We - modern America that is - have become so damn impolite. We don’t give people the simple courtesy of a reply when contacted by email or phone. The idea of acknowledging someone with a smile while passing on the street is at best an anachronism; at times it’s even considered an affront. And being greeted when entering a store is less commonplace all the time. What are we becoming (or have already become)? Furthermore, these simple common courtesies are disappearing from the very vocabulary and experiences of the young adult and teenage populations among us. (In fact, only be an older person could write this piece from direct experience.)

What does any of this have to do with hats or e-commerce, you may ask. Stores are guilty - big time - of contributing to this decline. Businesses/employers run the daily social show in America; they are obliged to set an example and lead with integrity. This is a separate issue from Enron/WorldCom law-breaking type activity (although greed is not unrelated to this deterioration). Being polite and courteous are actions that people should adopt because it’s right to do so. That, in and of itself, is the reason to act as a decent human being. It is parenthetical that it is also good business to behave as such. This is not a confusing distinction, but likely has been confused, to the detriment of polite behavior, by “business consultants” focused on ends and outcomes rather than means and process. We all live together on the same planet for crying out loud. That is all the motivation we need.

How it got this bad is a topic for another essay. I suspect that the artificial and slippery notion that I often hear people espouse, “It’s just business”, thus implying a different behavior in “life” than in business is part of the explanation. In any case, businesses need to take responsibility. Many people aren’t given the courtesy of an answer after applying for, or even interviewing for, a job. We say hello or goodbye to colleagues and customers in the workplace less so all the time. It is not the fault of the younger generation that these basic human social values are being lost. My son, now twenty, has interviewed for numerous jobs in his young life. It is now significantly more likely that he will not be contacted after dropping off or emailing a resume - or even interviewing for a job - than he will be. It pains me to have to explain to him how rude that is. Worse, he is now used to it; doesn’t even get disturbed by it any longer. It is irrelevant that he has proven to be a very good employee, because a prospective employer owes anyone a response after he or she enters into their process for a job.

Those of us – business people or otherwise - who are dismayed by this decline cannot throw the towel in. We must not yield to this rude and impersonal cynicism that is spreading like a cancer on our social landscape. Our actions must be the antidote.

The Village Hat Shop will reply to your emails and greet you when you come into our stores. We will respond if you apply or interview for a job in our organization. Yes, it is good business for us to do these things, but that is not why we will do them. We will do them because we must.

Fred Belinsky is the founder and president of The Village Hat Shop. The 4-store California chain is 27 years old. http://www.VillageHatShop.com, launched in early 1997, was the first online hat seller. Belinsky also runs http://www.Berets.com Private label brands include Jaxon Hats for men’s hats, http://www.JaxonHats.com, and sur la tete for women hats. More of Belinsky’s articles can be seen at his HAT BLOG: Everything Hats. VillageHatShop.com also publishes THE COWBOY HAT, an ezine featuring short fiction, essays, and poetry about the American West and the Mexican-American Border.

For most people, the process of buying property requires great attention. It is often a huge investment – possibly the largest that an individual is likely to make; and they would want true value for the money invested. Coupled with the decision to liberalise the FDI norms in the construction sector, it comes as a surprise that the real estate sector continues to function unregulated without a consumer friendly legal framework, especially when mutual funds, insurance policies, fixed bank deposits and securities are all subject to the guidelines of a market regulator. Until now, only Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) were permitted to invest in the housing and the real estate sectors. Foreign investors other than NRIs were allowed to invest only in development of integrated townships and settlements either through a wholly owned subsidiary or through a joint venture company in India along with a local partner.

Though the real estate sector in India is proclaimed to be the most promising sector today, it is still hugely plagued by market uncertainties and inhibitions. The real estate market in India predominantly continues to remain unorganized, fairly fragmented, mostly characterized by small players with a local presence. Thus, a Rs 500 transaction has a regulatory structure in place, while a Rs 50,00,000 contract runs on trust or might. What makes the purchase process even more harrowing is the complete lack of professionalism. The sector is replete with builders and brokers who are not only ignorant of the law, but also about the ways of civil engineering. The Finance Ministry has also expressed concerns about the exponential growth in the highly unorganised sector, which is also supposed to be one of the most corrupt sectors of the economy.

In a bid to protect consumers, the urban development ministry plans to create a regulator for the real estate sector. A real estate commission will be set up to frame guidelines and a code of conduct for property dealers. This would mean that property dealers and architects would have to get themselves registered before doing business. These moves are all likely to be part of the proposed Real Estate Management Bill. However, keeping in view the strong opposition of a section of lobby of builders and property agents, it remains to be seen whether the government would be able to push forward the proposed Bill. There are proposals for self-regulation by the industry.

However, a section of builders have also supported the government’s move, as it would bring transparency in the industry and an assurance to the customers. Once confidence level improves, the quantum of foreign investment coming into the sector could rise substantially leading to growth in the sector. As per an estimate, the real estate sector is expected to get an investment of over $50 billion in next 5 years. Under the proposed Bill, neighbourhood property dealers will have to compulsorily seek licence from the proposed commission for practising in specific catchment areas. To further protect the interest of consumers, the commission will also entertain complaints against dealers and will be empowered to take punitive action. There are also plans for setting up an assistance window at the proposed commission, where prospective buyers will be able to thoroughly check the antecedents and other details of the property.

The same act is also expected to ban pre-launch offers – a method to take consumers for a ride in the housing sector. Realtors would take huge advances for proposed flats immediately after acquiring land even without the necessary clearances. In some cases, developers have even received advance money before the land was even transferred. More often than not, the developers have sunk the money in alternate projects. Once a project has been approved, builders will be barred from accepting any advances or deposits from buyers unless a sale agreement has been executed. The moves are expected to put an end to pre-launch bookings and publicity which jacks up property prices beyond prevailing market rates. This speculation severely disadvantages genuine buyers while aiding those out to make a quick buck. Apart from the ban on making these offers, the bill is also likely to mandate that the developer sign an agreement with the buyers, assuring them of delivery of the property within a stipulated period.

However, the draft of the proposed enactment reveals a few serious flaws. These mainly stem from India’s federal constitution which places property as a subject for state legislation. The fear is that the new statute will face the fate of the National Building Code, which is being ignored by states as much as possible.

