Tag Archives: advice

If Lost… Then What?

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At the end of May, I was on my way to an event, when a flash of pink on the sidewalk caught my attention. I stopped and realized that I was looking at a small square of leather. I bent down, picked it up and turned it over in my hands. It was a wallet with a MetroCard, some credit and debit cards and a driver’s license in it. I pulled out the license, looked it over, and walked over to the restaurant that was a few feet away from where I had just found the wallet. I must have made a few people nervous, staring at them and then down at the license, to see if anyone there resembled the photo. No luck. I then pulled out my phone and tried a few quick searches, online, to see if I could figure out how to contact this woman. Her name was more common than I imagined; several options came up and none appeared to be her. Yes, her license had an address on it but, the license had been issued several years earlier and people in New York City can move around quite a bit, in search of amenities such as a view, an elevator or affordable rent. As I was running late, I decided to go to my event and put my search off until later. On my way, I spotted a parked police car. I got excited, thinking that I may be able to hand over the wallet, but the excitement faded when I got close to the car and found that there was no one sitting in it.

When I got home and had more time to do so, I hunted down the woman whose wallet I had found and delivered it to her. Even if she had cancelled her cards, I am sure she was happy to get her stuff back – who knows maybe her MetroCard still had 29 days of use left on it. That experience reminded me of a time, years ago, when someone stole my handbag at the airport. I was livid that someone had invaded my space and even stood yelling, in the terminal, for the thief to just take my cash and give me back my stuff. Suffice to say, that did not happen. I did, fortunately, have a kind gentleman give me money to get the train back home. However, a few weeks later, my phone rang and it was the airport, calling to tell me that my bag had been found. They had been able to contact me because I happened to have a dry-cleaning slip in my wallet, and my phone number was on it. I was lucky that I had that slip in my bag but these two events really got me thinking about recovery plans, not just in business, in other aspects of our lives.

With a wallet, for instance, you can keep a business card in the wallet, or put a small card in your wallet with an email address and/or phone number so that, should you be unlucky enough to lose the wallet and a kind stranger picks it up, they can contact you and figure out how to get it back to you. It is an easy thing to do and could be hugely useful. It doesn’t even have to be your usual email address, if you have fears about your inbox being inundated by unwanted email, you can create an email address that you keep for moments such as this.

We never think that we will either lose our stuff or have it stolen from us but it can happen to any of us. It can be personal or it can be a business loss, such as a system crash, or theft and, in all cases, having a recovery plan will go a long way to make recovery less stressful and less expensive. If, at this very moment, you lost everything on your computer, what would you do? Does the thought give you heart palpitations because you would lose very important data, with no way of getting it back? Would you have to shell out a lot of money and spend valuable time working to try to recover everything? Would you wonder whether or not your business could survive such a loss? If this thought is a scary one to you, you should be thinking about sitting down with trusted professionals, to create and put a comprehensive protection and recovery plan in place. You should review various scenarios, even if you think it wouldn’t happen to you. Things to consider when doing this:

  • Are you backing up your data on a regular basis? Automating this process is a great way to make sure that it happens – you don’t want it to all depend on your remembering to do it.
  • Where are you keeping your backups? Do you keep a backup offsite and unconnected to your current system? You don’t want your backup corrupted, should your system go down.
  • Are you checking the integrity of your backups? It isn’t helpful to think you have been creating backups and find out, when you need the backup, that the process was not occurring.
  • Now that you have backups, do you have a recovery plan? Do you know what you are going to do should things go awry? Does your staff know? Do you have the plan in writing and in a space where it can be easily accessed? Have you trained your staff in this recovery process?

There are people who are well-trained in helping you create a backup and recovery plan and that can start with your CPA. You want someone who has experience and knowledge regarding best practices that are practical, useful and effective.

We are humans who work with technology that we have built and we must, therefore acknowledge that we are not infallible and we must therefore create, review and update our contingency plans. And that plan can never just be relying on the kindness of strangers.

