Kozlowski's $6,000 Shower Curtain Added to the ACFE Fraud Museum

Dennis Lynch, former Tyco VP and Chief Litigation Counsel, delivers the infamous shower curtain to ACFE Chief Operations Officer Jeanette LeVie.

AUTHOR'S POST

Mandy Moody, CFE
Content Manager

Corporate greed at the executive level has destroyed hundreds of companies, drained stockholders of their investments and left innocent employees without work. Ken Lay, Jeffrey Skilling, and Andrew Fastow from Enron; Bernie Ebbers from MCI/WorldCom; and Dennis Kozlowski at Tyco have become household names, and too many exemplify what can go horribly wrong when the tone at the top goes askew.

Dubbed the “archetype of avarice” by The New York Times, Kozlowski could have written the book on how NOT to set an ethical tone at the top. This gold and burgundy shower curtain, which was hung in his maid’s bathroom at his residence on 5th Avenue in New York, was reported to cost more than $6,000.

However, his lavish lifestyle did not stop at bathroom décor. In 2001, he reportedly threw a $2 million Roman-themed party for his second wife’s birthday in Sardinia. According to the Times, Jimmy Buffet played the guitar and an ice sculpture of David was displayed urinating Stolichnaya vodka. He owned impressionist paintings and a 130-foot yacht that was originally built for the 1934 American Cup.

His empire came crashing down when he was indicted for tax evasion on a $14 million piece of artwork. This led to a larger internal investigation into his business practices at Tyco. In 2005, Kozlowski was convicted of stealing nearly $100 million from Tyco and was sentenced to a maximum of 25 years in prison. He served the minimum sentence of eight and a half years, and was released in 2014.

You can view the shower curtain in all its glory at the upcoming ACFE Global Fraud Conference in Nashville, June 18-23, in the Traveling Fraud Museum Exhibit. Remember, you can still save $100 if you register by May 10!

Traveling Fraud Museum Looks at Fraud on the Big Screen

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Courtney Babin
ACFE Communications Coordinator

While the Fraud Museum’s permanent home is at ACFE headquarters in Austin, Texas, each year a traveling exhibit featuring selected pieces goes on display at the ACFE Global Fraud Conference. Made up of artifacts, memorabilia, documents, and other pieces of fraud history collected by ACFE founder and Chairman Dr. Joseph T. Wells, CFE, CPA, this year’s Fraud Museum displays financial frauds depicted on Hollywood’s big screen. The pieces reflect on productions like The Wolf of Wall Street, The Big Short and the recent ABC miniseries, Madoff. 

A must-see piece at the 27th Annual ACFE Global Fraud Conference, June 12-17 in Las Vegas is “Fraudulent Russian Investment Notes” from the Russian company MMM. The notes feature a portrait of Sergei Mavrodi, one of three founders of the company. These notes — which are worthless — are a reminder of Russia’s biggest Ponzi scheme. At the peak of its performance, MMM was collecting $11 million daily. Ponzi schemes are distinguished by paying the principal and interest for old investors with money collected from new victims. Because of the multiplier effect, all Ponzi schemes are destined to eventually fail. For this particular scheme, losses eventually reached $1.5 billion, collected from several million investors.

Another piece to check out is the tongue-in-cheek “Wall Street ‘Most Wanted’ Playing Cards” in the Wolves of Wall Street display. This card set hosts caricatures of many corporate titans who have been charged with major accounting frauds. Some of the fraudsters include Ken Lay of Enron, Martha Stewart and Scott Sullivan of WorldCom.

Check out the other fascinating pieces from the far — and recent — past when you stop by the Fraud Museum exhibit. Remember to bring this conference guide with you and take the quiz on the next page. Be sure to submit your answer sheet in the submission box located at the Fraud Museum exhibit and you will be entered to win a $250 gift card (one answer sheet will be drawn at the end of the conference to determine the winner). Good luck! 

The Mystery of the Eccentric Evangelist

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By Cora Bullock, Assistant Editor, Fraud Magazine

One of my favorite things about being part of the ACFE is the emails and discussions that fly around about the craziest fraudster news and headlines. One recent story in particular intrigued me. Aimee Semple McPherson was a preacher from the 1920s who left Canada to spread salvation throughout the U.S., finally settling in L.A., which was just teeming with sinners, according to her. I had never heard of her, but her story is incredible. I found a video of her online, preaching about Broadway being the "mecca of sin" (apparently sin stretched coast to coast). She's pretty, dramatic and waves her delicate hands around while bashing sin in the sweetest, most melodic voice, even breaking into song. So, of course, she made the perfect fraudster.

Sister Aimee was at the vanguard of the new technology of radio, and she was the first woman to preach on the airwaves (she ended up owning a station). She wrote plays, started two magazines, hired PR and media people, and her publicity stunts were legend. She would blast out sermons via megaphone from the back seat of her 1912 convertible, and burst into brothels and boxing rings to preach. She eventually opened the Angelus Temple in L.A., an elaborate, 5,000-seat megachurch where thousands went for her supposed healing powers. It featured a huge, lighted cross, so sinners could see it from miles away. The walkway between her house and the church had so many reporters hanging around, ready to report on her every move, that it became known as "newspaper alley." In San Diego, 30,000 attended one revival, which lasted five weeks and required the Marines and Army to help maintain order. She was a rock star at these revivals, dressed in a flowing white gown, speaking in tongues and imbuing the holy spirit into the crowd, supposedly healing the sick, giving sight to the blind. During broadcasts, she even told her radio listeners to place their hands on their radios so she could heal them.

