An Endless Stream of Lies (10 page)

But, once again, how did this transition happen? Based upon an external force, in this case heat, water can change from a solid to a liquid to a gas. We continue to wonder, how does a young man in such a short period of time go from “studiously tending to the work of the chapter” to methodically stealing and deceiving—diverting the accumulated resources of over a hundred lifetimes? Surely, it can’t be what he decided upon while someone was “informing the students of career opportunities in accounting and finance.”

Was there a fatal crossroad at which point Alex made a fraudulent turn? Perhaps the fraudster resided in Alex all along, patiently waiting for the precise set of circumstances to be released. Like a virus, patiently biding its time until something happens within the body—a trauma, a fever, a sudden stressor—allowing the virus to spring forth and take over.

NARCISSUS

In Greek mythology, Narcissus was a hunter. He was known for his exceptionally attractive appearance. He was just as exceptionally prideful and scornful of those who loved him. One day, he looked into a pool and fell in love with his own image. He did not realize it was simply a reflection. His love was so strong for his mirror image, he could not bear to leave, even just long enough to eat. He subsequently wasted away. This was divine retribution for his pride (Wikipedia). From this mythological illustration, we derive the concept of the “narcissistic personality.” Narcissistic personality is defined as:

“Extremely selfish and self-centered, people with a narcissistic personality have a grandiose view of their uniqueness, achievements, and talents and an insatiable craving for admiration and approval from others. They are arrogant, exploitative to achieve their own goals and expect much more from others than they themselves are willing to give.” (
http://www.webref.org/psychology/n/narcissistic_personality.htm
)

A primary characteristic of a narcissistic personality is a strong sense of entitlement. This instance is not an entitlement, as in a legal sense of the meaning, but rather a self-imposed sense of entitlement. It is meant as a pejorative term.

At what point did Alex come to believe that he was entitled to that which belonged to others? Alex did not gaze into a pool of water and fall in love with his own reflection. Rather, he gazed into a large pool of money and fell into a sense of entitlement. He became enamored with what he
could take
and subsequently
did take
. Just as Narcissus could not tear himself away from the sight of his own reflection, Alex could not tear himself away from the sight of all that money.

As diverse as these two examples may seem at first, in the final analysis, each individual was focusing on what mattered most—himself. To Narcissus, no one was worthy enough to love him, or to receive love from him, but himself. To Alex, no one was worthy enough to have the assets that he took but himself. After all, he hoped to get himself “back on his feet at some point,” with the resources of others that he had kept for himself.

We have learned, to this point, that for a number of years, Alex, while consistently losing money as a result of his stock trading—and well before he made his partner aware of the losses—was continuing to “withdraw large management fees” (34). At the same time, the partners were bringing forth company after company, layer upon layer, falsifying tax returns and selling additional people on the idea of trusting them with their money.

Another dynamic of the narcissistic personality is a lack of remorse—the inability to feel a negative emotion as a result of a wrongful action toward another.

Our analysis of Alex’s voyage into the abyss can accommodate a variety of lenses—societal, the family unit, shifting mores, lost values and the combination thereof. But at the end of the day, the fraudulent voyage took place while other similar voyages are taking place at an increasing rate and, short of a cataclysmic event, will continue to do so.

Rather than quoting the data on the billions of dollars diverted by fraud each year, let’s examine the efforts undertaken to keep us from becoming a victim of fraud. We purchase identity theft protection from companies, such as LifeLock, to enhance our security. Companies conduct background checks on prospective hires. There are mandated internal and external audits for publically held companies. A web search under “fraud protection” produces over 20,800,000 related sites. Cities, counties, state and federal law enforcement agencies employ hundreds of thousands of investigators and auditors in the fight against fraud. The private sector employs still more. The Certified Fraud Examiners Association—the premier fraud-fighting entity—has chapters throughout the world, all comprised of professionals united in the fight against fraud.

As I tell those participating in my fraud-related interviewing classes, “Whatever is wrong in society, is represented by some of those sitting across from you during your interviews.”

Alex sat across from a great deal of different people—clients, a co-conspirator, representatives of the Federal Bureau of Investigation, as well as federal prosecutors. Through it all, time and time again, Alex manipulated things—reports, documents, funds—and he manipulated people . . . a lot of people. He deceived, when it would have seemingly been in his best interest to tell the truth.

Another example of Alex’s manipulation of things came forth in his testimony at the trial. This element involved a home loan application. We read the following:

Q. Directing your attention to November of 2005, are you aware of a home loan application for refinancing that Mr. Noel applied for?

A. Yes, I am.

Q. Did you have any involvement in that?

A. Yes, I did have some involvement with that.

Q. Did you ever see the loan application itself?

A. I did not see the loan application itself.

Q. What was your involvement?

A. My involvement was in preparing some documentation that Bryan said he needed to present to the mortgage company.

Q. What kind of documentation was that?

A. That type of documentation would include articles of organization and incorporation for CEP, and some type of letter stating that Bryan was the 100 percent owner, as well as something with a client account statement.

