How do most white-collar defendants get caught up in the federal criminal justice system? Most people who commit these types of crimes are not bad people but many of them have made terrible decisions. One bad decision can lead to another and ultimately to a decision that can land you in federal prison.
In my situation, the poor decisions started early in my career. I began my career as a stockbroker in the late 80s. I worked for several large investment firms such as Dean Witter ( prior to it becoming Morgan Stanley) and Lehman Brothers which were both great firms. While at these firms the one thing that I lacked was proper mentoring. Everything was sales with no discussion about servicing the client and protecting the client’s assets. Many brokers as well as managers would often say clients never make money, and the focus should be on growing the commissions for broker and firm. For me, this was not how I was raised by my family. I grew up in a hard-working middle-class Irish family where there was never any talk of taking anything that was not mine or cheating people in any way. However, watching my coworkers apply high-pressure sales techniques and be rewarded with nice suits, and cars over time became very appealing to me. Over time my business conduct and substance abuse issues made it difficult for me to succeed in the investment industry. In the early 90s, I landed at a firm called GruntaL and Company. It was a New York Stock Exchange Member firm and provided an opportunity for me to build a solid career. Between my need to succeed at any cost and my substance abuse issues, I was not able to perform at the level I had hoped. This is where I made my first bad decision. On one day I needed to generate revenue so I executed a trade for a client without talking with him and unauthorized trade. As I executed the trade without getting caught I was on my way to do many more. After one such trade, my manager called me in the office and told me I was being terminated for unauthorized trading. In his words “ once someone does an unauthorized trade, they will never stop” and he was right. The next 7 years had me bounce from firm to firm doing the same thing over and over until I was barred from working as a securities broker in 2005. I was devastated as brokering was all I had ever done since leaving college. I spent the next few years working in and around the stock market in roles that did not require a license. First raising capital for private companies and later as a stock promoter. While raising capital I again made several bad decisions and made them based on self. I began raising money for a homeland security company that paid me handsomely to introduce clients to invest in their company. In total, I raised several million dollars made several hundred thousand however all of my clients lost their money. Again another poor decision based on greed, the cost of this decision was the loss of many long-time wealthy clients many of who had become friends. My next business was working as a penny stock promoter first operating several small-cap newsletters and later doing my own listing projects by taking companies public through a reverse merger. As I got involved in this business like my others I had mentors. These were people advising me on how to take companies public, what attorneys to use, and what would be the best stock promotion program among other things. One mentor, I remember well. Prior to my first listing advised me how to evade rule 144 and referred to it as standard industry practice. This advice seemed harmless to someone who did not understand how these deals were done and had no experience. So I took his advice, and I did what he suggested over and over again. On every deal I did I found a way to control all of the free trading stock in the companies by using nominees and shell companies. Even though I was doing what everybody else in the industry was doing, I was breaking Federal Securities laws. I was hiding my ownership to evade rule 144. At first, this did not concern me. Later as I saw people getting charged by the SEC for doing this I became a little more concerned. Then there was the day that I came to work and 2 FBI agents were at my office waiting to speak with me, and I knew what type of trouble I was in. The agent proceeded to tell me that I was going to be charged and I was facing 100 months in prison. That was the cost of that decision, potentially my freedom. The entire process lasted over 5 years. In December 2014 I plead guilty. After my guilty plea, I went downstairs to the US Marshalls Office to be processed. As I was being fingerprinted and pictures I looked at the tv monitor and about 5 feet from where I was standing were the Marathon Bomber in a holding cell. He was in Boston to make his initial appearance. I remember looking at the monitor and asking myself, how did I get here? It all stemmed from a series of bad decisions and the more I made these bad decisions, the consequences got worse.
My message is in business find a good mentor whos doing business the right way. Take a long-term approach to your business, If you make bad decisions you could lose your career or worse your freedom.