And then one day in 1926, she just up and vanished while swimming. Her followers assumed she was dead and went into mourning, and newspapers reported her death on their front pages. "The Jungle" novelist Upton Sinclair wrote a poem commemorating her, titled "An Evangelist Drowns." One of her followers threw herself into the ocean and drowned, and one of the divers searching for her body died of exposure.

Five weeks later she appeared out of the desert in Agua Prieta, a Mexican town just on the other side of the border from Douglas, Ariz. She claimed she'd been kidnapped and tortured and barely managed to escape. But she was in good physical shape and her shoes weren't even dirty. Rumors spread that she had fled to Mexico with her married lover and concocted the whole story. The inconsistencies in her story caused a frenzy in the press, but two grand juries didn't indict her of perjury. In 1944, she ended up OD'ing on sleeping pills and sedatives.

Stories of such alleged fraudsters that I've never even heard of fascinate me. If you want to find out more stories like Aimee's, be sure to check out the traveling Fraud Museum exhibit at the 24th Annual ACFE Global Fraud Conference, June 23-28, 2013, in Las Vegas.

Let the Countdown Begin: ACFE Prepares for Annual Conference

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Cora Bullock

Assistant Editor, Fraud Magazine

Staff is abuzz here at the ACFE headquarters in Austin, Texas. Not about summer plans, but about the 22nd Annual Fraud Conference. I just came on staff in January, so I have not had a chance to attend, but that will change in a few weeks.

To be perfectly honest, when I first learned about the conference, I was nervous. VERY nervous. How was it possible that our staff could pull off the world’s largest anti-fraud gathering? The answer has become clear these past few months: hard work and fierce dedication. If anyone doubts that, they can listen in on the endless vendor and attendee calls, the packet stuffing, the auction organizing, the speaker wrangling, etc. etc. I sit among the event staff and have witnessed this, and more.

We will be creating webpage templates for stories and video. Speaking of video, we’re putting the finishing touches on the Fraud Museum video, and next week several of us will carefully remove about 30 pieces from the walls to pack them for their trip to San Diego. We’re also finishing “Conference Link,” the new e-newsletter that attendees will wake up to in their email boxes every morning of the conference, highlighting must-sees and must-dos, along with links to the previous day’s coverage. That will be ACFE social media guru Mandy Moody’s and my last task every night before we crash into bed so that it will be the first item in your inbox when you wake up in the morning.

Be sure to check the ACFE Annual Fraud Conference site for real-time conference coverage, photos, video and more. And, yes, we have some prizes we can't wait to give away.

Everyone does everything at conference. I will write stories on the break-out sessions, man the registration table, help set up and break down, act as a room monitor for some sessions, take photos and interview attendees, finally meet some of the writers for Fraud Magazine, answer questions and, most importantly, meet members! If you see a short brunette bearing down on you with a determined look in her eye, that would be me. I’ll try not to wring a promise out of you to write for the magazine, unless it somehow just happens to come up in conversation ….

We have fancy new ACFE blazers to wear, so now I’ll have to start thinking of wardrobe, especially shoes. What can I wear that will be comfortable from 7 a.m.-9 p.m. every day? Do those even exist? No matter, I’ll let the excitement of each day carry me away. Oh, and a respite from 95-degree days in Austin! See you soon!

An Open House That Feels like Home

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Bruce Dorris, J.D., CFE, CPA, CVA, ACFE Program Director

Imagine the huge spread of a tailgate party outside your favorite college stadium; mine just happens to be Louisiana State University. Where I grew up, tailgating was as consistent as church on Sundays. The beginnings of a football season meant people were outside enjoying good weather and good company.

This also happens to be the typical feel of an ACFE Open House. Held at the ACFE headquarters in Austin, Texas, we are proud to host exclusive opportunities to see the ACFE up close and personal after attending our courses and seminars. In fact, the upcoming Principals of Fraud Examination course I will teach in December will be no different. Walking up the lawn to the historic, three-story Gregor House is only a preview to the unique experience that waits. Food and drink are plentiful. You are greeted by a friendly handshake and a warm smile from staff and attendees alike.

The porch, a portion of the original house built in 1925, and its swing stand out. This is where the ACFE got its start more than 20 years ago. It’s a great place to hang out and network, and even where part of this blog post was written. The ACFE Fraud Museum, a collection of fraud relics, continues to attract people (and not just for the Open House). Attendees can take their time walking through the museum and getting a sense of the extensive history of fraud cases and characters from all over the world. From Charles Ponzi to Bernie Madoff, the significant and interesting fraud memorabilia from the past 100 years is conveniently displayed on the walls of the ACFE offices. It is something you have to experience in person. I still pick up something new regardless of how many times I go through it.

The Fraud Museum and the Gregor House are a huge part of the ACFE, and the Open House events really showcase these integral parts. I have made a lot of friends at these events over the last few years, and hope to make many more. I hope to see you there.

View photos from the ACFE Open House, Nov. 2, here.