Q. Let me show you Government Exhibit 45J, specifically the second page, and ask you if you recognize that.

A. Yes, I do.

Q. What is that?

A. That is a client account statement for Bryan as of October 4th, 2005.

Q. And did you prepare it?

A. Yes, I did.

Q. At whose request?

A. At Bryan Noel’s.

Q. Was it truthful?

A. As I recall, this is not a correct statement.

Q. And what was the purpose in preparing this?

A. The purpose was to show more assets in Pinnacle than what was really there at that point.

Q. For who to show more assets?

A. For Bryan to show more assets.

Q. Now, in the same time frame, November of 2005, did you have any discussions with Mr. Noel about Titan trading accounts?

A. Yes, we did, during that time.

Q. And when I say “Titan trading accounts,” I mean distinct from the Pinnacle trading accounts.

A. Correct.

Q. Will you tell the jury about that?

A. Bryan was working on obtaining financing from Carolina First Bank which would be somewhere in the neighborhood of a million dollars, and his plan was to trade some of those funds via accounts that would be set up in Titan’s name so that some of the gains that could be made off of those funds could be used to repay part of what Pinnacle’s loan balance to Titan was.

Q. So you said in November of ‘05 that there was an application to what bank for a loan?

A. To Carolina First.

Q. And what — who was applying for that loan?

A. That would have been Titan Composites.

Q. And what was going to be done with those loan funds?

A. Those loan funds would eventually be used for purposes of equipment, operating expenses necessary for the business, but they would be traded in the interim.

Q. They would be traded. When you say “traded,” what do you mean?

A. Traded in the stock market.

Q. And that was discussed when?

A. That was discussed as early as October, November of 2005.

Q. Did you take some steps to get ready for the receipt of those funds in the trading account?

A. Yes, I did.

Q. What steps did you take?

A. I opened brokerage accounts with two different brokers, AmeriTrade and Fidelity Investments.

Q. Was that your decision?

A. That was a decision that was made in conjunction with Bryan Noel.

Q. Let me show you Exhibit 45L and ask if you recognize it.

A. Yes, I do.

Q. What is that?

A. That is an account setup statement for Fidelity Investments. Well, for Titan Composites. I believe that’s for Fidelity Investments.

Q. And who prepared that document?

A. That was prepared by me.

Q. Whose handwriting is on that?

A. That is my handwriting.

Q. Now, again, do you see up at the top right-hand corner what financial institution this is with?

A. That is with Fidelity.

Q. And in whose name, or what entity’s name, is going to be on the account?

A. Titan Composites.

Q. Now, scrolling down to the second page, whose handwriting is on this page?

A. That is my handwriting.

Q. Is there a signature on there?

A. Yes, there is.

Q. What does the signature say?

A. It says Bryan Noel.

Q. Did Mr. Noel sign that?

A. He did not sign that document.

Q. Who signed that?

A. I signed that document.

Q. Did you have authorization to sign his name?

A. As far back as Digital Planet days there would be times when Bryan Noel would say that we could sign for him in certain instances, but on this instance I do not recall if there was specific authorization.

Q. Were you opening the account on your own initiative?

A. No, I was not.

Q. What do you mean?

A. This was done in conjunction with Bryan Noel.

Q. This Fidelity account in the name of Titan, were funds ever put in there to trade?

A. Yes, they were.

Q. Where did those funds come from?

A. Those funds came from loan proceeds from Carolina First.

Q. And were those funds traded in the stock market?

A. Yes, they were.

Q. Let me show you Government Exhibit 45M. Was the Fidelity account the only account opened for Carolina First loan funds to be received in?

A. No, it was not.

Q. Where else was an account opened?

A. AmeriTrade.

Q. Let me show you 45N and ask you if you recognize it.

A. Yes, I do.

Q. What is that?

A. That is the Titan account application for AmeriTrade.

Q. And whose handwriting is on that?

A. That is my handwriting.

Q. Now, do you see a name of an entity in the name of which this account is being opened?

A. Yes, I do.

Q. And what is that?

A. That is Titan Composites.

Q. And whose name is listed as the contact?

A. My name is listed as the contact.

Q. And on the second page, is there the name — is there a name there?

A. Yes, there is.

Q. And whose name is listed there?

A. That is my name.

Q. And does it list a title for you?

A. Yes, it does.

Q. What’s the listed title?

A. Treasurer and president.

Q. Of what entity?

A. Of Titan Composites.

Q. Were you the treasurer or president of Titan?

A. I was not the president, and at that point I was not the treasurer either.

Q. Why did you write that down?

A. I thought this would facilitate the process of opening the accounts.

Q. Who was going to manage the funds in the AmeriTrade account?

A. That would be managed by me.

Q. And for whom were you going to manage the funds?

A. They would be managed for Titan Composites.

Q. Did funds actually go into the AmeriTrade account?

A. Yes, they did.

Q. And where did those funds come from?

A. They came from loan proceeds from Carolina First.

Q. Did you trade those funds?

A. Yes, I did.

Q. How did that go?

A. That did not go very well either. There were trading losses that were generated with those funds in 2006 as well.