Photo:Antre, Creative Commons, Flickr
My brother-in-law, Jeffrey Wells, is currently serving a 3-year prison term for wire fraud in a federal prison camp. Jeff invested money from a company he was working for into his dad's burgeoning venture capital find. He knowingly violated his company's investment policy. Jeff's father and his parter were involved in a scheme to raise funds. Their con ran for months, until they themselves got conned. You can read about the details here on the FBI's website. Read the Sacramento Business Journal's article here.
Because Jeff was a treasury analyst for SureWest Communications, Jeff's father influenced him to wire $25 million of Surewest's money into his father's venture capital fund. The idea was not to run away with it, but to borrow it to represent to other investors that the fund already had the confidence of many investors (this is a crime, by the way).
Even though Jeff was ignoring company policy, he had justified what he was doing in his mind because he was earning a bigger return for Surewest by investing with his father than could be made elsewhere. Read Jeff's own description of the crime here on his blog. The transferring of the money went unnoticed.
Things fell apart, however, when Jeff's father lost $2 million of SureWest's $25 million in a scam overseas. Jeff had convinced himself that what he was doing was "okay" because he felt he that he had never intended to defraud SureWest and was assured by his father that everything would work out. Jeff had pushed the envelope and taken risks, but Jeff believed that this was how the business world operated. He had even talked to his father about getting a job with him and his venture capital fund once things got off the ground. He now realizes that using money that didn't belong to him to further his own career is a criminal act; an act that began with what seemed like a small thing.
My sister is now raising their two young sons by herself. I go over to my sister's place to read to my nephews in the evening. Her once normal life has been turned completely upside down. I try to write to Jeff often to just let him know how life is going back at home. You can write him too. Mail is now the highlight of his day. If you have a financial question that you are wrestling with, like: "Should I claim that tax deduction even though I'm not quite sure if it qualifies?" He'd love to answer you. You can find his address here on his blog. He doesn't have access to a computer but he sends letters to his brother who posts them on the web for friends and family to read.
Now you may think to yourself, "I'd never do something so criminal as wire fraud.'' And you're probably right. You are probably not in a position to be able to wire $25 million of somebody else's money. However, we are given some sort of financial responsibility in our jobs. Everyday we face decisions and situations that test our character. You might not be in charge of much, but it is the small things that matter. You might manage the petty cash in your office or maybe you are thinking of acting on that tip that you overheard, which may or may not be insider information. Has your tax accountant explained to you a way to save money as long as you claim residency in a house you don't live in? (This could land you in prison too). What was your estimate of the stuff you dropped off at the Goodwill last week?
We all make financial decisions every day. There are always ways to cut corners and slip past detection. You might think you are not doing anything wrong because the standard practice is to bend the rules a bit. This is what got Jeff in prison. Something that seemed small to him at the time became very big. Just because everybody is doing it or has done it and gotten away with it doesn't make it right. Sometimes it takes backbone to do the right thing.
Before you can worry about making ethical investments, you need to make sure that your own conscience is clear. All financial decisions must be made with integrity, no matter how insignificant. Every decision needs to be made with complete and total honesty. We need to get in the habit of being completely upright in even the smallest of transactions.
If you get that feeling in the pit of your stomach that tells you that something is wrong, listen to it. Don't push that voice away and hope that everything will work out. Jeff has learned a valuable lesson. If you can't be trusted with a small thing, you cannot be trusted with more. Learn to be trustworthy in the smallest of things, even when nobody will notice. You never know when something small will mushroom out of control. If you were trustworthy when it was small, then you will becoming increasingly trustworthy when you are in charge of more.
Proverbs 10:9
The man of integrity walks securely,but he who takes crooked paths will be found out.
Dishonest money dwindles away, but he who gathers money little by little makes it grow.
Proverbs 10:2
Ill-gotten treasures are of no value, but righteousness delivers from death.
Proverbs 11:4
Wealth is worthless in the day of wrath, but righteousness delivers from death.
Proverbs 11:1
The Lord abhors dishonest scales, but accurate weights are his delight.
Proverbs 16:8
Better a little with righteousness, than much gain with injustice.