All participants who attended the recent Business Credit Fraud Symposium, held December 3 and 4 in Las Vegas, were big winners. The attendees of this year's symposium learned how to protect their company's "bottom line" from credit criminals and other white-collar bandits. This is costing U.S. businesses approximately $400 billion each year. According to the evaluations of attendees, this year's symposium was one of the most highly rated programs presented by the Loss Prevention Department.
The symposium wasted no time in alerting attendees of the realities of white collar crime. The first speaker was Alan Levy, whose "career" as a white collar criminal and bustout artist spanned more than 20 years, and bilked companies out of millions of dollars. Levy says that he does not view white collar crime as a victimless crime. He said that he "did as much damage as a bank robber, put a lot of people out of business and ruined a lot of lives." Levy also stated that there was no rational reason why he became a criminal, except that he liked the action. Levy was arrested three times, but only served five years in jail. He noted that if he had received appreciable jail time for his first crimes, maybe he would not have continued. He stated that his first sentence, which was very lenient, only reinforced his belief that he would not get caught. Levy described a bustout as a simple crime, stating that he only needed "three companies to give him credit" and then the seam was almost impossible to stop. Levy described the various ways he duped creditors by manufacturing his own financial statements, creating glowing references and buying a banker to provide good references. Levy said that bustouts are up to the credit manager to prevent. "It all starts and ends with the credit manager," he said.
After hearing about the realities of a bustout seam firsthand from a credit criminal, the attendees learned about practical defenses to avoid becoming a victim of bustouts from Todd Sheffer, Director of NACM's Loss Prevention Department. Sheffer told attendees that business credit fraud was one of the original reasons for founding NACM in 1896. He stated that as in 1896, prevention is still the best weapon against fraud. One of the goals of the Loss Prevention Department is to issue early warning notices to members to prevent them from taking losses from bustouts. Sheffer covered the warning signs of a bustout by using real life cases from the Loss Prevention Department files. One of the case studies Sheller showed was a Southern California electronics, computer and apparel firm which ordered heavily before filing an Assignment for the Benefit of Creditors. This particular firm stuck creditors with balances that ranged from low six-figures to low seven-figures. Another case study showed a Southern California importer of men's suits who used audited financial information and a strong bank reference to order consumer products totaling several million dollars. This firm filed a Chapter 7 Bankruptcy and was the third successful insolvency operated by the same group of individuals. Sheller showed that on the surface these cases appeared to be strong, but in reality, many of the firms were built on phony credit and financial information. Loss Prevention members saved thousands of dollars as result of the early warning notices that they received on these cases.
One of the highest rated sessions of the symposium was the panel discussion anchored by law enforcement officials who have spent a large part of their careers fighting white collar crime. The officials were AUSA Maureen Tighe, LAPD Detective Supervisor Rene LaCasse and FBI agents Rick Jesinger and Charles Sandefur. The panelists cited that their number one concern in fighting white collar crime is the lack of resources for those that investigate and prosecute white-collar crime. Detective Supervisor LaCasse said that he has only six detectives to handle all the fraud and counterfeiting cases in Los Angeles. …