Chapter Nineteen

THE OTHER SIDE OF FRAUD

The more women work and the more senior the positions they achieve, the more they discover the extent to which downright lies, sharp practice, covering up what really happened and non-payment of debts are considered quite normal in business. The most honest and pleasant-seeming men accept all these goings-on. Many even trot out the fact that they have a wife and children to provide for to justify them cheating the other man before he cheats them.

This attitude sets up another hidden barrier to women's advancement. We are generally unused to and shocked by dishonesty. It hits us unawares. Our reaction reminds our male colleagues how they probably felt when they first encountered the same thing - before they smothered their scruples in the interests of their career and 'being a real man'. They don't like to be reminded that they have changed.

Women in senior positions offer a threat to any organization's existing practices. This provides another reason to exclude them.

Unfair to men? Too black and white? What is your reaction to the following, for instance?

Client Fred is just leaving. His hand grips the door handle. He says to his accountant over his shoulder, 'I'm off to my broker Joe now. I've decided to invest £250,000 in XYZ Trusts.'

The accountant watches the door shut, grabs his phone and calls Joe.

'I'm sending Fred to see you, ' he smirks. 'I've recommended him to buy XYZ Trusts and I expect my commission.'

'Sure,' replied the broker, and the accountant has just earned himself £2,500.

Quick thinking? Smart opportunism? A downright lie? When the boss boasts of it to you (forgetting in his pride that you are a woman) how do you respond? Would you have thought to try it yourself? Will you risk it next time?

Or how about this:

'Add £2,000 on the invoice and hand it to the client when he calls in, ' orders the boss. 'If he pays up, fine. If he quibbles, refer him to me. I'll say you made a mistake, call you into my office and give you a bloody good telling-off in front of him, OK? Then we'll change the invoice back.'

A man can tell another man about his 'fiddle' with a laugh over a pint. He gets embarrassed when he tells a woman. You can bet that if an organization is up to anything really shady, senior women (if there are any) or even bright juniors are kept well away from it. The time-honoured excuse is, 'Women cannot keep a secret'. The truth is that men fear women's disapproval. These are basically decent, respectable men, remember, not mafiosi.

As women advance up the career ladder, this exclusion becomes more difficult. Besides, a court might let off a secretary on the grounds that she did not know what she was a party to. It would not exclude a company director or trained accountant just because she happened to be female. So senior women are vulnerable.

'I'd never work for anyone dishonest, or take them as a client,' Patrick preached at me after I had told him a tale or two. Patrick was an accountant and nobody's fool, but he had never worked outside the Civil Service.

'You don't understand,' I explained. 'They don't creep into your office with a stocking over their heads, a jemmy sticking out of one pocket and a bag marked "swag" over one shoulder. They are charming and persuasive, apparently very affluent and on the point of hitting the big time. It is not until the second or third meeting that you discover that they have just come out of prison. By then you have spent hours working on their next project. So they owe you money. How will you ever get paid if you throw them out then and there? And what if they are really trying to go straight?'

Any practising solicitor or accountant has to deal with, try to help and justify the activities of people he or she does not like, trust or approve of. ( I have even known accountants too physically afraid of their clients to ask for their money.) If he or she did not, justice could never be done and complicated frauds could never be unravelled.

Some fraudsters  combine the air of authority of a judge with the glib tongue of a disc jockey. They can make it seem an exhilarating challenge to circumvent the rules. I had one client like this who was so dynamic that in an hour's meeting he would never actually sit down.  He parried awkward questions by insisting on making an urgent transatlantic phone call that minute.

Remember, it is not only you and the punters whom these con men are deceiving. I once read through a client's bank statements for the past ten years. On day one, he persuaded the bank to lend him £10,000. Then another £20,000. Then another £50,000. And so on, until the debt totalled £1 million without him having paid back a penny! Yet the manager was no dumbo either.

With professional conmen, even when it is your life savings they have stolen, you still like them!

A colleague who handled only bankrupt companies told me how he watched one fraudster in action. This smoothie held at bay a hall full of 200 angry creditors, every one of whom he had cheated. By the end of his 'explanation' some were brushing tears of sympathy from their cheeks. Yet they knew he had scuttled off to the Caribbean when things grew too hot and had been forcibly returned. My colleague admitted that he felt nothing but admiration. If the same man had held up those creditors at knifepoint on a street corner, they would have been screaming to bring back flogging.

Your only hope is to have nothing to do with known fraudsters at all - ever- or only as little as your job allows. Never part with a penny. As the saying goes: if you lie down with the dog, you get up with fleas.

'I had a stranger come in and demand help in laundering,' I told Patrick, who was still unconvinced. * 'He had salted away several hundred thousand pounds of bribes in a Swiss account. How could I show him the door when he claimed to be a close relative of my boss?'