I am working as a functional consultant with a Chennai based company in India called Ramco Systems. I have more than 3 years of experience in various fields of software development. To read more articles you can reach me at

Law Articles and Books

Building a Business is a hard job. There are so many small details that look easy that are the hardest parts of all. Then you have Prospective members who debate based on this and that: Example Pricing!

If you set your Price too HIGH it is said you are GREEDY and most likely a Rip-off. If you price to low they say it’s cheap so it is no good. One personal example I have of this is I was selling the

“The Total Resale Package”…I set it at $9.95 and got maybe 1 sale. At Christmas (or close too) I moved the price to $29 and sales zoomed. Same Programs, people’s perception. But let’s be realistic; if some one was going to sell a cheap quality Product…Car Salesmen do this all the time. They spit shine it, and slap a Price Tag on it knowing that it is pure crap when they are discussing the terms of sale with you. Now these guys are the ones to watch.

S.A.W. “Ewen Chia $.9.95” is a small price but I bought it and HONESTLY is one of the harder ones to sell; Peoples perceptions are out of whack somewhere. What happened to bargain? On Sale, Pre-Launch, Sale Price?

Another is “TheListFX” Keith Wellman, great program sales for $9.95, and I have trouble selling it too. Has it ever occurred to anyone that CHEAP IS THE WRONG ANSWER? That being nice, kind hearted, even pre-selling you to a bigger sale are most likely the RIGHT One? GRAB THESE BARGAINS, WHAT IS WRONG? Seriously, what is wrong?

2 days ago I was given a BFM Script for FREE, why? Because, no reason just out of the kindness of some ones heart. Nothing more and nothing less. I am like really happy about it…this is a $1497 Price Tag That I am actually getting FREE!. When you are at the Store do just by pass the sale items and say cheap? I did not think so, that was the reason you went there to start with wasn’t it?

So why “ASS-U-ME” A Low price, or Sale Coupon means CHEAP? When we Assume we make an “ASS” out of “U” and :ME” = Assume! So please think, don’t assume. That low price could be a Welcome message, a Thank You Message, definitely Not a CHEAP Message, remember the car salesman?

I am a Bargain Hunter and have located items worth much money that cost nothing as they were being tossed out. I have a set of Crystal, Paid Pennies on the Dollar, could sell and make a good deal on those but they are now a Family Keepsake.

High Prices…yes many are extreme, many carry the value and their weight in Gold and some just want to rip you off… See Getting an Education on every turn is a splendid idea, Save Money, Make Money and above all reduce mistakes on the very things we are speaking of here in this Article.

I hope I have helped someone as I do try, I enjoy helping others. If it were cars these people were selling, I‘d still ask questions as usually they have poor quality that they claim is in MINT Condition. Do be so quick to jump the gun, you go to places and see an item for sale what do you do? Purchase of course, especially of it’s a good deal. The net has good deals too. I would be more scared of theses $1 trials as they hope you will forget and they get paid than I would be a of a Huge Savings to a New site, or eBooks or Software Programs. Grab those Bargains, it is the Trials you want to worry about especially the ones you must pay by CC.

Best Regards,

Laurie Brandt

http://www.YourSuccessWealth.com

admin@YourSuccessWealth.com

Bio Box: Laurie Brandt Is a Women of today’s writings. Opinionated, Honest and to the point! Freestyle writing no certain subject criteria. However her work is in Developmental Educational Marketing. Teaching others the correct ways and too be Honest and to keep it clean. A Widow With 2 Kids and Disabled she refuses too let this hold her back and wants others to know that there is life after Disability. Highly Motivational and a real go getter.

Wednesday, April 11, 2007 http://www.YourSuccessWealth.com © 2007 All Rights Reserved! No Parts Of This Article May Be Used Without Laurie Brandt’s Written Permission!

A father / son team of convicted felons actually did this in the early 1990s. The Dominion of Melchizedek, a totally fictitious, sovereign nation was located on an uninhabited Stoll owned by the Republic of Marshall Islands in the Atlantic Ocean,, off the coast of Columbia, South America. President of this island nation was the son’s wife, who reportedly lived in California. It was purportedly a quasi-religious society governed by a “House of Elders.” It had a complete financial system with phony banks and stock exchanges. It sold citizenships, insurance and stock licenses. It sold diplomatic passports, religious grants, business licenses.. And, it had an embassy listing in Washington, D.C., Unbelievably, it was actually “recognized” by an African state. (One can only question what these officials were smoking at the time.) This mighty little nation even had the boldness to declare war on France for nuclear testing. (The mouse that roared?)

The sum of the Dominion’s activities ran amuck. Cataloged by John Shockey, former U.S. Comptroller of the Currency, these included: taking deposits, investment sums and fees, and issuing worthless “guarantees.” Also, making loan commitments, verifying and “authenticating” values of other Melchizedek entities which issued hundreds of millions of dollars in worthless debt instruments which were used to obtain real money loans and were exchanged in real brokerage houses for real value securities.

Amazing is the fact that–despite excellent, detailed exposure in articles run in Forbes, the Washington Post, and the Wall Street Journal as long ago as the early 1990s–this monumental scam is still up and running, more than 15 years later. The Dominion’s web site–www.melchizedek.com–was clickable as of press time of this News Release. Endless? Limitless fraud? On and on, into perpetuity? Where does it all end? Or, does it? one might ask.

Breakdown of the system in its ability to restrain giant scams seems to be the key to success for this con man’s dream. In his book, Six Hours Past Thursday (www.sixhrs.com), author, Jack Payne, goes one application better. “This nation-building exercise is entirely illegal,” says Payne. “It’s blatant, in-your-face, outright crime. From the opposite side of the fence my book tackles another broken system,” he goes on, “our cumbersome, snail-moving legal system. Converse to Melchizedek, this system is rife with opportunities for entirely socially acceptable, non-jailable ‘legal’ crime.” His novel weaves the story of how a Chicago mobster, with the aid of a con man, creates such an entity, a gambling island Mecca, ala Monte Carlo, off the coast of Florida.

“From fiction to reality! How close the gap?
Really! And, when you have no moral compass with which to navigate,” concludes Payne, “the sky is your only .limit.”

