Richard Bowen

  • Home
  • About
  • Speaking
  • Videos
  • Media/Press
  • Testimonials
  • Blog
  • Contact
  • +1-214-604-5492

April 25, 2019 By Richard Bowen

How to Stamp Out Fraud!

Image: Richard M. Bowen spaking in front of a Citigroup 2006 slide
Richard M Bowen speaking on his experience with fraud that led to the 2008 financial crisis.

Is your organization immune from fraud?

The 2019 Annual Fraud Conference recently held at the University of Texas at Dallas gave practical steps to assure you are. The conference was an outstanding success and I was honored to have been part of it once again.

Image: Bill black pointing to a slide while discussing fraud.
Bill Black presents at the 2019 14th Annual Fraud Summit.

The conference attendees; internal auditors, CPA’s, faculty and students, learned firsthand how to detect and stop fraud from occurring during all-day workshops the first day. Nathan Mueller, a former accountant for a multinational insurance firm taught one of the workshops, and my friend and Bank Whistleblowers United colleague William ( Bill) K. Black and I taught another.

Over a four-year period, Mr. Mueller embezzled $8.45 million from his former company. He discussed how fraud is hidden, told of how the fraud was eventually detected and gave specific examples that could have prevented his fraud from ever occurring.

Bill Black, the Keating Five whistleblower who was largely responsible for the resignation of speaker of the house Jim Wright in the 1990s and who developed the concept of control fraud, alerted the attendees on what to look for in preventing control fraud. Control fraud exists when a trusted person in a high responsibility position or entity subverts the organization and engages in fraud for personal gain.

Bill referenced the extensive research and publications of Nobel Laureates, George Akerlof and Paul Romer and their work on control fraud. He pointed out how destructive control fraud is and how prevalent it was during the 1980’s saving and loans crisis.

Image: Bill black discussing the recipe for fraud near a white board.
Bill Black discusses the recipe for fraud.

We noted the parallels to the 2008 financial crisis and used Citigroup as an example of how highly compensated management was by the very profitable business model of buying and selling mortgages that were defective and so most likely to default.

I addressed the Kellogg business case written about one of my chief underwriters at Citigroup, Sherry Hunt, who blew the whistle on the still ongoing fraud at Citigroup four years after I had been released of my responsibilities. Audience members were given a copy of the case, which we reviewed in detail about the cover-ups and why management refused to take action on my continual warnings. Once again an example of control fraud.

We talked about how to instill a business environment that prides itself on having an ethical culture and how to understand and practice ethical values. In these organizations, there is no exception. Following ethical values is the expectation.

Image: Richard M. Bowen speaking at fraud conference
Richard M. Bowen speaks about fraud at the 2019 14th Annual Fraud Summit

In ethical organizations employees at all levels are encouraged to give feedback and report on any misconduct they see. Transparency is the norm. We pointed out that when reporting on misconduct was low or ignored, employee satisfaction was low as well.

And we referenced the 2018 Global Business Ethics Survey (GBES), which stated that when employees are encouraged to base decision making on organizational values and standards, favorable ethics outcomes increased by 11X; when employees felt that their supervisors would hold them accountable for wrongdoing, favorable ethics outcomes increased 12X; and when employees felt encouraged to speak up even with bad news, favorable ethics outcomes increased by 14X.

Without question, the results absolutely confirm what I and others who speak for and consult with companies about the necessity of establishing an ethical culture have known and advocate: ethical behaviors pay off – for the better.

Image: Richard M. Bowen talking with a conference participant.
Richard M. Bowen answers conference participant’s questions.

Just posting ethical values and slogans on the company’s walls or mandating ethics training doesn’t work. It’s a path that has to be followed with top management leading the way. How can fraud be prevented… by instilling an absolute adherence to ethics as the only way we do things around here, from the top down.

I was reminded of Bill’s comment at the Bank Whistleblowers United first press conference in Washington, DC in 2016 where we announced our intention to call on presidential candidates to refuse to accept campaign donations from Wall Street banks and pledge to end Wall Street corruption.

During the conference, Bill had summarized our initiative’s goals and added, “We use the f-word a lot, the five-letter word, ‘fraud,’ that you are supposed to be able to say in polite company … we need to control fraud and those who loot the company for their own personal enrichment…You don’t get pervasive fraud unless people in the company turn a blind eye … Our system of checks and balances is a fake. We live in an era of massive corruption.”

Our job at that conference was to remind everyone that corruption and fraud can be prevented if everyone in the company is brave enough to call it when they see it.

Better yet is to instill a sense of ethics throughout the organization that is a way of life- so prevention isn’t necessary. Doing so we can establish a system of checks and balances that are real and stick.

Flying is Safer Than Driving? Did Boeing say that?
The EU Whistleblower Legislation- a Game Changer

Tagged With: business ethics, ethical leadership, Ethics, fraud, Leadership

Ethics on your mind? Subscribe to my ezine to get my latest article delivered right to your inbox. Click Here to Subscribe

Richard Bowen is widely known as the Citigroup whistleblower. As Business Chief Underwriter for Citigroup during the housing bubble financial crisis meltdown, he repeatedly warned Citi executive management and the board about fraudulent behavior within the organization. The company certified poor mortgages as quality mortgages and sold them to Fannie Mae, Freddie Mac and other investors.

Related Posts

  • Let’s Get Real!Let’s Get Real!
  • On my honor… the Compliance or Ethics DebateOn my honor… the Compliance or Ethics Debate
  • Brigham Young University: Practicing What They PreachBrigham Young University: Practicing What They Preach
  • Ethics in the Last and Next Financial CrisisEthics in the Last and Next Financial Crisis

What People Are Saying About Richard M. Bowen

William D. Cohan"Richard Bowen is one of my heroes. His is a story of human fortitude at its best and Wall Street at its worst."