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Cheating Mysteries

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When I first started running long distance, my goal was to run the New York Marathon. After I completed the Chicago Marathon, things changed a little. Of course I still held my breath every year, hoping to make it into the New York Marathon. But I also had another distant dream – qualifying for the Boston Marathon. It was a distant dream because I would need to run a qualifying time in order to get into Boston and my pace at that time was nowhere near one that would get me into Boston. Over the last few years, my pace has improved and qualifying for Boston has become a more attainable dream. Over the years, I have also come to know more runners and have found that many of us aspire to qualify. I know I am always in awe of a person who has qualified for Boston – it is no mean feat.

With the line of work that I am in, I should not have been surprised, but I was, when I read a recent Runner’s World piece about people who cheat to get into the Boston Marathon. I wanted to run the New York Marathon because I was inspired by the runners who ran past my block, the runners who would touch all five boroughs that make up the city that I call home. I enjoy running races in cities and towns that I have never been to, as I find it a great way to visit and discover new places. When I think about Boston, I don’t necessarily think about running the race itself. The power of Boston, for me and for many that I speak with is in what it takes to qualify. That is the challenge. So, when I read about people who cheated by getting someone else to run a qualifying time in their place, or by cutting a course, I was baffled. Where is the joy in telling someone that you achieved something that you didn’t or that you had someone achieve on your behalf? When I speak with fellow runners, I tend to speak with like-minded people who are just as baffled as I am.

This article reminded me that just because one cannot understand the motivations of a cheater, it does not mean that the cheating will not happen. The fact that many of us cannot understand this motivation is exactly what those that cheat bank on. If no one can imagine how or why someone would fake qualifying for the Boston Marathon, the chances are high that a person will get away with faking in order to qualify for the Boston Marathon. This is something that we all should be mindful of, beyond the realms of the Boston Marathon. Way too often, a business owner or manager will forgo instituting checks and balances in their company, because that business owner can’t imagine that anyone that works for them could be the kind of person that would defraud them.

It is important to take steps to keep from being blindsided by your world view. Precisely because you can’t imagine how a person could behave in a fraudulent manner is why you should seek out the services of a forensic accountant, whose job it is to both imagine how a person could defraud you and how to prevent and detect such actions. We all hope that people will be honest, but it is a sad truth that for various reasons, people will cheat. In the context of the Boston Marathon, perhaps some people feel that they are so close to a qualifying time that a little cheat is not such a bad thing. Maybe some people hunger for praise, even if they have not earned it. Maybe some people just don’t think it is a big deal to cheat in order to get into Boston and see it as a victimless crime. In the context of a business, some people may face personal pressures that they feel push them to fraud. Some people may feel that they are not sufficiently appreciated by their employer and may, therefore, feel justified in taking from that employer. No one is immune from the pressures or motivations that lead to fraud, but what we can do is take steps to make it as difficult as possible to be defrauded.

 

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The Best! The Worst!

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Today is marathon Sunday in New York City and, for years now, I have lived less than a block from the marathon route. It is one of the most exciting days of the year for me and I love walking down to the end of my block to join the over one million spectators who line the 26.2-mile route to cheer on the runners. All too often, New Yorkers are thought of as people who just don’t care about others. Per the stereotype, it’s just keep out of our way, don’t look us in the eye and don’t do anything that will slow us down and we won’t have any problems. Marathon day is a day when I am reminded that the city is a city full of people who do things like come out to cheer and high-five strangers as those strangers test their bodies and spirits. I love it.

There are moments, such as the marathon, that bring out the best in people. Disasters, as sad as they may be, also bring out the best in people. People come out and give time, money and other resources to help those in need. Tragically, disasters also tend to bring out the worst in some people. Some among us see disasters as a great opportunity to take advantage of others, for personal gain. Some of the fraudsters are blatant in their unscrupulous ways because they are targeting the desperate among us. A current example is the migrant crisis in Europe, where refugees, seeking to escape dangers at home, will give up all their resources in the hopes of reaching a safer place. Instead, some hand over money to greedy criminals who then lead them into more danger and, sometimes, even death.