Jack Payne is the author of the legal thriller, Six Hours Past Thursday, a fictional book about real legal scams. For more information visit http://www.sixhrs.com

You’ve got some spare hours and want to earn some extra income. You get an offer to become an “Executive Assistant” in an aluminum siding company. You visit their representative, and look over their literature, handsome colored brochures which proclaim opportunity, opportunity, and more opportunity. But, nowhere are benefit packages mentioned, the usual, medical, vacation, sick leave, termination pay–nothing of this in writing. But, the rep speaks lavishly of these “benefits.” You are impressed, join the team, find you are only to collect commissions for selling aluminum siding, work a few weeks, get disgusted and quit.

When you go back to collect your pay, you are told that you were never an employee, but an independent contractor, and delay excuses are made for not having your limited earnings available yet. You wait. Next time you try to contact them, you find the tent has been pulled and the company is gone. This is a pattern that is practiced repeatedly, and with much success, by con men everywhere.

Why this pattern?

Because it enables them “cover,” a means by which they can hide behind an advantage to them, a differentiation problem that the politicians are too cowardly to solve.

Congress has punted on this due to the difficulty of precise language and because, generally, employers everywhere want to keep the language vague so as to give them more maneuvering room in taking on additional help. These companies assert lobbying pressure against precise language. Some states have laws, but mostly subject to interpretation all over the map. End result? You are caught in the middle.

Only the IRS has rules covering this debate, the exact nature of which are unknown, but as a general rule run something along this line:

To qualify for independent contractor status a company must not provide any tools to work with. Example: when you call a plumber to come fix your sink, he brings his own pipe wrench. You do not provide this for him. You can only supply merchandise which will be used up in the process of the job, e.g. tissues to wipe down the plumber’s tools while he is working. The company may not specify work hours. That must be left up to the independent contractor, like the plumber. No other form of guidance may be exercised. You, as the customer, have engaged the plumber to attain a desired result, a workable sink, that’s all. The means of getting this desired result must be left up to him. And, importantly, the independent contractor must not be provided work facilities on a regular basis. This is yet another separation criteria in determining, is this person an employee or an independent contractor? To top off: an independent contractor submits invoices for services (he works for others beside you). And, employees do not submit invoices.

So how do you protect yourself against these charlatans?

Ask them to write down the work “benefits” they offer, maybe because you wish to ponder them, and / or, talk them over with family and friends.

Have them clarify, in writing, the status of an “Executive Assistant” as opposed to Sales Representative.

Ask for a list of references from satisfied customers. Ask for bank references.

You won’t have to go much further than this. If these simple requests are filled for you, this opportunity might be worth further pursuit.

If not, well, you’ve saved yourself a lot of time, effort. And, needless frustration.

Jack Payne is the author of the legal thriller, Six Hours Past Thursday, a fictional book about real legal scams. For more information visit http://www.sixhrs.com

How to Resist the Con Artist Trying to make a “Yes Man” out of You through Mind Games.

The skilled con artist knows how to rig the game to make the players think they are winning. Every time you put a quarter into the slot machine, out come 2 more. In setting you up for the big con, this formula is altered a bit, to nothing more than ace-high salesmanship. They know they must get you in a good mood, very positive thinking, in every respect, in order to get you over to their side.

Thus, you are subjected to the preliminary “Yes / No” test. In it you are being set up, softened, conditioned to saying “yes” to that final (when it comes) “closing” question, “Would you sign here, please?” Their means? A long, introductory series of questions that you, in complete control of your mental faculties, can only say “yes” to. Examples: Would $2,000 a week in additional income be helpful to you? Would your wife appreciate the extra luxuries? Would it be easier to set up a fund for your children’s college education? Would holding a mortgage-burning party early make you happy? Would you breathe easier knowing that your retirement is secure?

Yes, yes, yes, yes, and yes–to all 5 questions. Of course. Is there any doubt, really, as to what your logical reactions to such questions would be?

Now the con artist has you in the habit. You are being led, inexorably, like a sheep, to the slaughter, toward the desired end-result, the “kill.” This would be your final head-nodding, agreeable acceptance of whatever crackpot scheme or product this
artist is trying to sell you.

How do you break the rhythm, keep a full handle on your conscious objectivity in reviewing his sales presentation? You almost have to play a little game on yourself, a form of self-hypnosis combined with some amusing musings on answers.
For example, mentally–as you go, as he is talking–pose to yourself a mythical “no” answering routine. To demonstrate how this might work, let’s go through those leading questions again:

“Would $2,000 a week in additional income be helpful to you?” (No, I enjoy being a struggling paycheck-to-paycheck working slob.)

“Would your wife appreciate the extra luxuries?” (No, she enjoys home canning, making her own clothes and soap, and all the other joys of care-free poverty.)

“Would it be easier to set up a fund for your children’s college education?” (No, I’d only have more time to blow the money, like I might be doing right here, now, by listening to you.)

“Would holding a mortgage-burning party early make you happy?” (No, I don’t want to incur any prepayment or other back-end costs. And, besides, my banker’s got to eat, too.)

“”Would you breathe easier knowing your retirement is secure?” (No, this whole concept challenges my Vow of Poverty.)

In sum, beware of stories with happy endings. Often they have unsettling postscripts. Thus, going through some such mental gymnastics–as you go through this person’s “Yes Man” routine–might a little better hold your feet to the fire, keep you focused on objective analysis. This, so you will be better positioned for the end-game: when you must ponder the only yes / no question that counts, whether on not to sign on the dotted line.

Jack Payne is the author of the legal thriller, Six Hours Past Thursday, a fictional book about real legal scams. For more information visit http://www.sixhrs.com

Does your State mortgage originator licensing regulations say you have a “Fiduciary Duty” to your customers? Or does it say “you must provide the consumer with a reasonable, tangible net benefit” from a loan you provide? Both of these may soon be nationally mandated requirements if Congress has anything to say about it.

The House of Representatives pulled no punches on Tuesday at its hearing on subprime and predatory mortgage lending as they took National Association of Mortgage Brokers President Harry Dinham to task on the subject of who brokers really work for, if they deny ‘fiduciary responsibility’ to their borrowers.

Although violating either of those standards may subject you to harsh discipline and potentially aggressive punishment, it is the presence of Ethics & Integrity which will carry you through a life long career in our fine industry.

I’m sure you’ve heard many times lately that it’s a short walk from unethical actions to full-blown fraud - but more importantly, are your actions ethical when it comes to serving a customer?

