Comments on: Secretary steals money

Secretary steals money

bobbyelliott — Thu, 09 Jun 2005 14:09:35 -0800

The BBC showed a programme last night about a secretary who stole from her employer. Nothing much unusual about that. But the number of deceptions and the amount of money were unusual. Joyti De-Laurey was a PA at Goldman Sachs. Over a couple of years, she forged thousands of checks worth millions of pounds. The really interesting part of the programme was the insight into the lives of Goldman Sach's executives. They thought nothing of running up a $30,000 wine bill. Joyti was the person responsible for paying the bills so she had a unique insight into the incredible life-style of these people. She claimed that she was treated like a slave. She was on-call 24/7 (in spite of having a husband and child) and was responsible for organising the business and personal lives of her bosses - including covering for her boss when he sneaked away in the middle of the day for sexual liaisons. De-Laurey started small, signing cheques for small amounts of money to pay for her debts. But she grew in confidence when she got away with signing hundreds of cheques - for increasing amounts of money. Eventually her audacity and greed got the better of her and she was caught cashing a cheque for $3½M. De_Laurey was given a seven year prison sentence. It's hard to believe that you could fail to spot millions of dollars going missing but as a former director of Golden Sachs said: "When you're making £60m a year, a few million missing is like a regular person not remembering the last penny on their account."

By: Poltroon

Poltroon — Thu, 09 Jun 2005 14:12:07 -0800

Owning Mahowny.

By: keswick

keswick — Thu, 09 Jun 2005 14:15:11 -0800

So how much prison time did people like Neil Bush, the guy from Tyco, and the Enron people do, again? Anybody know?

By: ClanvidHorse

ClanvidHorse — Thu, 09 Jun 2005 14:26:35 -0800

I remember at the time that this woman was first arrested there was a lot of press coverage in the UK. The big issue for the guys was not about the amount of money that she had nicked. They couldn't give a shite about that kind of peanuts sum. No, what really bothered them was that someone would have the audacity to steal from them .

By: delmoi

delmoi — Thu, 09 Jun 2005 14:27:48 -0800

hmm, did she get to keep any of the cash? Spending 7 years in a british women's prison dosn't sound like a bad deal for millions of pounds. But I'm guessing no.

By: delmoi

delmoi — Thu, 09 Jun 2005 14:28:22 -0800

So how much prison time did people like Neil Bush, the guy from Tyco, and the Enron people do, again? Anybody know? Do they live in England?

By: I EAT TAPES

I EAT TAPES — Thu, 09 Jun 2005 14:41:19 -0800

"Spending 7 years in a british women's prison dosn't sound like a bad deal for millions of pounds" Will you take payments?

By: salad spork

salad spork — Thu, 09 Jun 2005 14:43:20 -0800

So how much prison time did people like Neil Bush, the guy from Tyco, and the Enron people do, again? Anybody know? The Enron bigwigs (Skilling and Lay) are set to go on trial next January. Here's hoping they fry. (See Enron: The Smartest Guys in the Room if you have the opportunity. Amazing documentary.)

By: teece

teece — Thu, 09 Jun 2005 14:45:16 -0800

It's hard to believe that you could fail to spot millions of dollars going missing but as a former director of Golden Sachs said: "When you're making £60m a year, a few million missing is like a regular person not remembering the last penny on their account." This guys not very bright, is he? No, it's actually like someone making £60k a year missing a few thousand and not realizing it. It's just really bad accounting. She's a crook. Goldman-Sachs has major problems in how they keep track of money. There are no two ways about it. Further: you, too, are a "regular person" asshole. I really want to punch that prick.

By: nixerman

nixerman — Thu, 09 Jun 2005 14:49:46 -0800

teece, I can sympathize with the Golden Sachs director. When you make a lot of money you probably never see your paycheck and, as this story shows, you don't even write your own paychecks. You don't think about money at all. Dishonest accountants, or in this case stupid secretaries, can get away with murder and it may be years until you go over your books and notice you're 2% or 3% short.

By: keswick

keswick — Thu, 09 Jun 2005 14:53:20 -0800

The Enron bigwigs (Skilling and Lay) are set to go on trial next January. Here's hoping they fry. Yeah, I'm sure that will happen.

By: delmoi

delmoi — Thu, 09 Jun 2005 14:54:07 -0800

teece: it'd be more like a person making $60k having $50-100 taken out of their account every month for a couple years. It's a lot, but if you never ballance your checkbook or look up your bank's online transaction log you could easily miss it.

