Dear Mr. Lay........Sincerely Aunt Millie and the Other Victims

Dear Mr. Lay (Ken),

Sincerely enjoy this attempt (your new website) to claim your innocence in inflicting financial harm against your investors, your employees and the millions of energy consumers Enron ripped off. Now you say that you just didn't know what was really going on. However the bottom line is that while Enron burned you privately sold off 300 million in over-valued stock; while encouraging others (even your employees) to keep buying.

You certainly knew enough to ensure your personal finances before the crash.

The government, who represents the people is charging you with eleven counts of 11 counts of securities fraud, wire fraud, and making false and misleading statements. If you are convicted, you face 175 years in prison. Don't be too dismayed, I'm sure with all the accomplishments listed on your web page that "time off for good behavior" isn't out of the question.

Then there are the people of California and our Aunt Millie, who your company suggested use candles when she could no longer afford the electric bills Enron was raising at record rates via deceptive actions. I'm sure if our Aunt Millie had 300 million in personal assets, she wouldn't have needed candles as was "jokingly" suggested in one of your board rooms.

Perhaps, I shouldn't mention Aunt Millie, it seems you and your defense team have ensured most of this evidence can't be heard at your trial, Enron Jury Won't Hear Tapes of Co. Traders. I'm sure this will help your case, but some of it will still filter in, such as testimony that your former counsel, Richard Sanders briefed you on schemes like making uncongested transmission lines seem congested so Enron could profit by being paid for problems that didn't exist.

I did mention Aunt Millie, because Aunt Millie represents the human suffering Enron caused for millions of people and this is what on a personal level you should be ashamed of.

Let's face it Ken (can I call you that now), NO ONE, but you and your "friends" have profited from this. The fact that many of the victims were poor and ordinary people makes Enron's actions "shameful" considering how rich you and the "fellas" already were. Even if the civil portion of all of this is settled, it is unlikely any of the individual victims will receive a penny.

In your own words, you state:

"As CEO of the company, I accept responsibility for Enron's collapse. ... However, that does not mean I knew everything that happened at Enron, and I firmly reject the notion that I engaged in any wrongful or criminal activity."

In the words of Aunt Millie and the people:

"Pleeease!"

Here are the formal charges against Ken:

U.S. v. Kenneth L. Lay

Here is Ken's site, protesting his innocence:

Ken Lay Information

Maybe some ads for candles would be a nice touch on your site.

Thanks to the good people of Wikipedia for the links used in this post.

Accounting Firm Estimates Fraud Losses at 66 Billion Yearly

Goldstein Lewin and Company (a Florida accounting firm) released an interesting study putting fraud losses in the U.S. at $66 billion yearly. In their study, they state that reported fraud has risen 22 percent and 6 percent of annual revenues are lost to fraud.

The study also states that most of the people caught committing fraud have no previous record of doing so and that companies rarely recover their losses.

The Sarbanes-Oxley act (Section 404) requires public companies to implement controls to prevent, identify and detect fraud. As a result of this, most publicly held companies have been tightening their controls and the news seems to awash with stories of corporate scandals.

Here is the full presentation from Goldstein and Lewin:

http://www.goldsteinlewin.com/fraudpresentation.pdf

$66 billion (if accurate) is a tremendous amount of money. Recent stories in the media of senior executives being caught committing fraud would seem to validate this. Although, these are the stories that make headlines, in reality fraud can and does occur at all levels of the food chain.

In today's business environment, a prudent company needs to consider fraud prevention, detection and apprehension (if necessary) as a element of their continued growth and profitability.

Protect Yourself by Being Careful Who Protects Your Computer

We've all seen those nasty pop-ups offering to test our systems for spyware. In many cases all you got from these was a lot of spy and adware loaded on your system. Websense is reporting that they are detecting crimeware being downloaded via these ploys, either directly by clicking on the pop-up, or on the site it directs you to.

Websense has also detected the use of Zero Day vulnerabilities used in these attempts.