Here’s a couple of mental questions to ask yourself: If you have strong Ethics, do you understand it means how you behave when no one is watching? - because that’s exactly what it means! Do you RAT OUT a fellow loan provider when you see he/she isn’t acting ethically? Do you realize you ARE your brother’s keeper in this industry … what the ‘next guy’ does can make us all bleed! This last ‘cycle’ (1998 to 2007) brought us many long term problems (only now becoming apparent) - 99% of which be brought on ourselves … by going along with the crowd.

Article by Peter Samuel Cugno, Chairman & CEO of Secret! University, the educational division of Americas Money Center, Inc. with 40 years experience in the subprime industry niche. Questions or comments may be directed to Peter 310-833-4068 or online at: http://www.americasmoneycenter.com

There is a lot being written about these days regarding the “fall-out” in the mortgage industry, specifically in the subprime arena.

Quite a bit of commentary as to the effects and affects of the related markets. I think that the answer to the question “What happened?”
is a lot more simple than analysis of various economic indicators. Greed is what happened. That is the one word answer to which everything ultimately boils down.
However, I know that I need to qualify that broad brush stroke with some evidence and specifics.

I am sure that one could argue that there are a number of facets involved in the so-called, collapse of the subprime market. As a brief aside, the subprime market has not
in any way collapsed. However, there are several companies within the subprime arena that have indeed collapsed. At any rate, I think Paretto’s Principle applies here as it
so often does in most situations. The fact is that at least 80% of the problem had to do with Greed, Irresponsibility, Lack of Ethics and Integrity and lack of Education and Training.
What happened? Loan officers around the country knowingly put borrowers in harm’s way. Loan officers helped scheme and package so called “stated” loans where income verification was
waived allowing loan officers to inflate income on the application to keep the balance of debt to income (or DTI ratio as it is known in the business) within underwriting guidelines.

In plain English? Loan officers were involved in lying about how much money a borrower really made so they could be approved for a home loan. Reminder: A loan, that if the underwriters
actually knew what the income was….would decline the loan! Here is the real problem, by the way. It’s not the poor lender, who ultimately was lied to….it is the borrower, who with the help of or
at the advice of…got a loan that greatly exceeded their ability to repay. They were doomed the minute they signed the application.

In many cases the loan officer knew that there was no way that this borrower or this family would ever really “survive” the loan…but hey, the borrower wanted it….so they got it! So integrity and ethics were
sacrificed for the commission from a loan that likely will be the stranglehold that chokes the life out of the family’s finances. In some instances the loan officer just didn’t know any better. That simply
attests to the lack of training so many in our business get. Can you imagine? It is estimated that as many as 78% of all of the loan officers in the business today, has less than 3 years experience!

This is not so much a Subprime issue as it is a “Stated Loan” issue. Certainly, the fact that these borrowers credit suggested that they already struggled financially (and that…by the way is really what bad
credit means for most people….that at some point, or currently, they struggle to pay all the bills on time…or at all.) certainly adds fuel to the fire. But it is important to distinguish what the problem really
was or is in order to avoid making the same mistake again…but furthermore not to tarnish the subprime borrower or lender for the wrong reasons. The problem lays much less with FICO score for most of these defaulting loans than it does with generous DTI (debt to income) guidelines or low or “no-doc” income or asset documentation. Some of these loans allowed for the stated DTI to be as high as 60 or 65%. This means that even if the income on the application was legit…and was not inflated (as so many were)….that 65% of the GROSS INCOME was being devoted to the housing payment!! If the income was indeed inflated then many of these loans were extended to people that were likely carrying debt to income ratios more like 70-80%. You do not have to be a Certified Financial Planner to know that you cannot possibly dedicate three quarters of your GROSS income to just your mortgage.

The fact that seems to be forgotten somewhere along the line is that the reason that there is an application in the first place is not to say “yes” but rather to say “no” when someone
does not meet the guidelines that protect BOTH parties.

As experts it is responsibility of the loan officer to advise people what they can and cannot afford…NOT to simply be a conduit to approvals for debt hungry borrowers.
Loan officers that can see the forest through the trees recognize that by helping their clients stay solvent in the long run they keep a client for life. For if they ultimately lose their home, they are of no use to that loan officer anymore.

The mortgage industry presents one of the most wonderful opportunities in the professional world today: An opportunity to serve, to help and to profit.
For those who forgot about the first two, shall know what it is like to do without the third.

Born in Montreal Canada, raised in New Jersey and a graduate of Rutgers University, Stefan Lubinski is a nationally known trainer, speaker and consultant in the residential mortgage industry.

Prior to becoming a Professional Speaker Stefan’s diverse professional background included: Restaurant Management, Executive Recruiting, Corporate Sales & Marketing and Residential Real Estate Finance.

His unique combination of humor, “hands-on” industry knowledge, and ability to make complex ideas simple to understand put him in a class of his own!

Stefan is a proud member of the National Association of Mortgage Brokers, the Association of Coaching and Consulting Professionals on the Web, and The National Speakers Association. He is also a certified Mortgage Planning Specialist.

Stefan lives with his wife Shelley and his son Carter (his four dogs and one horse) in Pleasanton, California. Although, most of the time, you will find him in the training rooms of some of the best companies across the country.

http://www.stefanlubinski.com

Nobody likes to be misled, especially by people they trust or have an expectation will do the right thing, whatever that is. Fraud and corruption can be a blow to the self-image of capable managers and their confidence in their ability to deter or detect a fraudulent scheme. More so, they can have a negative impact on an organisation’s brand, image and reputation, organisational morale and where the loss is large – significantly impact the bottom line.

In a recent survey of fraud in Australian organisations, 84 percent of respondents agreed or strongly agreed with the proposition that fraud control is a governance issue.

In Fiji, it is even more important, because the whole fabric of society is affected by the level of fraud and particularly corruption that exists. The World Bank on their website states that:
“The Bank has identified corruption as among the greatest obstacles to economic and social development. It undermines development by distorting the rule of law and weakening the institutional foundation on which economic growth depends. The harmful effects of corruption are especially severe on the poor, who are hardest hit by economic decline, are most reliant on the provision of public services, and are least capable of paying the extra costs associated with bribery, fraud, and the misappropriation of economic privileges.”