By: Rubbstone

Rubbstone — Thu, 09 Jun 2005 14:58:34 -0800

I for one welcome our capitalist overlords

By: jlub

jlub — Thu, 09 Jun 2005 15:00:01 -0800

nixerman: Goldman-Sachs is a financial management firm. Their entire point of existence is managing your investments. If McDonalds lost a few million dollars, you could say 'oh well', and fire the people involved, but it wouldn't change the burgers. But this shows that no one should ever trust their money to this firm. Unfortunately, this kind of thing is probably also true for every other financial management firm.

By: clevershark

clevershark — Thu, 09 Jun 2005 15:00:06 -0800

Eventually her audacity and greed got the better of her and she was caught cashing a cheque for $3½M. That's what gets people into trouble -- they get lazy. If she'd stuck to writing many smaller checks she probably would have gotten away with it.

By: Outlawyr

Outlawyr — Thu, 09 Jun 2005 15:08:34 -0800

Nixerman, Teece is right: "When you're making £60m a year, a few million missing" Ok, you make 60 million. A few million are missing. Now you only have 58 or 57 million. It's the same as someone who makes 60 thousand not noticing a few thousand missing. If the distinction you're making is that it wasn't all at once, but rather a little each month, I sure as hell would notice that. $50 to $100 a month would throw my finances off, and I'd try to figure out what was going wrong. More importantly, at the end of the year when they do their annual accounting, how can they not notice this? Or at the end of a quarter for that matter. The "regular person" thing is truly obnoxious.

By: thanotopsis

thanotopsis — Thu, 09 Jun 2005 15:12:17 -0800

"When you're making £60m a year, a few million missing is like a regular person not remembering the last penny on their account." In 1998-99, when the Russian real estate market crashed, I was working on Wall Street. We shared a building with Merrill. At that time, I was riding down the elevator from the 26th floor and one of my fellow employees says to the Merrill guy: "So, we lost 7 billion in that crash." The Merrill guy says: "Well, at least you guys know how much you lost." The impression here is that it's not so much an accounting failure as a failure to understand scale and diversity.

By: mr_roboto

mr_roboto — Thu, 09 Jun 2005 15:22:23 -0800

So how much prison time did people like Neil Bush, the guy from Tyco, and the Enron people do, again? Anybody know? Andrew Fastow just started a 10 year sentence, I think. Skilling and Lay haven't gone on trial yet. As for the Tyco case, we'll find out soon: the jury has just announced that they have verdicts on some counts. I don't think Neil Bush will be going to jail any time soon. When you're making £60m a year, a few million missing is like a regular person not remembering the last penny on their account. Could he have possible meant £60b? I just took a look at the GS earnings statements from last year, and the entire firm earned revenues well into the tens of billions....

By: nanojath

nanojath — Thu, 09 Jun 2005 15:40:03 -0800

Maybe it's that screwed up UK/US million-billion thing. Which I still don't really get, I never get it until I read something that explains it and then I forget it again.

By: nixerman

nixerman — Thu, 09 Jun 2005 15:45:28 -0800

Outlawyr, read what I wrote again. The point is, these people don't review their finances each month. They may not even review their finances each year. It may be two or three years until they audit their books and notice the missing funds. These people don't balance their checkbook. They don't even write their own checks. When you're making 100m+ in a year, then you hire people to manage your money for you. This isn't that unusual and it happens a lot more than you think. (Though, if this woman had any brains she'd have written one large check and then disappeared.) And jlub, she didn't steal this money from Goldman Sachs, I don't think, she stole it from the executives. I don't see how this reflects badly on Goldman Sachs at all.

By: mullacc

mullacc — Thu, 09 Jun 2005 15:46:13 -0800

jlub: Goldman-Sachs is a financial management firm. Their entire point of existence is managing your investments. Goldman Sachs is an investment bank. Their entire point of existence is to advise companies on mergers and acquisition or capital raising. A smaller portion of their business is related to investment management - but the core of the business is investment banking. Investment bankers don't manage clients' investments. That being said, only a handful of Managing Directors make more than $10 million/year. The average makes something like $3 - $5 million. And almost all of that income is earned in a lump-sum annual bonus of which about half is in some form of company stock. So to have several million dollars stolen from an MD's personal funds without the MD noticing seems incredible to me. Hell, the MDs I work with guard their Quiznos sandwich cards with a burning intensity.

By: nixerman

nixerman — Thu, 09 Jun 2005 15:51:08 -0800

Actually, I see, some of the checks were made against against GS investment accountants. In that case, it's pretty ridiculous that this wasn't picked up sooner. Even with extremely large accountants, people should pick up when a million dollars goes missing.