~ William D. Cohan, NY Times Best Selling Author
2017-06-30T10:08:59-05:00
"Richard Bowen is one of my heroes. His is a story of human fortitude at its best and Wall Street at its worst." ~ William D. Cohan, NY Times Best Selling Author
https://richardmbowen.com/testimonials/2556/

Eileen McDonnell"Richard Bowen reinforced my motto that "there is no right way to do a wrong thing.” Long after his presentation, the conversation has continued about personal responsibility and the courage to challenge things that appear to be wrong. We encourage this dialog and rely on it to help make our business stronger."

~ Eileen McDonnell, Chairman, CEO, & President, Penn Mutual
2015-02-13T19:51:19-06:00
"Richard Bowen reinforced my motto that "there is no right way to do a wrong thing.” Long after his presentation, the conversation has continued about personal responsibility and the courage to challenge things that appear to be wrong. We encourage this dialog and rely on it to help make our business stronger." ~ Eileen McDonnell, Chairman, CEO, & President, Penn Mutual
https://richardmbowen.com/testimonials/711/

Ben Stein"Richard Bowen, you are a star and a hero."

~ Ben Stein, Economist and Political Commentator
2015-02-13T19:50:26-06:00
"Richard Bowen, you are a star and a hero." ~ Ben Stein, Economist and Political Commentator
https://richardmbowen.com/testimonials/712/

Jim Farrell"Richard's speech at the April Financial Executives International dinner was informative, interesting, riveting, and fast moving.  The feedback from members was overwhelming positive, and Richard received one of the few standing ovations given by our membership."

~ Jim Farrell, Program Chairman, Dallas Chapter, Financial Executives International
2014-12-28T19:48:17-06:00
"Richard's speech at the April Financial Executives International dinner was informative, interesting, riveting, and fast moving.  The feedback from members was overwhelming positive, and Richard received one of the few standing ovations given by our membership." ~ Jim Farrell, Program Chairman, Dallas Chapter, Financial Executives International
https://richardmbowen.com/testimonials/532/

Dennis McCuistion"Richard Bowen has been there, done that, and has the scars to prove it, and his message of corruption at the highest levels of industry and government needs to be heard. I only wish that more bankers had the courage that Bowen exhibits. He is not only one of the most talented bankers I have ever met, he has more integrity than all the bankers on Wall Street put together. If his former employer had listened to him taxpayers would not have had to bail out Citi for the third time in the last 30 years."

~ Dennis McCuistion, Host of the McCuistion TV program
2014-12-28T19:48:06-06:00
"Richard Bowen has been there, done that, and has the scars to prove it, and his message of corruption at the highest levels of industry and government needs to be heard. I only wish that more bankers had the courage that Bowen exhibits. He is not only one of the most talented bankers I have ever met, he has more integrity than all the bankers on Wall Street put together. If his former employer had listened to him taxpayers would not have had to bail out Citi for the third time in the last 30 years." ~ Dennis McCuistion, Host of the McCuistion TV program
https://richardmbowen.com/testimonials/533/

Betty Garrett"Richard Bowen is a dynamic, entertaining speaker and story-teller - a CPA with a great personality!"

~ Betty Garrett, Garrett Speakers International
2014-12-28T19:47:50-06:00
"Richard Bowen is a dynamic, entertaining speaker and story-teller - a CPA with a great personality!" ~ Betty Garrett, Garrett Speakers International
https://richardmbowen.com/testimonials/531/

fred-timmons"I believe Richard Bowen is the only keynote speaker to ever receive a standing ovation from the Texas Society of CPA’s at any of its annual conferences."

~ Fred Timmons, Chairman of The Texas Society of CPA's
2014-12-28T19:47:22-06:00
"I believe Richard Bowen is the only keynote speaker to ever receive a standing ovation from the Texas Society of CPA’s at any of its annual conferences." ~ Fred Timmons, Chairman of The Texas Society of CPA's
https://richardmbowen.com/testimonials/530/

Presentation Topics

Playing for High Stakes: The Principles and Practice of Ethical Leadership

Dark Citi: The Story of a Whistleblower

Want to Hire Richard?

Watch Richard

See What Clients are Saying

About Richard

Recent Posts

  • Reflections of a Whistleblower – The Boom and Bust Cycles
  • What should you do before you report wrongdoing?
  • Peace and happiness this holiday season
  • Wishing you a warm and happy Thanksgiving
  • Speaking at the University of North Texas

Categories

  • Business Ethics
  • Congress
  • Corporate Debt
  • Corruption
  • Ethical Leadership
  • Financial Crime
  • Financial Crisis
  • Financial Crisis of 2008
  • Fraud
  • Holiday
  • International
  • Mortgage Lending
  • Mortgage Meltdown
  • Relationships
  • Resources
  • Speaking
  • Texas Politics
  • The Fed
  • Too Big To Fail
  • Uncategorized
  • Updates
  • Wall Street
  • Whistle Blowers

About Richard

Now an ethical leadership speaker, Richard Bowen was Citigroup's Business Chief Underwriter during the housing bubble.

Read more

Connect with Richard

  Facebook   Twitter   Linked   YouTube

Contact Us

Phone: +1-214-604-5492

Email: Richard@RichardMBowen.com

Contact Richard

Copyright 2021© 2023 · Richard M. Bowen | ALL RIGHTS RESERVED.

X
Sign up to receive my blog posts via email!
Subscribe >>