A recent case in South Africa proved the fraudulent and corrupt relationship between a Durban-based businessman named Schabir Shaik and South African politician and anti-apartheid leader Jacob Zuma and led to Shaik being sentenced to 15 years in jail. Concluding the sentencing proceedings in the Durban High Court on 7 June 2005, Judge Hillary Squires said:

“I do not think I am overstating anything when I say that this phenomenon [of corruption] can truly be likened to a cancer eating away remorselessly at the fabric of corporate privacy and extending its baleful effect into all aspects of administrative functions, whether state official or private sector manager. If it is not checked, it becomes systemic. And the after-effects of systemic corruption can quite readily extend to the corrosion of any confidence in the integrity of anyone who has a duty to discharge, especially a duty to discharge to the public.

One can hopefully discount the prospect of it happening in this country, but it is that sort of increasing disaffection which leads and has led on other parts of our continent and elsewhere to coups d’état or the rise of populace leaders who in turn manipulate politics for even greater private benefit … This is the last step in a thousand mile journey.”

The former Prime Minister of Fiji, the Honourable Laisenia Qarase, in his address to the Prime Minister’s Corporate Governance Summit in 2005 stated that:

“There is no quarrel about dealing with corruption as it is an obstacle to progress and the antitheses of good governance.

It is a stain on the integrity of a nation. And it hinders investment, slows growth, contributes to unemployment, leads to a reduction in living standards and reduces government revenues.

In our own case, the exact extent of it is hard to quantify because by its nature it is a shadowy and hidden thing, but reported investigations that are on-going and case before the courts indicate the urgent need for vigilance against corruption.”

What is the level of fraud and corruption in Fiji? Transparency International Chairman, Hari Pal Singh, made a good point when he called for a national study to gauge the extent of corruption in Fiji.

Having been involved in coordinating the KPMG fraud surveys of Australia and New Zealand whilst working for KPMG Forensic, I can say confidently that they are a good starting point for discussion, as long as the survey is done independently by someone who has built trust and can be relied onto protect the confidential information that should be provided as part of such a survey.

In other words, no individual organisation should be named and shamed. That should not be the purpose of the exercise. If senior management of corporations and CEO’s of Government Departments and Statutory Authorities do not have that confidence, they will not respond. It is that simple. Then the value of the survey would be diminished. I believe that such a survey should be done regularly in Fiji, possibly every two years and cover as many organisations as possible. The support and encouragement of leading industry bodies such as the Fiji Institute of Accountants, the Fiji Employers Federation and the Fiji Islands Hotel and Tourism Association would certainly help with gaining credibility with members and encouraging their participation.

Corporate governance is an entire culture that sets and monitors behavioural expectations intended to deter the fraudster and the corrupt. As part of the establishment of sound corporate governance, it is now clearly accepted that an organisation, whether public, private or not for profit, should formulate a fraud and corruption control strategy. Through the development and implementation of the strategy, compliance with anti-fraud and corruption control practices can be promoted, maintained and instances of fraud and corruption control non-conformance identified and dealt with quickly.

This article will discuss ways that all three sectors in Fiji can effect positive change. Whether it is to their bottom line, expenditure on public goods or positive outcomes for the disadvantaged

What is a fraud and corruption control strategy?

It is a comprehensive summary of key elements that the organisation has introduced to prevent, identify, manage, investigate and deal with fraud and corruption specific to its own circumstances. According to the Australian Standard AS8001-2003 , although an organisation’s approach to its strategy will be dependent upon its size, diversity, geographical spread and the industry in which it operates, the Standard recommends that a strategy contain a number of elements. Several of these elements are discussed below:

- Fraud and corruption awareness – How does the organisation educate their staff and stakeholders about how fraud and corruption occurs and what to do if it is discovered ? This is a key element as fraud surveys have clearly demonstrated over time that the majority of frauds are discovered by staff and that whistleblowers are also an important source of information. Most staff are naïve to fraud and corruption. This helps in creating an environment for the dishonest to flourish.

- Reporting of fraud and corruption – Is there a formal reporting process ? Does senior management and the Audit and Risk Management Committee get told of all incidences ? If all instances are not recorded centrally, how does management assess the size and breadth of the problem and effectively manage it? Also importantly, if the instances of fraud and corruption are not reported to the Audit and Risk Management Committee, how do they monitor the performance of senior management in managing the risk ? There must be a central repository of all theft, fraud and corruption and it must be reported up.

- Fraud and corruption risk assessment - Identifying a couple of fraud risks in your business risk assessment or enterprise risk management process is far from adequate. An organisation should not rely on management alone to come up with all potential risks as there may be a knowledge gap, a reluctance to identify the existing weaknesses, inadequate allocation of time to discuss the issues or lack of a persistent inquisitor to ask the tough questions and follow up. So, consider having someone involved who thinks like a fraudster and has experienced a broad range of fraud and corruption issues who can add real value to the process. The insights regarding risks and process weaknesses can be invaluable.

- Whistleblowing – How does your organisation protect whistleblowers? Does it encourage anonymous reporting? Whistleblower programs allow employees and others to report concerns – including those about corporate fraud and corruption – and can allow the management and/or the Board to take early corrective action. Whistleblowing lines are very prominent in the public sector in Australia and now are becoming more prominent in the private sector. This may not suit the culture of Fiji, however it is important to recognise that honest staff who see something that they do not agree with, have to be given an outlet to voice their concerns. Sometimes that needs to be anonymously. I agree with Professor Ron Duncan of the University of the South Pacific who believes Fiji needs a Whistleblowers Act if good governance is to be effectively practiced. Professor Duncan was quoted as saying:

“Given the secretive nature of the offence, the protection of those who bring acts of corruption to the notice of law enforcement agencies cannot be emphasized enough. More so, in a small society such as ours with its pervasive culture of silence”

- Pre-employment screening - Is there a consistent process of screening across the organisation ? How thoroughly are background checks, such as prior employment history, tertiary qualifications and memberships of professional associations, conducted ? Does it cover only full-time employees or include contractors ? This is an area of concern in Fiji because the quality of the recruiting when outsourced has been inconsistent. I personally know of several cases where a recruitment company knew that a candidate was dismissed from his last employment for fraud and yet they put the candidate forward immediately for another accounting role, without either the recruiting firm or the candidate disclosing what happened.

- Regular reviews of internal controls - Effective internal controls cannot be both successful and static. They should be monitored and evaluated for improvements and changes made necessary by changing conditions. The scope and frequency of evaluations of the internal control structure depend on risk assessments and the overall perceived effectiveness of internal controls. As an example, under the Sarbanes-Oxley requirements, management is charged with performing an evaluation at least annually. Anti–money-laundering procedures employed by financial institutions are a good example of a proactive process designed to deter fraudulent transactions from taking place through a financial institution. I know that KPMG, one of the Big 4 firms in Fiji, has been using a very detailed and focused Forensic style approach on special internal audits, with considerable success. To catch a thief, you sometimes have to think like a thief !

