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Wednesday, April 24, 2024

What’s in Your Wallet?

Dive deeper into the world of Business Blunders with business writer, editor, and friend Al Lewis as he explores the financial adventures of Jacksonville Jaguars’ former finance manager, Amit Patel. 

What’s in Your Wallet?

Abusing company credit cards is a common employee grift

“Whoever is careless with the truth in small matters cannot be trusted with important matters.” – Albert Einstein

Your boss just issued you a company credit card. What do you do? 

Buy a Tesla? A $95,000 watch? A beach condo? Why not just go on another online gambling binge?

That’s how the Jacksonville Jaguars’ former finance manager rolled as he manipulated the NFL team’s virtual credit card program, federal prosecutors allege. Last week, Amit Patel, 31, was sentenced to six and a half years and ordered to pay back the $22 million tab he ran up on the Jaguar’s good credit.

Patel’s lawyer argued his client suffered from a gambling addiction and only continued to perpetrate the scheme in hopes of winning big and paying back the loot. It’s what they all say: It started out small and just kinda snowballed

Patel allegedly bet recklessly on FanDuel and DraftKings, chartered private jets, joined a country club, and bought all kinds of pricey baubles that he will not need in prison. He could have at least bought a Jaguar, instead of a Tesla, as an homage to his team.

“He spent that money to live in the fast lane for more than three years – all the while, covering his tracks by manufacturing fraudulent accounting records,” prosecutors alleged in a sentencing document.

The lesson for companies is simple: Don’t hire flashy finance managers who love to gamble and validate themselves through uber-lux lifestyles. And not to blame the victim, but $22 million? Where were the internal controls, Jags?

“We gave him his dream job,” Jaguars chief legal officer Megha Parekh said, reading a statement from the team. “We trusted him. We worked with him. We broke bread with him. We went through a pandemic and the highs and lows of the NFL with him. He betrayed us.”

How often do employees misuse company cards?

 

Credit card website Upgraded Points recently surveyed 500 company credit card holders and found:

  • One in five have intentionally made personal purchases with their company credit cards

  • 21% have done this unintentionally

  • 62% are aware of colleagues who’ve misused cards

  • 18% say this is commonplace

It’s not hard to find examples. Also last week, publicly traded cannabis company Trulieve sued its former chief financial officer for allegedly racking up more than $350,000 in personal charges on company cards, as first reported in Green Market Report.

Alex D’Amico resigned last year following an inquiry into suspicious charges, the company said. Trulieve’s civil lawsuit, filed in U.S. District Court for the Northern District of Florida, alleges that he raided “corporate coffers to finance his personal largesse as if it were his own personal slush fund.”

There’s always the danger that some percentage of highly entitled card users are going take that old American Express slogan way too literally: “Membership has its privileges.”

 

So, what’s it like being a sociopath?

 

Patric Gagne offers some answers in an upcoming book, “Sociopath: A Memoir,” to be published April 2 by Simon & Schuster. Some excerpts from her essay in The Wall Street Journal:

  • “I started stealing before I could talk.”

  •  “Whenever I ask my mother if she remembers the time in second grade when I stabbed a kid in the head with a pencil, her answer is the same: ‘Vaguely.’”

  • “Empathy, like remorse, never came naturally to me.”

  • “The afflicted have been maligned and shunned by mental health professionals who either don’t understand or choose to ignore the fact that sociopathy – like many personality disorders – exists on a spectrum.

Highly functional sociopaths rarely end up on a therapist’s couch without a court order. Instead, they often climb corporate ladders and bag money on Wall Street, which helps explain our ruthless bosses and the never-ending cycle of  scandals, implosions and economic crises.

Sociopath, psychopath, malignant narcissist – most of us aren’t qualified to diagnose these related disorders, but we sure do suffer the behaviors. 

Congrats to Gagne for a brave book. And how about a little empathy for sociopaths – from those of us who have it?


Trying not to speak ill of the dead

 

Gerald Levin, the former Time Warner CEO who engineered a disastrous mega-merger is dead at 84. That’s the Associated Press obituary headline following his March 13 passing.

Levin, once the world’s most powerful media mogul, is being remembered as “aloof,” “insular” and “not a people person.” These traits cost him dearly. As the media landscape shifted violently in the late 1990s, he apparently did not have his cable box tuned to the right shopping channel.

He fell hard for the early Internet hype. In 2000, he orchestrated a $165 billion merger with AOL and suffered the consequences of its dubious accounting practices. The move swiftly became known as the biggest blunder in corporate history. It eventually wiped out $200 billion in shareholder value and cost thousands their jobs.

“I don’t just want to be known as the CEO of AOL Time Warner,” Levin said as after he stepped down in 2002. “I’m not just a suit. I want the poetry back in my life.”

The song ended. The poetry is gone. Despite Levin’s prior successes, he’s remembered for his blunder. But at least his contribution to corporate history will rhyme.


Wall Street’s prognosticating  billionaires got it wrong

 

JPMorgan’s Jamie Dimon, Bridgewater’s Ray Dalio and DoubleLine’s Jeffrey Gundlach all predicted that seismic economic calamities would have hit us by now.

They trafficked in fears of economic hurricanes, recessions, debt crises and stock market nosedives – but the economy proved remarkably resilient and stocks hit record highs.

“I was bearish on the economy,” Dalio said in a Wall Street Journal interview. “I got it wrong.” (There is valor such candor.)

“I would have thought some of the fiscal stimulus would have worn off by now,” Dimon told the Journal. (The stimulus came in trillions. Who could count it all?)

Gundlach didn’t return WSJ’s call. (Chicken Little.)

One of the most blundering things we do in the financial media is highlight bloviating billionaires as they talk their books, and we pretend that since they’re rich, they can predict  the future. (Yes, I’ve done it, too. Hey, it clicks. Sorry.)


You know what else sucks about prison? The food.

 

Klepto-crypto king Sam Bankman-Fried should get 40 to 50 years in prison after his conviction on one of history’s biggest frauds, prosecutors argued on Friday.

The 32-year-old FTX founder wanted to become the world’s first trillionaire and still won’t admit wrongdoing, prosecutors said.

Bankman-Fried potentially faces 110 years. His lawyer has argued for maybe six. The prison system, he complains, is not providing his client’s Adderal or accommodating his vegetarian diet.

“He’s literally now subsisting on bread and water, which are the only things he’s served that he can eat, and sometimes peanut butter,” attorney Mark Cohen told the court.  

What about the victims of Bankman-Fried’s $40 billion crypto collapse? What are they eating?

Thanks for sending Business Blunders off to a respectable start!

Read The Inaugural Issue

We launched on Friday with more than 6,000 on the subscriber list, but it’s a challenging topic. In my experience, many business readers only want to read about how to get rich or what stocks to pick. They don’t worry about blunders until they affect them personally. And that can be a blunder in itself. Thanks for sticking with me, everybody. – Al Lewis

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