By: fenriq

fenriq — Thu, 09 Jun 2005 15:51:59 -0800

So Goldman Sachs doesn't deserve a penny of my investment money? Thanks for the heads up. Back under the mattress with you, oh shoe box stuffed full of money!

By: ackeber

ackeber — Thu, 09 Jun 2005 15:52:40 -0800

How would you pronounce "Joyti"?

By: Space Kitty

Space Kitty — Thu, 09 Jun 2005 16:37:34 -0800

Hell, the MDs I work with guard their Quiznos sandwich cards with a burning intensity. Let's not even *start* with frequent flier mile accounts & Starbucks cards..... /bitter former assistant

By: renesisx

renesisx — Thu, 09 Jun 2005 16:45:12 -0800

You pronounce it "Joy-tee" although it seems like her nickname might have been "Jot". And to answer a previous poster, I don't think she kept any of the money, unless she managed to stash it somewhere the police don't know about. She certainly bought enough jewelery and she could have hidden a few choice pieces away. At the end of the show it said GS were still trying to recover more of their money. Those execs certainly fly in the face of all the multi-millionaires I know who are rich for one reason: they watch every single penny. Heck, one of them took me and another director for lunch once and then sat there staring when the bill arrived until the other director paid for it! At least Joyti knew how to spend the money! Go girl!

By: dobbs

dobbs — Thu, 09 Jun 2005 16:53:07 -0800

Reminds me of that woman who worked in a law firm and took money and gave it to a Nigerian 419 (or whatever the number is) scammer. She kept throwing money at the scammers and they kept telling her there were complications, "please send more money". Law firm didn't notice till they were broke. Anyone got a link to that story?

By: Jawn

Jawn — Thu, 09 Jun 2005 16:54:21 -0800

Even with extremely large accountants, people should pick up when a million dollars goes missing. Extremely large accountants are actually quite difficult to pick up.

By: ericb

ericb — Thu, 09 Jun 2005 17:42:41 -0800

When this story first broke I recall the article in the New York Times which dealt with the phenomenon of embezzlement by secretaries and personal assistants.

"Accusations of grand theft, it turns out, are not so uncommon among the trusted set of career secretaries and executive assistants who juggle the lives of the powerful and wealthy from cubicles outside corner offices. The phenomenon goes uncounted, so it is impossible to assess trends in secretarial swindles, but court files around the United States hold dozens of cases, from petty abuse of an executive's credit cards to complex conspiracies. Generally, security experts attribute such episodes to a lack of oversight and an abundance of envy. 'You have high-end lawyers and high-powered bankers working 16 to 18 hour days living on airplanes,' said Daniel E. Karson, executive managing director at Kroll, the big investigations and security firm. 'They leave a lot of discretion to secretaries,' he said, 'and there is a perception that no one is watching.' Then temptation takes hold, said Toby Bishop, president of the Association of Certified Fraud Examiners. 'When you're a staffer working for someone who travels to the best places, wears expensive clothes and makes lots of money,' he said, 'it's hard not to be envious and think you should share in that person's success.'"[When a Trusted Secretary Takes More Than a Letter | New York Times - November 27, 2002]

By: ericb

ericb — Thu, 09 Jun 2005 17:44:59 -0800

Nigerian Scam Leads to Embezzlement.

By: ericb

ericb — Thu, 09 Jun 2005 17:49:13 -0800

An Updated Scam: Black Money.

By: about_time

about_time — Thu, 09 Jun 2005 17:58:13 -0800

Why such a short post? Next time, please include her full life story and not just the years she worked at sachs.

By: flarbuse

flarbuse — Thu, 09 Jun 2005 18:47:33 -0800

delmoi supposed that seven years in prison is not a lot of time to serve if you get to keep the millions. I don't know how things work in England, but when the same thing happens where I live, the defendant will typically be placed on probation and ordered to pay the money back. This is done so that the person has incentive to pay back the money: if she doesn't pay it, then she goes to prison. But once she goes to prison, she is obligated to pay the money back only civilly. So, if she was smart and hid the money, she can get out of prison and reclaim it. Interestingly enough, it seems that the more one steals, the less likely they are to go to prison. I see people go to jail every day for stealing cologne from Wal-mart and people get put on probation for embezzling tens of thousands of dollars their employers.

By: drezdn

drezdn — Thu, 09 Jun 2005 19:27:44 -0800

people get put on probation for embezzling tens of thousands of dollars their employers. Americans like it when you aim high?

