chagrin of many, fraud still prevails in our industry today.
Years ago I listened to former Notre Dame head football coach Lou Holtz frequently give a rousing motivational speech based on a simple premise: Do what’s right, don’t do what’s wrong, and know the difference. Easier said than done! If recent headlines are any indication, some folks are simply unable to discern right from wrong.
Have we evolved as an industry? Are we better off today than we were more than 30 years ago when O.P.M. perpetrated one of the industry’s first large scale computer leasing frauds? Many Monitor readers weren’t even born when this one went down. O.P.M. stood for Other People’s Money. You can still read about it in the New York Times.
Many readers will remember Aloha Leasing as part of Bennett Funding Group – the company that carried out one of the largest Ponzi schemes in history, often writing leases for equipment that didn’t exist or was already secured by another lender. But did we learn from it? Heck no. Just last month the headline read Late North Bay Businessman Suspected of Multimillion-Dollar Fraud. Another Ponzi scheme. And who could forget Norvergence – does that one ring a bell? Phone systems that were too good to be true … literally.
As lenders and lessors, we are not alone in this befuddled role. Think of all the Hollywood types and Wall Street-ers who were swooned over by Bernard Madoff. Think back to Ken Lay at Enron and Bernard Ebbers at Worldcom – who claimed, “No one will find me to have knowingly committed fraud.” How’s that working out for you, Bernie?
A line that is often attributed to P.T. Barnum – “A sucker is born every minute” – is what allows fraudsters to perpetuate their game. And more frequently than not greed and envy is what drives the foolish behavior. Investors who poured money into any of the cited fraudulent schemes were lured by the promise of “above average returns.” Greed, they wanted more. The leasing company payroll clerk who added a few extra names to the employee roster while redirecting their wages into accounts he controlled, wasn’t discovered until the company was sold and the buyer wanted to account for all employees. Envy, he wanted what others had.
One would think that in this day and age of compliance, regulation and advanced technology for monitoring and tracking business activities, our industry would have found a solution to avoid the embarrassment of yet another fraud. But until human nature is void of at least two of the famous seven deadly sins, we are likely to wake up to more headlines describing the antics of another huckster and a sucker.
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