Other fraudsters are more slick in their strategies to profit from the suffering of others. In recent months, natural disasters such as fires and tropical storms, have left many in the United States needing assistance. Just in October, while communities in South Carolina were struggling to recover from flooding damage, warnings were being sent out because of an influx of fake charities. These counterfeit charities, preying on the generosity of those wishing to do something to help the displaced and impacted, were taking people’s money and doing nothing to help those in need. Just a couple of days ago in New York, a company agreed to pay a settlement of $700,000 for pretending to collect secondhand clothing to help charities. Instead, this company sold the clothing, paid almost nothing to the charities and made profits of over $10 million dollars, it is estimated.

Because, even in situations where we should be helping others, there are those who are looking to help themselves at the cost of those around them, it is important to be vigilant.

  • It was Halloween yesterday and parents were checking to make sure that the treats that their kids collected were safe for consumption. Yes, people may appear to be doing good things, but it is only smart to make sure that everything is above-board.
  • Even though it may seem like a drag, check up on who you are giving your money or time to.
  • The name may sound familiar, but make sure it really is who you think it is.
  • If you feel uncomfortable about something, it is okay to say no. There are many opportunities to give back to those in need and you will find the opportunity where you are sure that what you are doing is benefitting those who need it.
  • Don’t give your personal information to anyone.
  • If you believe that you have been scammed, contact your local authorities and report it.

Giving is a vital part of what makes us communities. Just make sure that you are giving to the right people and not the unscrupulous scammers around. You know, like that obnoxious person in the neighborhood who decides that they just have to cross the street as the runners are passing by. Don’t give that guy the time of day.

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While We Are Making Plans

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Because I live in the Northeastern part of the United States, I have become one of those people who lives for the brief summer months. There are only a few brief months of warmth and sunshine (and, often, humidity) in which to have a fun life. There are outdoor shows, there is the beach, there are picnics and that’s just a small sliver of all that needs to be done before the cold and darkness return. In my case, I had also signed up for a half marathon, to be run in the middle of October. Summer was my chance to keep on running and build my endurance and distance. When I run, I run on streets and have to deal with cracks in the sidewalk, people getting in my way and traffic. I am always on the lookout to stay safe and not hurt myself. So, in addition to all the stretching and foam rolling (never enough) that I do in order to prevent injury, on top of all of the careful calibration of distance that I do so that I don’t hurt myself by doing too much too soon, I am also keeping a watchful eye on every step that I take in order to keep myself safe and sound during my run.

Well, on a bright and sunny Sunday morning, at the beginning of August, I stepped out of my apartment building and into the parking lot, armed with a whole lot of recycling to put out. The next thing I knew, I had tripped over something (turned out to be a concrete block) and I was stumbling. The recycling flew out of my hands and the first thought that I had was, “this better not mess with my running”. In an attempt to break my fall, I jammed my leg into the ground and a sharp pain shot up my leg. I crumpled, in my mind, elegantly to the ground. It turns out that for all my measures to protect my body, all it took was taking out the trash in order to fracture my knee. I ended up with my knee in a brace and using a cane (that I still have). Throw in a surgery that I had in September and it turns out that this summer was not the summer I had imagined at all. An acquaintance said to me that life is what happens while we are making plans.

Most people business owners, similarly, spend a lot of time and invest a lot into protecting their businesses from most expected challenges. Depending on the size and complexity of the business, this will range from control systems to detect and prevent fraud and waste, to various reports that business owners and management use to monitor how the business is doing. The question that stands though is, what are business owners and management doing to deal with the unexpected or the events that they hope will never happen? Does the business have a disaster recovery plan? Has the business taken steps to encourage tips that will help uncover weaknesses in control systems and catch fraud and waste? Does the business know what it will do when fraud and waste are uncovered? Yes we make plans and take precautions, but are we ready to deal with what happens when the unexpected happens? Are we ready for, you know, life?