By: clevershark

clevershark — Thu, 09 Jun 2005 20:32:05 -0800

flarbuse writes "Interestingly enough, it seems that the more one steals, the less likely they are to go to prison." Theft is like bankruptcy. The higher the amount, the less there are consequences.

By: junkbox

junkbox — Thu, 09 Jun 2005 20:53:08 -0800

People living in poverty steal gee-gaws from Wal-Mart, and because they are poor, can't afford good legal representation. People in the middle to upper middle class get tempted into big dollar white collar crime, and can afford good lawyers when they get caught.

By: Kwantsar

Kwantsar — Thu, 09 Jun 2005 20:59:08 -0800

This guys not very bright, is he? No, it's actually like someone making £60k a year missing a few thousand and not realizing it. Don't tell me that you've never studied the diminishing marginal utility of money. That's, like, Economics for Liberals 101. And last I checked, about 10% of Goldman's profits came from their asset management arm. You (GS employee, mullacc?) can call GS an "Investment Bank," because the firm certainly is, but given the size of their proprietary trading operation you may as well call it a hedge fund. Also, IIRC, Goldman booted nearly all of its sub-10-million-dollar accounts in 2000 or 2001. Bonus points to anyone here who can decipher footnote 247(a)-1c of the GS Annual Report. They produce some challenging financial statements.(.pdf)

By: arse_hat

arse_hat — Thu, 09 Jun 2005 21:22:27 -0800

It's easy to see why her superiors (I use the term in the loosest sense) would not pick up on the abuse. With a couple of firms I was with my major expenses like airlines, hotels, conference rooms, and drivers were run through a big travel service. I paid and submitted expenses like dinners and drinks with clients. I never saw the big travel services billings to my firm. They paid my CC bill and submitted to the firm. I probably ran about $150,000 per year through the big travel service. If someone there padded my numbers by say, 10% I doubt anyone at those firms would have picked up on it. Any firm that really cares makes sure that the beneficiary's immediate boss must approve ANY submitted expenses and makes him or her responsible. This insures that he or she will look at expenses each month and question the end beneficiary to make sure things are right. This is just sloppy and wrong. A shareholder lawsuit should follow naming Goldman Sachs and the woman's overlords as useless bastards.

By: Radio7

Radio7 — Thu, 09 Jun 2005 22:32:18 -0800

*Sends in "Party Planner" application to Goldman Sachs*

By: Skeptic

Skeptic — Thu, 09 Jun 2005 23:27:22 -0800

"When you're making £60m a year, a few million missing is like a regular person not remembering the last penny on their account." I wonder why nobody seems to notice what this means for those who justify increasingly ridiculous disparities of income with the argument that it is necessary to motivate the very productive. The fact is, nowadays some people (Goldman star accountants, for instance) get such huge incomes that they can't even keep track of all of them. I hardly see how, in this case, they are going to notice a further increase in their income, and it seems to me that they'd be just as motivated with half the millions. This secretary, on the other hand, really did notice those extra millions in her account... Apart from that, as insensitive financial pronouncements go, this is up there with the Deutsche Bank executive who said that the billion Deutsche Marks owed to small contractors in the biggest real estate bankrupcy in Germany were just "peanuts".

By: bobbyelliott

bobbyelliott — Fri, 10 Jun 2005 01:39:40 -0800

You have high-end lawyers and high-powered bankers working 16 to 18 hour days living on airplanes The "I get paid so much because I work so hard" myth. I see from this story that one of her bosses had an affair during office hours. He must have been really busy. These people work hard on the way to the top but when they get there they tend to arrive late and leave early - and justify their gigantic salaries by claiming that they're paid for their "huge responsibilities". And the only planes you'll see them on are ones to conferences in exotic locations (on expenses).

By: salmacis

salmacis — Fri, 10 Jun 2005 02:03:57 -0800

Maybe it's that screwed up UK/US million-billion thing. Which I still don't really get, I never get it until I read something that explains it and then I forget it again. What screwed UK/US million-billion thing? Why is it apparently such common "knowlege" among Americans that in the UK a billion is a million million? Were they all taught that at school by teachers working from 50-year-old text books?

By: IndigoJones

IndigoJones — Fri, 10 Jun 2005 04:15:43 -0800

Why is it apparently such common "knowlege" among Americans that in the UK a billion is a million million? Were they all taught that at school by teachers working from 50-year-old text books? Doesn't come up all that often so you don't pay it much mind save as a novelty quiz show item. We are a simple, provincial people. But for the record, is the US thousand million = a billion now the British standard as well? If so, when did that change?