Commonwealth Agencies in Australia have clearly led the private sector in developing fraud and corruption control strategies. This is mainly because it is mandated under the Financial Management and Accountability Act 1997 that all budget-funded agencies, and relevant Commonwealth Authorities and Companies Act 1997 funded bodies, put in place practices and procedures for effective fraud control. The Commonwealth Fraud Control Guidelines, outlines how each Agency must have a fraud control plan. The private sector as yet is slow to follow suit.

To my knowledge few, if any, public or private sector organisations in Fiji have a detailed fraud and corruption control strategy. If so, I would be keen to know about them.

What are the main trends and issues that organisations should be aware of in Fiji ?

Having spent quite some time in Fiji over the past three years investigating fraud and corruption, as well as discussing and implementing prevention strategies, I can say that there are areas of general concern to all organisations. I will discuss a number of these below:

Purchasing

Procurement is a high risk area. The risks include, but are not limited to:

- Purchasing from one-off suppliers or suppliers who appear to be resellers rather than manufacturers or the main distributors, often at inflated prices involving a kickback to an employee.
- Collusion between staff and suppliers that results the organisation paying for the non-delivery of goods. In one case alone I was told of, equipment purchased for $25,000 was delivered and taken straight back out the gate, yet it was signed for and the invoice paid. It is understood a $5,000 corrupt commission was paid to facilitate the transaction.
- Forgery of local purchase orders that allows significant payments to be made to suppliers and contractors.
- Leaking of tender prices by staff to a competing tenderer in order to give them an advantage. This is usually done for a secret commission.

Revenue Assurance

In particular, the greatest risk is the theft of cash from sales. Cash is ‘king’ and controls over its receipt, storage, banking and reconciliation are sometimes very poor. Organisations must review their processes in a step by step manner, highlight where there may be opportunities for the cash to be removed and implement changes.

I have observed the failure to adequately reconcile sales invoices and receipts with the banking of cash as one of the worst controlled processes in organisations in Fiji.

Payroll

The ‘ghosting’ of employees continues to be a concern. I know of more than four instances alone in Fiji in recent years involving hundreds of thousands of dollars where sometimes a single employee has been allowed to introduce ghosts onto the payroll and get away with for years.

Organisations should get a detailed payroll review undertaken now from someone who is experienced at identifying the warning signs of ghosting. They may be surprised at what they find !

Stock theft

This is very common in Fiji. Employees of organisations remove stock from the premises in collusion with transport drivers, suppliers and security. The stock is sold for cash at a greatly reduced price compared to its face value. The effect is that it increases the purchases made by the organisation in order to replace the stolen stock, that management believe has been used in the normal course of business.

Organisations are particularly vulnerable at night, when there are less employees on site and the security is not as tight.

I worked on one matter a couple of years ago in the West, where welding rods were being blatantly stolen by employees and sold to local businesses in Raki Raki and Ba. The welding rods had stickers on them to prove that they were sold to one particular organisation by a leading supplier of welding rods in Fiji. Yet they were mysteriously appearing in a range of businesses and being used by their employees. This type of systematic stock theft can only happen with the collusion of the employees.

Theft of diesel and petrol has become a high risk in recent times with the explosion in the price of crude. How have organisations in Fiji reassessed their controls over these assets ?

In order to reduce the opportunity for stock theft to occur, security on the gates must be independent, well trained and their integrity and competence tested on a regular basis. Organisations should consider having an independent security review performed by a reputable contractor/consultant.

What are the emerging trends that are likely to impact organisations in Fiji now and in the near future?

Patterns of behaviour are clearly emerging as both the cost and complexity of technology decreases and information is shared through the internet in real time. Although more traditional frauds continue to be perpetrated against organisations, there are also a number of new or increasingly prominent challenges. Some of these challenges include:

- Identity fraud and theft - Criminal syndicates follow the money and as such identity fraud and theft is fast becoming a significant problem as they target individuals and organisations. The quality of recent forgeries of identification documents such as driver’s licences, birth certificates and even passports has highlighted the need for biometric identification solutions such as fingerprints, voice patterns, retinal images, facial or hand geometry to be seriously considered by organisations. This has potential to be a real problem for the major banks in Fiji, Inland Revenue and Customs as well as the Fiji National Provident Fund.

- Cyber-crime – The role of ‘phishing’ and the use of ‘trojans’ to illegally penetrate computers to obtain confidential information, including banking details, shows no signs of abating. As an example, over 11,000 unique phishing attack websites were reported to the Anti-Phishing Working Group in May 2006. . As the internet penetrates Fiji to a greater extent in the next couple of years, so to will the extent of this type of fraud. Individual users and organisations must learn to protect themselves.

- Cheque fraud – this continues to be one of Australia’s most prevalent frauds affecting businesses and it is prevalent in Fiji. An example of this type of fraud was the recent case involving the altering of a Bank of Baroda cheque from $19.38 to $19,000.38. It involves the alteration of an existing cheque to a new payee and sometimes an altered amount. Some of the greatest exposure in Fiji besides the banks, would be supermarkets and other stores that cash people’s cheques for them. They should seriously consider their exposure if the cheque they are cashing has been altered!

What can your organisation do?

Senior management tasked with governance responsibilities should undertake a review of their approach to fraud and corruption control. It is recommended that they at least benchmark your organisation against best practice recommended by the Australian Standard AS8001-2003 – ‘Fraud and Corruption Control’ in order to determine gaps that require addressing. This will be the blue print for going forward.

Key areas of the fraud and corruption control strategy that should be emphasised and undertaken should include:
- championing a pro-active and thorough approach to fraud risk management across the organisation;
- reviewing the organisation’s whistleblowing policy and procedures and where one does not exist, seriously consider the inclusion of an anonymous reporting line to augment the reporting structure;

- educating staff about fraud and corruption, how it is detected and importantly the organisation’s reporting procedures; and
- investigating thoroughly all allegations of fraud and corruption and taking decisive action where there is proven evidence of it occurring. Consider zero tolerance !