Here is the alert from Websense:

"Throughout December, Websense Security Labs™ reported a number of cases where browser and Operating System vulnerabilities were being used to install Potentially Unwanted Software onto end-users machines without user-intervention. In several cases, dozens of pieces of code were installed, and often report false information in order to entice the end-user to clean their machine from spyware.

We are now seeing some of those same entities using their exploit code to install more reprehensible crimeware, such as key loggers and phishing traffic redirectors. This code is designed to steal information in addition to the installation of potentially unwanted software.

Users are typically infected through an IFRAME, loaded silently from a compromised website or an advertisement network pop-up. The exploit code loaded through these IFRAME tags attempts to use several dozen vulnerabilities, including the two recent zero-day vulnerabilities: MS05-054 and MS06-001. Users who are patched against these vulnerabilities are displayed an ActiveX prompt to install the exploit code."

For the full story, please read: When Greyhats turn to Blackhats.

Here is a story from Brian Krebs that is relevant to this issue: Fake Anti-Spyware Makers Settle Fraud Charges.

As always, protecting your computer and your identity is important. It is highly recommended that one carefully investigates "unknown" providers of computer security before using them.

Write a Bad Check at Walmart and the DA will Getcha

Most District Attorney's Offices in the United States have a bad check program. The way it works is a business (or individual) turns over their bad paper to a program established by them and they collect the item, plus fees.

The difference between them and a collection agency is that if you don't pay, they will prosecute you.

Apparently Walmart, who had been using a lot of these DA programs -- wanted to consolidate their collection efforts -- and when they did; many DA's offices were not very happy. Apparently (for some of them) this is a significant source of revenue.

In the United States, it's necessary to prove "intent" to charge someone with a crime. That's (unless) you utilize the DA's check collection service.

Many larger corporations seem to prefer using collection agencies versus the local programs. Large corporations do business over wide geographic areas and it can be cumbersome to deal with check issues, County by County.

Kevin Murphy of the Kansas City Star did an article on this:

“Wal-Mart is the second-largest client that we serve in the prosecutor’s office.”Mike Sanders, Jackson County prosecutor

"When retail giant Wal-Mart decided recently to refer all deadbeat check writers to a collection agency, county prosecutors in Missouri and some other states winced.

Bad checks, it seems, are good business for some prosecutors and district attorneys, who collect fees from the check writers. Fees usually exceed the collection costs, meaning money is left over for all sorts of prosecution expenses.

Wal-Mart, the nation’s top retailer, is a top producer of bad-check cases. Its stores represent one-third to one-half of fees collected in some Missouri counties, and each case can bring fees of at least $25 to $75 to county tills. Such cases are less lucrative in Kansas because state law limits fees to $10 per check.

“Wal-Mart is the second-largest client that we serve in the prosecutor’s office,” said Mike Sanders, Jackson County prosecutor. The county collected about $43,481 in fees from Wal-Mart check writers in the first 11 months of 2005, Sanders said.

Wal-Mart’s decision not to refer cases to prosecutors has created so much opposition nationally that the company is re-evaluating its November decision to go entirely with a collection agency.
“In some states, prosecutors have come to rely on that type of income to fund a significant portion of their budgets,” said Paul Logli, an Illinois prosecutor who is president of the National District Attorneys Association. The money also funds educational programs to reduce check fraud, he said.

For the full story please read: Retailer will review policy.

In the past, I've dealt with some of these local programs and they are a great service for small businesses and small companies. Of course, they are only as efficient as the information they are given to collect. Unfortunately, with 9 million victims of identity theft a year, checks are often cashed with assumed identities and counterfeit identification.

Businesses that take checks are well advised to protect their assets by knowing who they are accepting checks from and training their employees to detect check fraud. Collection and or prosecution efforts are only effective if you can identify the person who passed the item.

The Federal Reserve System has an excellent training document for anyone unfamiliar with how to identify bad checks.

Walmart has been in the news lately regarding a lot of fraud issues. Here is a previous post, I wrote on that matter:

Walmart's Many Woes With Fraud Issues