THE KESSLER REPORT Continued
A Publication of Michael G. Kessler and Associates, Ltd.
Archive Home
Behind the Numbers®
Edition
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Volume 1
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Number 2
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...T E C H T A L K
(continued from page 3)
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In a recent case, Easley, McCaleb & Associates, Inc. v. Brian A. Perry, No. E-26663 (Ga. Super. CT. July 1994), the court deemed that deleted but recoverable files were admissible.
Follow the trail of one company's
hypothetical E-mail message:
A rogue partner fires off a flaming
E-mail message to the company's administrator describing a staff
member as "that old F-rt whose time has definitely come." In this
instance, the E-mail system was configured to store copies of outgoing
messages on the sender's hard drive as well as the file server. In
addition, when a message was read by the addressee, it was
automatically save to the addressee's machine until purposely
deleted. The message, residing on the server, was swept into a monthly
backup, where it was stored on a backup tape for a year.
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Luckily, the sender did not make use of the E-mail's broadcast
feature, but even so, the disastrous message was now in at least four
locations. One of the file copies was found, produced during discovery
and presented to a jury in an age discrimination action. The above
case illustrates the pitfalls of E-mail. It is just as likely that a
key piece of evidence could have been located within a long
"destroyed" memo, or perhaps in a note to the file that was backed up
and preserved on tape.
What about controlling you own risk of
"electronic exposure"? Everyone has compelling reasons to use
computers carefully. You may want to start the process by broadcasting
this piece over your company's E-mail system.
Warning: Don't write anything here that
you wouldn't want a jury to read.
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...Raid
(continued from page 1)
The illegal operation adversely affected
more than twenty Fortune 100 corporations and also involved the
counterfeiting of the trademark of a number of these corporations, as
well as the changing of lot codes and expiration dates on a number of
different food products.
Kessler & Associates has been
instrumental in identifying hundreds of similar cases of diversion,
thereby aiding corporations in curtailing the operations of the
perpetrators. In the words of Michael Kessler, "The time to act is
now--but the time you actually uncover the problem, it's too late."
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White Collar Crime:
Who's Doing It
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1. Crimes by persons operating on an individual, ad hoc basis including:
- Purchase by credit with no intention to pay or purchase by mail in another's name
- Individual Income Tax violations
- Credit card fraud
- Bankruptcy fraud
- Social Security, Unemployment Insurance or Welfare fraud
- Insurance Fraud
2. Crimes by persons in the course of their occupations. These include:
- Commercial bribery and kickbacks
- Bank violations by bank officers, employees and directors
- Embezzlement of self-dealing
- Securities fraud, i.e. insider trading, using firm funds for personal gains
- Petty larceny and expense account frauds
- Frauds by computer, causing unauthorized payout
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3. Crimes incidental to and in furtherance of business operations, but not the central purpose:
- Tax violations
- Antitrust violations
- Food and drug violations
- Submission or publication of false financial statements to obtain credit
- Check "kiting" to obtain operating capital on short-term financing
- Securities Act violations, i.e. sale of non-registered statements, manipulation of market
- Deceptive advertising
4. White-collar crime as a business, or as the central activity:
- Medical or health frauds
- Securities fraud and commodities fraud
- Chain referral schemes
- Home improvement schemes
- Mechandise swindles (i.e, gun and coin swindles, general merchandise swindles, and buying or pyramid schemes)
- Personal improvement schemes (i.e., correspondence schools, modeling schools)
- Insurance fraud
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Think fast: Who is more likely to get
away with money from your business? An A-K-packing thug who bursts in
demanding cash or the middle-age, married white male who manages your
Accounts Receivable department?
If you've been paying attention
throughout the rest of this newsletter, you'll know it's the
manager. In fact, a U.S. Secret Service study suggests you are twenty
times more likely to be the victim of white-collar crime than to be
held up. White-collar crime is increasing dramatically, due to its
relative ease to commit and its difficulty to prove. Tolerance is a
factor, too. Even when white-collar criminals are prosecuted, they are
more likely to be treated more leniently due to the non-violent nature
of their crimes.
White-collar crimes can cover many
different types of crime committed under many circumstances. On the
right is a list of the most common, as a reminder to keep your guard
up on all fronts.
While the methods and motivation vary,
white-collar crime boils down to one basic tenet: the taking of money
that is not rightfully owned. Remember, white collar crimes and the
people who commit them come in all shapes and sizes. Defend your
corporation from them all.
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Copyright © Michael G. Kessler & Associates, Ltd. 1997. All rights
reserved.
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