Conclusion

Emerging technological trends, the globalisation of commerce as well as the growing impact of the prevalence of gambling should be of concern to Board members and senior management in all organisations in Fiji, both large and small. They all create risks that need to be constantly managed.

Those who commit fraud and corruption, whether internal or external to the organisation, are often attuned to system and control weaknesses and therefore target least points of resistance.

To deal with these fraud and corruption risks, organisations must look to how they are allocating their resources and seriously consider the need for a comprehensive strategy. It is time to allocate part of the budget to fraud and corruption prevention in order to positively impact your organisation’s achievements.

Case Study - Whistleblowing

Fraud awareness training was provided to all staff in a division. Subsequent to this training, the Financial Controller was sent an e-mail with the sender’s details disguised although indicating that they had attended one of the fraud awareness sessions. The e-mail contained detailed allegations concerning anomalies with a senior manager’s use of a company credit card.

A preliminary review was undertaken of the credit card statements that revealed personal purchases of clothes, meals, accommodation, dating services and books over an eighteen-month period that were all fraudulently misrepresented on the card statements as business related expenses. Although the card statements were countersigned by another manager, the manager later admitted trusting the senior manager’s explanations for the purchases.

The senior manager was in a key governance position within the organisation and was subsequently dismissed.

Case Study – False invoicing

A Finance Director with responsibility for the Asia-Pacific region travelled regularly. An anomaly with his expenses led to a further investigation of his activities. A link was identified between the name of an Australian based company of which he was a Director and a company based in Malaysia that had received consulting fees authorised by the Finance Director.

Further investigation revealed four companies in different Asian countries that had received consulting fees based on bogus projects. As a result of the investigation, it was proven that more than 50 invoices were prepared and subsequently signed off by the Finance Director at an Australian Dollar equivalent just below his delegation limit.

International company searches revealed he was a Director and Shareholder in each company. Over AUD2 million was recovered.

It was also revealed that the annual budget for such consulting expenses was $300,000 when the Finance Director joined. In the first year, he increased the budget to $1.8 million. He therefore budgeted for his own fraud.

Brett Warfield can be contacted on (612) 9231 7588 or at brett@warfield.com.au.

Warfield & Associates websire is http://www.warfield.com.au. Brett is a regular visitor to Fiji and consults to public and private companies and government authorities and departments on fraud and corruption prevention, detection and investigation.

Brett has significant experience in investigating fraud and other unethical conduct, financial profiling, asset and funds tracing and preparing financial briefs of evidence. He is an experienced presenter on fraud control and has presented to CEOs, senior executives, industry and professional bodies in Australia and Asia.

Brett established Warfield & Associates, a professional services firm specialising in Forensic Accounting and Fraud an, in 2004 with the aim of providing independent advice to organisations to assist them with addressing unethical behaviour, improving governance and identifying risks.

Brett has been a senior member of the national Forensic practice at KPMG Australia. He worked with some of Australia’s largest and best-known companies as well as Government bodies.

He had eight years fraud and corruption prevention and investigative experience as a financial investigator with two Royal Commissions of Inquiry, a prosecution Task Force and the NSW Independent Commission Against Corruption.

Prior to that, Brett had ten years experience with BHP Co Ltd

Nobody likes to be misled, especially by people they trust or have an expectation will do the right thing, whatever that is. Fraud and corruption can be a blow to the self-image of capable managers and their confidence in their ability to deter or detect a fraudulent scheme. More so, they can have a negative impact on an organisation’s brand, image and reputation, organisational morale and where the loss is large – significantly impact the bottom line.

In a recent survey of fraud in Australian organisations, 84 percent of respondents agreed or strongly agreed with the proposition that fraud control is a governance issue.

Corporate governance is an entire culture that sets and monitors behavioural expectations intended to deter the fraudster. As part of the establishment of sound corporate governance, it is now clearly accepted that an organisation should formulate a fraud and corruption control strategy. Through the development and implementation of the strategy, compliance with anti-fraud and corruption control practices can be promoted, maintained and instances of fraud and corruption control non-conformance identified and dealt with quickly.

What is a fraud and corruption control strategy?

It is a comprehensive summary of key elements that the organisation has introduced to prevent, identify, manage, investigate and deal with fraud and corruption specific to its own circumstances. According to the Australian Standard AS8001-2003 , although an organisation’s approach to its strategy will be dependent upon its size, diversity, geographical spread and the industry in which it operates, the Standard recommends that a strategy contain a number of elements. Several of these elements are discussed below:

- Fraud and corruption awareness – How does the organisation educate their staff and stakeholders about how fraud and corruption occurs and what to do if it is discovered? This is a key element as fraud surveys have clearly demonstrated over time that the majority of frauds are discovered by staff and that whistleblowers are also an important source of information.

- Reporting of fraud and corruption – Is there a formal reporting process? Does senior management and the Audit and Risk Management Committee get told of all incidences ? If all instances are not recorded centrally, how does management assess the size and breadth of the problem and effectively manage it ? Also importantly, if the instances if fraud and corruption are not reported to the Audit and Risk Management Committee, how do they monitor the performance of senior management in managing the risk?

- Fraud and corruption risk assessment - Identifying a couple of fraud risks in your business risk assessment or enterprise risk management process is far from adequate. An organisation should not rely on management alone to come up with all potential risks as there may be a knowledge gap, a reluctance to identify the existing weaknesses, inadequate allocation of time to discuss the issues or lack of a persistent inquisitor to ask the tough questions and follow up. So, consider having someone involved who thinks like a fraudster and has experienced a broad range of fraud and corruption issues who can add real value to the process. The insights regarding risks and process weaknesses can be invaluable.

- Whistleblowing – How does your organisation protect whistleblowers? Does it encourage anonymous reporting ? Whistleblower programs allow employees and others to report concerns–including those about corporate fraud–and can allow the management and/or the Board to take early corrective action. Whistleblowing lines are now becoming more prominent in the private sector.

- Pre-employment screening - Is there a consistent process of screening across the organisation ? How thoroughly are background checks, such as prior employment history, tertiary qualifications and memberships of professional associations, conducted ? Does it cover only full-time employees or include contractors ?

- Regular reviews of internal controls - Effective internal controls cannot be both successful and static. They should be monitored and evaluated for improvements and changes made necessary by changing conditions. The scope and frequency of evaluations of the internal control structure depend on risk assessments and the overall perceived effectiveness of internal controls. As an example, under the Sarbanes-Oxley requirements, management is charged with performing an evaluation at least annually. Anti–money-laundering procedures employed by financial institutions are a good example of a proactive process designed to deter fraudulent transactions from taking place through a financial institution.