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Not Again…

I don’t know what life was like for you, growing up, but my youth was full of lectures. I never just got into trouble. I got into trouble AND I got a lecture to go along with it. We never just went on vacation; we went on vacation, had to write an essay about our experiences AND we got a lecture about how both things were important. We didn’t just discuss our report cards, good or bad; we discussed our report cards AND got a lecture about the long-term benefits of each class we were taking. The lectures often came with true-life stories about one or both of my parents, someone they knew or someone who lived in their “day”. I am not saying that I was lectured a lot, but I did hear some stories more than once. On the occasions that I tried to interrupt to say that I had heard the story, I was told either that there was a new lesson to be learned, or asked why, if I knew the story and the wisdom it imparted, I continued to make the same mistakes.

Well, at last, I get it. Because the other day, I came across a case that includes so many lessons on fraud that, if I were teaching a semester on fraud, I could use it as an example in just about every lesson. This is the case of Christopher Myles, a former bookkeeper in New York City. He worked at Central Park Realty Holding Corp., and some of its affiliates, and reported to the President of the company. Tragically, in May 2010, the President, suffered a stroke and ended up in “a comatose-like state until her death in February 2012”.

With the president incapacitated, no one stepped in to VERIFY Myles’ work. By the time September 2011 rolled around, Christopher was aware that he could pretty much do whatever he wanted without anyone really questioning what was going on. He knew that he now had the OPPORTUNITY to defraud his employer and he took advantage of this opportunity. True to the trend, Christopher Myles started his fraud on a small scale, using the President’s credit cards to pay for personal expenses. He escalated quickly and by early 2012, he was transferring funds out of her personal bank account in order to pay his and his mother’s bills. He did this until there was no longer any money in the President’s bank account. Myles did not let this empty bank account stop him though; he then started transferring money from the business accounts, first, into the President’s personal bank account and, subsequently, into his own personal accounts. On days when he felt particularly bold, or reckless, Myles would transfer money straight into his and his mother’s personal bank accounts. Christopher Myles had unfettered access to all of these accounts, both business and personal, and never needed anyone else to sign off on any of the funds he moved into and out of these accounts. The lack of segregation of duties made this fraud simple for Myles.

If anyone had been watching him and taking notice, they may have noticed that Christopher Myles was living beyond his official means. He used his ill-gotten funds to buy a new home, go on shopping sprees and fancy vacations. This is another red flag for possible fraud. Throughout this fraud, created falsified bank statements and recorded all of these illicit transfers as business transfers. Unfortunately, no one followed up closely on any of these untruths. Perhaps none of those looking at the fake bank statements understood how the company worked and what kind expenses would appear as out of character, or maybe no one was familiar with the ledger and how to analyze it. I am not sure, but, the result was that Myles was able to continue his fraud for over two years (just a little bit longer than the median duration of a fraud), until November 2013, when he resigned.

It was only when his replacement discovered the fraudulent invoices that Myles created, in attempt to disguise his embezzlement, that Christopher Myles’ theft was discovered. A forensic investigation revealed that, in two years, Myles had stolen about $1.3 million from his employer. Myles’ former employer reported all of this to the authorities and, in addition to an indictment for the theft, Christopher Myles is also facing tax evasion charges. This is because, in the manner of Al Capone, Christopher Myles did not report any of his fraudulently acquired income on his tax returns.

Almost like a bonus in the lesson that keeps on giving series, once his theft had been exposed, Christopher Myles sent an email to all parties involved. In this email, he RATIONALIZED his fraud, claiming that he was entitled to the funds because he was due a raise and compensation for having to deal with a difficult coworker.

As I read the press release about Christopher Myles’ indictment, my jaw hung open. I said out loud, “wow, this has all the classic markers; it’s unbelievable!” Yet, the markers are classic for a reason. There are probably a lot more lessons to learn from the story of Christopher Myles, but don’t get me started!

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Communications Addendum

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I was just in the Dominican Republic on a birthday/honeymoon/Thanksgiving trip. They say that people don’t do it well, but I think that we are doing a great job of multitasking vacations. However, I digress, as I am wont to do.