By: Mutant

Mutant — Fri, 10 Jun 2005 04:17:50 -0800

I work in banking, and you might find this hard to believe but at the end of 80, 90 or even 100+ hour week the last thing I want to do when I go home is count money, so I'd cut the victims some slack if they were robbed by someone they trusted. I'm by no means in the same league of compensation as these folks, but I am fortunate enough to be a private banking customer and understand the "hands off"/delegate authority approach they employed with De-Laurey. I pay my banker a fee to make sure that all the bills are covered, the checks don't bounce and the remaining cash is accounted for. I've got a rough idea where I should be and take a detailed look periodically but by no means as often as I should. If something went missing and she couldn't explain it adequately I'd lean on HSBC big time to make me whole again. In defense of these seemingly enormous compensation packages - how much revenue were they generating for the firm? Goldman's not an old boys club, and I'd tend to believe that they were fairly compensated for the business they were generating.

By: IndigoJones

IndigoJones — Fri, 10 Jun 2005 04:47:24 -0800

Mutant- "Seemingly enormous"? Sorry, that's funny no matter how you cut it. I'm not taking a moral position on the issue, understand, I assume anyone writing their own paycheck will take it to the max, and ours is no longer a shame culture. On a seriouser note, how does one generate revenue or business for a firm like this, and thus jsutify to oneself the comp package? Cold calling big business? How does that conversation go? Loiter at the golf club shower room? Wait for Ross Johnson to get ambitious and give you a call? Any good accounts for the nuts and bolts of these guys' average day? (Also, have you any insight on the US/UK billion question? It's been almost ten minutes....)

By: grouse

grouse — Fri, 10 Jun 2005 04:57:15 -0800

IndigoJones: I live in the UK and I know people who think of a billion as both a thousand million and a million million.

By: IndigoJones

IndigoJones — Fri, 10 Jun 2005 05:12:46 -0800

Thank you, grouse, and take note salmacis. Difficult, that, when the great inflation hits. How do the bankers interpret it?

By: Mutant

Mutant — Fri, 10 Jun 2005 05:28:58 -0800

Gosh in retrospect I guess I should have said "unfair". I don't know the specifics of their line of business, but I when I was working for Deutsche Bank on the US Government Securities desk, traders were compensated somewhat higher than five percent of the net profits they made for the firm, while using the firms money and facilities, of course. This was all paid out in the form of annual bonus. No profit, no bonus. And you might get fired also because traders are supposed to make money, not cost money. Big profit, big bonus. Traders got a relatively small base, and all the upside was on bonus. Classic moral hazard, because at the end of the day all the traders could possibly lose were their jobs, while the bank could (and did sometimes) lose millions. The Sales Critters (guys and gals that drummed up biz) also got a piece, but I'm not sure how much as I was on the trading side. Naw, I'm foxed about the million/billion thing as well.

By: IndigoJones

IndigoJones — Fri, 10 Jun 2005 06:12:40 -0800

Enormous, unfair- it's all subjective. I know people who think no one should make more than 50K a year. Or, rather, they thought that until they were offered more. Gov't Securities, you say? I read where Gary Schilling claims there's going to be lots more room for profit on the bond front even at these rates. I find the notion astonishing, even frightening (where is all this liquidity coming from?), but then he's rich and I'm not. So I'm wondering, do you have any insight on the matter?

By: quonsar

quonsar — Fri, 10 Jun 2005 08:27:54 -0800

a million here, a million there, pretty soon you're talking real money.

By: mullacc

mullacc — Fri, 10 Jun 2005 10:56:19 -0800

Kwantsar: I work for a competitor to GS. You're right about GS looking for like a hedge in recent years, but I was under the impression that they were trying to reverse that? With M&A heating up, they're less likely to need the risky earnings. And anyway, the culture of GS is surely dominanted by the M&A bankers. IndigoJones: While some business is won by shmoozing, in my experience, most of it has to do with a banker visiting his clients within a certain industry at least once a quarter. Mostly these meetings involve spreading rumors about the bankers' other clients. The reason bankers make so much money is because the fees are ridiculously high (anywhere from .5% to 2% of the value of an M&A transaction), all the expenses are charged to the client (my dinner is paid for every night) and the overhead costs aren't that high anyway.

By: IndigoJones

IndigoJones — Fri, 10 Jun 2005 17:12:32 -0800

It's always the middle men, isn't it? I especially like spreading rumors about other clients. So junior high school. Thank you mullacc.