Commonwealth Agencies have clearly led the private sector in developing fraud and corruption control strategies. This is mainly because it is mandated under the Financial Management and Accountability Act 1997 that all budget-funded agencies, and relevant Commonwealth Authorities and Companies Act 1997 funded bodies, put in place practices and procedures for effective fraud control. The Commonwealth Fraud Control Guidelines, outlines how each Agency must have a fraud control plan.

What are the trends and issues that organisations should be aware of?

Patterns of behaviour are clearly emerging as both the cost and complexity of technology decreases and information is shared through the internet in real time. Although more traditional frauds continue to be perpetrated against organisations, there are also a number of new or increasingly prominent challenges. Some of these challenges include:

- Identity fraud and theft - Criminal syndicates follow the money and as such identity fraud and theft is fast becoming a significant problem as they target individuals and organisations. The quality of recent forgeries of identification documents such as driver’s licences, birth certificates and even passports has highlighted the need for biometric identification solutions such as fingerprints, voice patterns, retinal images, facial or hand geometry to be seriously considered by organisations.

- Cyber-crime – The role of ‘phishing’ and the use of ‘trojans’ to illegally penetrate computers to obtain confidential information, including banking details, shows no signs of abating. As an example, over 11,000 unique phishing attack websites were reported to the Anti-Phishing Working Group in May 2006.

- Cheque fraud – this continues to be one of Australia’s most prevalent frauds affecting businesses. It involves the alteration of an existing cheque to a new payee and sometimes an altered amount.

- Gambling – There is an inextricable link between gambling addiction and fraud. As the opportunity to participate in various forms of gambling grows, the incidence of fraud will also continue to grow. Refer to the breakout box for some recent Australian examples.

What can your organisation do ?

Senior management tasked with governance responsibilities should undertake a review of their approach to fraud and corruption control. It is recommended that they at least benchmark your organisation against best practice recommended by the Australian Standard AS8001-2003 – ‘Fraud and Corruption Control’ in order to determine gaps that require addressing. This will be the blue print for going forward.

Key areas of the fraud and corruption control strategy that should be emphasised and undertaken should include:
- championing a pro-active and thorough approach to fraud risk management across the organisation;
- reviewing the organisation’s whistleblowing policy and procedures and where one does not exist, seriously consider the inclusion of an anonymous reporting line to augment the reporting structure; and
- educating staff about fraud, how it is detected and importantly the organisation’s reporting procedures.

Conclusion

Emerging technological trends, the globalisation of commerce as well as the growing impact of the prevalence of gambling should be of concern to Board members and senior management in all organisations, both large and small. They all create risks that need to be constantly managed.

Those who commit fraud and corruption, whether internal or external to the organisation, are often attuned to system and control weaknesses and therefore target least points of resistance.

To deal with these fraud and corruption risks, organisations must look to how they are allocating their resources and seriously consider the need for a comprehensive strategy.

Case Study - Whistleblowing

Fraud awareness training was provided to all staff in a division. Subsequent to this training, the Financial Controller was sent an e-mail with the sender’s details disguised although indicating that they had attended one of the fraud awareness sessions. The e-mail contained detailed allegations concerning anomalies with a senior manager’s use of a company credit card.

A preliminary review was undertaken of the credit card statements that revealed personal purchases of clothes, meals, accommodation, dating services and books over an eighteen-month period that were all fraudulently misrepresented on the card statements as business related expenses. Although the card statements were countersigned by another manager, the manager later admitted trusting the senior manager’s explanations for the purchases.

The senior manager was in a key governance position within the organisation and was subsequently dismissed.

Case Study – False invoicing

A Finance Director with responsibility for the Asia-Pacific region travelled regularly. An anomaly with his expenses led to a further investigation of his activities. A link was identified between the name of an Australian based company of which he was a Director and a company based in Malaysia that had received consulting fees authorised by the Finance Director.

Further investigation revealed four companies in different Asian countries that had received consulting fees based on bogus projects. As a result of the investigation, it was proven that more than 50 invoices were prepared and subsequently signed off by the Finance Director at an Australian Dollar equivalent just below his delegation limit.

International company searches revealed he was a Director and Shareholder in each company. Over AUD2 million was recovered.

It was also revealed that the annual budget for such consulting expenses was $300,000 when the Finance Director joined. In the first year, he increased the budget to $1.8 million. He therefore budgeted for his own fraud.

Examples - Gambling motivated fraud

$7.1 million - Accountant defrauded clients’ trust funds. Spent 937 days out of 7 years gambling at the Crown Casino.
$4.3 million - Claims officer reopened claims files and made out 1,003 cheques to fictitious 3rd parties over a period of 10 years. Most of the money was lost through gambling.
$8.3 million - Merchant Banker in an investment bank wrote out 76 cheques in erasable ink over four years, altering payee to own benefit used to gamble.
$17 million - Bank Manager by unauthorised EFT’s. Racehorses.
$4.57 million - Financial Adviser.
$22 million - General Manager of a Transport company. Unauthorised EFT’s. Racehorses.
$1.5 million - Two Managers of a Credit Union. Poker machines.
$254,000 - Financial Controller of a Hotel. Roulette.
$44,000 - Carer of people with a disability. Poker machines.

Brett Warfield can be contacted on (612) 9231 7588 or at brett@warfield.com.au.

Brett has significant experience in investigating fraud and other unethical conduct, financial profiling, asset and funds tracing and preparing financial briefs of evidence. He is an experienced presenter on fraud control and has presented to CEOs, senior executives, industry and professional bodies in Australia and Asia.

Brett established Warfield & Associates, a professional services firm specialising in Forensic Accounting and Fraud an, in 2004 with the aim of providing independent advice to organisations to assist them with addressing unethical behaviour, improving governance and identifying risks.

Brett has been a senior member of the national Forensic practice at KPMG Australia. He worked with some of Australia’s largest and best-known companies as well as Government bodies.

He had eight years fraud and corruption prevention and investigative experience as a financial investigator with two Royal Commissions of Inquiry, a prosecution Task Force and the NSW Independent Commission Against Corruption.

Prior to that, Brett had ten years experience with BHP Co Ltd