My husband lives for surfing. He checks the weather, daily, to see how it will affect the waves. He goes surfing, in the dead of winter, in New York City and, if that isn’t dedication, I don’t know what is. I get frostbite just thinking about it. When we travel, we often look to go to places where he can surf and, while he is surfing, I either go for a run or I take a surfing lesson.

During our multitasking vacation, I took a lesson. The lesson started out on the beach, with a session on technique. That went very well; it is very easy to surf on an immobile board that sits on sand. After this session, we were then each sent out with a board and an instructor. In addition to the challenge of keeping water out of my nose and mouth and, of course, trying to ride the waves, while standing on my board, I had to figure out how to communicate with Francisco, my instructor. My Spanish does not even qualify as rudimentary and, even though Francisco’s English was decent, I managed to do odd things on the board that he struggled to explain. Instead of giving up on me, he called on his co-instructors to bring together what English each knew. And they came up with a complete critique of my surfing technique, or lack thereof. My ego could have done with less resourcefulness, but my drive to succeed on the board appreciated it. The collaboration of these men was able to cover a lot of issues and, in no time, I was standing on my board and feeling rather accomplished.

Francisco, reinforced, for me, the power of collaboration, effective communication and, without a doubt, of having someone find you the perfect wave to ride. Gracias!

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Desperate Needs, Gouging Measures…

IMG_2231When I lived and worked in Zimbabwe, my parents and I lived in different cities, about an eight-hour drive apart. My father, however, was in town at least once a month for meetings and, when he came to town, we would meet for and evening of dinner and catching up. On one such evening, we were sitting in his hotel suite, eating dinner and watching the news. There was a piece on about an Ebola outbreak in the Democratic Republic of Congo. At the time, people were speculating that people living in the area where the outbreak had occurred had come across dead animals in the forests and had eaten them. Handling the dead animals (which had been killed by the Ebola virus) had infected them with the virus. I looked over at my father and said, “Why would they eat a random dead animal they came across in the woods? I mean, wouldn’t they ask themselves what had killed this animal and wouldn’t they be scared of being killed by the same thing?”

My father looked at me and said, “My dear, you can’t judge them. You don’t know what you would do if you were starving? Who knows what you would eat.”

Since, at that moment I was working my way through a three-course dinner, it didn’t seem like the appropriate moment to argue with my father, but I was pretty sure that no kind of hunger would lead me to eat dodgy food. I do know now that I was judging because I am fortunate enough to have many food options.

It turns out that investigators now think that fruit bats, not mysteriously dead animals are to blame for the spread of Ebola, but I thought about this conversation with my father when I read a piece in the New York Times about usury charges being brought against several payday loan companies, their owner and two of his associates. Usury is one of those not often heard words that is at home in the bible or a Shakespeare play, but it basically is illegally lending money at very high interest rates. I first heard analysis of payday loans on the NPR podcast, Planet Money, who, in 2010, discussed payday lenders. The concept of a payday loan is that people take out a small loan that is that is then paid back using the borrower’s next pay check. These loans, however, charge much higher interest rates than banks or credit cards do. The Planet Money episode referred to rates of over 500%. A more recent Planet Money piece spoke of a loan being offered at an annual interest rate of over1,300%. Many people debate payday loans and the people who take them out. Some argue that people who take out these loans are people who are irresponsible with their money and the payday loan rates are so high because the borrowers are risky. Others will talk about how payday lenders target people with low incomes and get them into a cycle where they end up spending years paying high fees and never being able to repay their initial balances.

In the state of New York, all this debate is moot because payday loans are illegal. When announcing the indictments, on 12 August, the Manhattan District Attorney, Cyril Vance, encouraged victims of payday lending schemes to call the Major Economic Crimes hotline. This is important to know, whether you received the loan at a storefront or online, the practice is illegal in New York, seventeen other states and District of Columbia. This is because, when people feel they have few options, people with few scruples like to take advantage of the situation. These are the types of people who offer to lend you $750 for a week, at a cost of $225. To make this point clearer, if you borrowed that $750 for a year and paid this interest on the loan every week, you would pay a total of $11,700 in interest. That is a lot of money to pay for $750 and I think that most people would agree that charging that kind of interest qualifies as usury.

