Tag: fraud

A CNN news report caught my eye. “Wells Fargo’s September from Hell”. The article lays out an overview–a sketch, really– of the scandal involving bogus bank accounts.

On Sept 8, it was announced that 5300 employees of Wells Fargo were fired for fraudulently opening accounts in their customers’ names. Subsequently,

Dozens of fuming former Wells Fargo workers reached out to CNNMoney to share horror stories of the pressure-cooker environment that led to this sordid behavior. Some said they had been fired for refusing to engage in these illegal practices, while others said they were fired for blowing the whistle.

You can read more at CNN.com.

Sept 21, the CEO of Wells Fargo, John Stumpf, was called to testify before Congress. Senator Elizabeth Warren’s tongue-lashing became the the buzz of social media. In addition to calling him “gutless” and telling him he should resign, she said this to Mr. Stumpf:

She said Stumpf’s personal holdings of Wells Fargo stock increased by more than $200 million while the fake accounts “scam” was going on, thanks in part to the bank’s success in selling tons of products to customers that they didn’t need.

“You squeezed your employees to the breaking point so they would cheat customers and you could drive up the value of your stock and put hundreds of millions of dollars in your own pocket,” Warren said. (Also from CNN.com).

In timing that couldn’t be more ironic, the executive Carrie Tolstedt, who oversaw those fired employees, will herself get to retire peacefully. Although she has been asked to forfeit severance pay and performance bonus, she will leave with shares and stock options worth $77 million. This, I am sure, is is a much more generous outcome than is experienced by any of the lowlier employees summarily dismissed from her “pressure cooker.”

To my mind, something deeper is going on. This company had a “month from Hell” in more than one sense. It could be said that all of their months are from hell. And they aren’t likely much different from any of the other giant banks–or, for that matter, from corporations in general. Wells Fargo and most of the rest of the corporate world can be seen as a manifestation or reflection of Hell on earth. They are bloated monsters sucking the lifeblood out of their workers while relentlessly pursuing “Mammon” unmoored from any of the ethical restraints that in past generations might have been provided by Christian teachings (or at least the public shame that could be leveled by gross violations of the same).

My point is not to wax nostalgic for the bankers of old–their yachts were just as surely fueled by greed and ruthlessness. But, by and large, a social compact existed that has since been eroded and killed by a banally evil corporate culture that now pervades all of our economy. Little concern remains for quality in craftsmanship of products, or honesty and integrity in delivering of services–These seem to be given no more than lip service. There is no reputation worth preserving if trashing it will eke out a slightly higher profit margin in the short run.

Smaller firms have been merged and swallowed into an oligarchy of megacorporations. The average worker has seen stagnating wages for much of the last decades, while executive pay has skyrocketed into the stratosphere. For the masses, this means ruin. The noble idea of “the career” has been supplanted by menial and dreadful jobs serving the whims of corporate empires. Surveys indicate that 70 percent of people dislike their jobs. Most of those not fortunate enough to be independently wealthy will have to spend the majority of waking life in the “pressure cooker”–subjected to perverse incentives and demeaning treatment. (The main alternative, I should hasten to add, is the equally demeaning manifestation of hell on earth known as “government bureaucracy”–a worthy topic in its own right).

Carmine Gallo in Forbes magazine opines that people would be happier at work if they were treated better and had a sense that what they are doing is meaningful: The trouble is nobody is inspired to get up Monday morning because their job offers free soda in the vending machine. People want to be inspired. They want to work toward a higher purpose and feel good about themselves and their leader. It requires better communication, not more perks.

We agree. It would be naive to expect a company to provide Heaven on earth, but there could be some steps taken in a better direction.

It should not shock or surprise that an occasion of great malfeasance on the part of one may be the impetus to heroism in another. I was recently informed of a situation that shows both the darkness and light that resides within us.

First, let us examine the darkness. More tha 117 patients were enrolled in clinical trials at Duke University, conducted by Dr. Anil Potti. His work had offered the hope of using cDNA microarrays to individualize cancer treatments. Sadly, it has turned out that much of the work by Dr. Potti was falsified. After investigations by the Institute of Medicine, Potti’s collaborator, Dr. Joseph Nevins was forced to take a closer look at the data. CBS News reported in a “60 Minutes” segment:

Fearing that reality, Joseph Nevins, whose own reputation was at stake, reviewed the original data which had justified the clinical trials for 112 patients. Dr. Nevins discovered that when the underlying data disproved Dr. Potti’s theory, the data were changed.

Nevins: “It became clear that there was no explanation other than there was a manipulation. A manipulation of the data, a manipulation of somebody’s credentials and a manipulation of a lot of people’s trust.”

The bright spot in this story is the courage of a young man who stood up for the truth. In 2008 a medical student named Bradford Perez, who was doing research in Potti’s lab exposed these misdeeds in a report that he presented to administrators at Duke University Medical School. He decided to take his name off all papers published by Potti, and repeat his research year at Duke in a different lab. His concerns apparently were initially covered up, and it took two additional years before the clinical trials were halted.

An outside reviewer had high praise for Perez:

“The medical student was very brave,” said Arthur Caplan, director of the Division of Medical Ethics at the NYU Langone Medical Center, who was asked to review the materials cited in this story. “That was quite an act of courage.

“I have a feeling his lowly status made him someone that they would be able to hope would just go away,” Caplan said. “There was a little bit of don’t-let-the-door-hit-you-on-the-way-out.

“Perez can look at himself in the mirror. Every day. But he paid the price.”

You can read more about Anil Potti and Bradford Petez at Cancer Letter.

Here is another entry for our disheartening survey of human malfeasance called “reflections of the fall”:

In 2013, The New York Post broke this story:

Some wealthy Manhattan moms have figured out a way to cut the long lines at Disney World — by hiring disabled people to pose as family members so they and their kids can jump to the front, The Post has learned.

The “black-market Disney guides” run $130 an hour, or $1,040 for an eight-hour day.
“My daughter waited one minute to get on ‘It’s a Small World’ — the other kids had to wait 2 1/2 hours,” crowed one mom, who hired a disabled guide through Dream Tours Florida.
“You can’t go to Disney without a tour concierge,’’ she sniffed. “This is how the 1 percent does Disney.”

Follow up stories included an NBC undercover investigation. In response, Disney shut down the program.

My wife noticed some suspiciously unruly service animals at her workplace last month, and wondered about this.  Looking into the situation further, it appears that there is a veritable epidemic of fraud.  Ordinary pet owners are passing off their mangy beasts as trained service dogs.

There is no shortage of news features on this increasingly common practice.  Here is one of those articles, from 2013:

CHICAGO (CBS) – Despicable. That’s the word used by advocates for the disabled to describe the newest trend – people disguising their dogs as service dogs to travel, shop, and even go to night clubs.

“People think what they’re doing is harmless but it’s not. It’s very harmful,” said Marcie Davis, founder of International Assistance Dog Awareness Week.

As a paraplegic, Davis uses a real service dog, one that’s been trained and certified over hundreds of hours.

Read it all: http://chicago.cbslocal.com/2013/08/21/despicable-epidemic-people-using-fake-service-dogs/