There are ways of coping with this. You can point out to the client the powers of the Inland Revenue. Show them that the successful fiddle on which they pride themselves is commonplace, easily detected and certain to be unearthed in the fullness of time. Indeed, the longer it goes on, the more it will cost them to straighten out.

It is possible to frighten someone into being honest, or even coming clean. It is a lovely sight to watch a bully of 6 feet 6 inches and a known record of violence reduced to a quivering jelly by an innocent letter from the Revenue computer.

On the other hand, it is possible to be led on and on, sinking in deeper and deeper until the courts would consider you as guilty as your client.

How many husbands come home worried, snap at their wives and drink too much because of what they have been forced into at work? Now they are afraid of exposure. They are too ashamed to share their worries with a wife who thinks being honest the simple matter of not touching a penny from someone else's purse.

Having dishonest clients is one thing; having a dishonest boss or partner is another. Again, you may work together for years before you realize what is going on, especially as women are kept clear of anything dubious. You can gauge a lot about your boss by the way he reacts to what you think dishonest, just as he can tell a lot about you and what you will tolerate for the future.

If nothing else, you must protect yourself. Keep written records of everything to show that what you did was either legitimate or at least under orders. You don't want to be the fall guy, the scapegoat, when all is revealed. If this happens too often, leave.

Remember, it is possible to jump from the frying pan into the fire. Your new employer may be worse. The best you have to go on is the reputation of the firm locally and what professional associations the owners may belong to. All such associations produce a code of ethics which should govern the behaviour or members.

People often muddle tax avoidance and tax evasion. (We touched on this in Chapter 6.) Both aim to reduce the tax a person may pay. Avoidance is legal; an expert uses a detailed knowledge of the law to find the loopholes and to arrange a client's affairs to take advantage of them. It may be as simple as telling a client not to sell something, or not to come back into the country until after 5 April.

Evasion is illegal and can send you to prison. It involves either hiding income or falsifying expenses to claim - as with the beautifully typed invoice I saw for work done by a limited company that no longer existed. That invoice charged £80,000. There was a whole sheaf of them.

My client had bought the blank headed invoices from a friend on a building site and had any figures he fancied typed in. He then produced the invoices as expenditure by his business. Would the typist who typed the invoices be prosecuted? Probably not, unless she was the wife of the owner of the company and a company director in her own right.

A CAUTIONARY TALE...

Finally, as promised back in Chapter 7, here is the tale of the one female fraudster I have come across.

Stella was pretty and beautifully turned out. She had an adoring husband and a couple of healthy children. She was also greedy. She ran her own boutique but also sold nearly new furs on commission. The owner took two-thirds of the sale price and she kept one-third.

When Stella died, her solicitor visited the shop to list all the stock. He counted everything and returned all the unsold furs to their owners. An entire rack remained unaccounted for. The furs must have belonged to Stella, but she had never mentioned them in her accounts. Realizing that she had been on the fiddle in a big way (we are not concerned with rabbit skins), the solicitor consulted her accountant (my firm), gathered his evidence and headed for the Inland Revenue.

Slowly, painstakingly, we worked together to reconstruct what had happened. Stella had run her business for fourteen years. The solicitor discovered traces of so many bank and building society accounts that he wrote to every branch of every organization in the West of England. Even more accounts came to light, some in her married name, others in her maiden name. Yet others, discovered by pure fluke, appeared in completely different names. No doubt there are more accounts that we never discovered beyond the thirty-odd that emerged.

Stella had not just amassed money, she had spent it. She had bought, houses, sometimes several in the same street, and shops. She had collected the rents, lived in the properties or sold them again as the fancy took her.

Her husband could shed some light on this. He recalled one holiday in Switzerland. After an extravagant meal, Stella had called the owner of the hotel to her table. She had asked him flat how much he wanted for his hotel. The owner had sat down beside Stella, and her husband had listened, mouth open, as the two of them discussed details of sale.

But as time went on, her husband knew less and less of what Stella did. She had built him a fabulous house overlooking a lake, but kept her affairs from him. The husband, weak and in poor health, had never suspected anything was amiss and never set foot in the shop anyway.

So what happened to Stella? Her affairs grew to an almighty tangle, some legal, some not. Her illegal gains prevented Stella from sorting anything out, or even discussing them. Her husband now says he noticed signs of mental instability, whatever that means.

Anyway, the fact remains that with a thriving legal business, never mind all the rest, a family and a not-unhappy marriage, with money coming out of her ears, still young and attractive, Stella committed suicide. Which is how the whole thing came to light.

Moral? Women make bad crooks? Money isn't everything? Oh what tangled webs we weave...? Draw your own conclusions.

Anyway, by selling off everything in Stella's name (her husband kept what he had) the solicitor raised £90,000. This would probably have bought three semi-detached houses at the time. Every last penny went to the Inland Revenue.

*'Laundering' means hiding money that the owner would rather not explain inside a genuine business, so that they can pretend they earned it in the business.

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