Even if payday loans are legal where you live, the lenders still have to comply with rules that govern their industry. If you believe that you or someone you know is being taken advantage of, with regard to a payday loan, you can either call your local district attorney’s offices or get in touch with the Consumer Financial Protection Bureau (CFPB), which is the federal agency whose mission is to protect consumers of financial products. It is important to know that there are protections in the system and there may be more options than you think, when it comes to finding ways to pay debts or make ends meet and not every option involves interest rates that would make your calculator give you the side-eye. Knowledge is power and sometimes knowledge can also save you money and keep you from having your rights violated.

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Red Flags

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On the morning of the Fourth of July, I received a text message from my sister-in-law. It read:

“Hey, I just sent you a photo. Click the link to view my photo before it expires:”

Following the message was a link. Instead of clicking on the link, I wrote back to my sister-in-law, asking her if she really sent me a photo. I told her that I wanted to be sure before I clicked on the link. Almost immediately, she wrote back, telling me not to click on it. A friend had sent her the message and, when she clicked on the link, she did not get to see a photo. Her only prize was that a message was sent out to every one of her contacts. I have written before about computers being attacked. However, people tend to overlook how exposed to attacks smartphones are. Most people take the time to install anti-virus software on their desktops and laptops and tend to be more careful about what they install or what emails they consider to be valid and not spam.

Smartphones are a different animal. Perhaps because people refer to them as phones, they forget that they are mini-computers and possibly more risky than our desktops and laptops because there are more opportunities for a virus or malware attack. In addition to getting infected by an email or a bad search link, a smartphone can be attacked via various other routes, such as text messages (as my sister-in-law was), malware posing as an app in the app store or a scanned QR code that leads to a bad website. People keep a lot of information on their cellphones and this information is very vulnerable and can be stolen without anyone laying their hands on the physical handset.

There were several of reasons why I did not automatically click on the link that was ostensibly sent to me:

  1. The message was too generic.
  2. Why was the link going to expire? There are so many storage sites that are free, why would you have your photo somewhere where it would expire?
  3. Why didn’t she just send the photo? One of the many great things about smartphones is that you can send photos to people’s phones and you don’t have to send them a link, especially not for just one photo.

It is easy to talk about how smart you were when you have dodged a bullet but even computer security experts get attacked – hackers and makers of spam and malware put a lot of energy into getting into people’s systems. That said, it is always good to take preventative measures to minimize the risk of an attack and some tips are:

  • Be very careful about clicking on links in emails or text messages. If the link comes with a generic message, even if the message is from your best friend, check with the sender to make sure that the link is valid. It just takes a few moments and can save hours of the headaches that come with trying to clean up an infected system. Once they have confirmed that the message is from them, you will feel much better about clicking on that link. My friends now know that occasionally I will check with them and they are perfectly happy to send back a quick response.
  • Look into getting anti-virus software for your smartphone.
  • Be careful when loading apps on your phone. When installing an app, your app will ask you for permission to gain access to certain aspects of the phone. Read these requests and make sure you know what you are giving permission for. Also read the reviews for the apps to see if there are any warning messages about what the app may do to your phone once it has been downloaded.
  • Be aware of what you are scanning with your QR reader.
  • Regularly backup your smartphone. In this way, should you need to wipe it, for any reason, all that was on it has been recorded elsewhere.
  • Should your phone be attacked in some way, take it in to be looked at to make sure that any infection has been cleaned out – you don’t want to find out that some malware has been stealing data from your phone for months or that you have been incurring huge messaging fees because this malware is sending text messages our using your account.

The risk is there but it is a good idea to take steps to protect your phone and your sanity. Oh, and the sanity of your friends – I can’t imagine how the people who clicked on my sister-in-laws nefarious link reacted to having their phones invaded and their entire list of contacts being spammed.

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