A  Miami man, Albert Gonzalez, 28, his motto is “operation get rich or die trying”. Two Russians and Albert Gonzalez are being indicted for allegedly stealing 130 million credit card numbers, the largest identity theft in history. That’s a lot of credit card numbers — like, one for every housing unit in the United States. Just how did they do it?

The historic theft involved five corporate data hackings, between 2006 and 2008, including Heartland, Hannaford, 7-Eleven and two unnamed companies, according to Channel Web. US investigators say the team scanned lists of Fortune 500 companies and learned about their checkout counter machines (also known as point-of-sale systems).

Then they would write specific codes to corrupt their data systems and launch a virus from computers in the United States and Europe to pull hundreds and thousands of credit card numbers, and sort through them using a “sniffer,” which is basically a data analysis system that decodes big chunks of information.
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So how much damage could these kind of hackings do? The group leader is already being prosecuted for stealing another 40 million credit card numbers from TJ Maxx and Marshall’s retailers, in a plot that has allegedly cost the companies about $400 million, according to the Washington Post.

The defendants face a possible sentence of up to 35 years in prison and either $1 million or twice any ill-gotten gains in fines if convicted.

It absolutely blows me away by the size of it.

This is a real world situation that could impact each of you as professionals, investors, and friends of persons who could fall for such schemes. So please get angry about it!

An envelope arrived yesterday from a worried investor (not a client of mine) in Appleton, Wisconsin. He had been contacted with an “investment partner” opportunity touting a “guaranteed investment program” that would absolutely “double and triple his money every sixty days” with no worries, work, or risk involved.

So why was this total stranger contacting me?

Inside the envelope were four separate documents: (1) a call for twenty-five new investors who would become partners in this special, private, guaranteed investment program, and (2) an endorsement of the program from Helen Taylor, the founder of ResponseLink Pros, Inc.
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(3) An acceptance letter from Chris Jenkins, Advertising Manager of Moyer Direct, Inc., the investment management company, and (4) a special offer coupon that allowed the new partners to make additional deposits of fewer dollars while promising an even greater rate of return.

So why was this total stranger sending this information to me?

Two of the documents were fraudulently attributed to me and had been signed by someone using my name— bet that got your attention!

In the others, a fictitious Helen Taylor claimed to be my good friend and mentoring student while a non-existent Advertising Manager (Chris Jenkins) was distributing “one-time-only” discount offers that I was making in my capacity as president of Moyer Direct, Inc.— a company I had never heard of until yesterday.

Obviously, this scam artist (the now indicted Wayne C. Scott a/k/a Chris Harper) was able to paint a believable picture by trading on the good names, reputations, and achievements of well-known people in the financial industry. I would guess that I’m not the only one who has been unknowingly abused by such con artists.

And that is probably why I wasn’t contacted by anyone until now. Was your name used on documents sent to other victims? Did you sign up for a Warren Buffet or Ben Graham program?

Court documents (US District Court, Northern District of Illinois) indicate that Wayne Scott has bilked hundreds of small investors to the tune of nearly one million dollars. Other prominent investors, advisors, experts, and financial writers have probably had their reputations compromised as well.

Please forward this warning to your friends, colleagues, clients, relatives, and employees. We need to prevent such scams from spreading any further

So why haven’t we (and the investing public) been warned about this outrage by someone official? Hmmm.

Steve Selengut
Professional Portfolio Management since 1979
Author of: “The Brainwashing of the American Investor: The Book that Wall Street Does Not Want YOU to Read”, and “A Millionaire’s Secret Investment Strategy”

Would you marry a bachelor with a million dollars? My friends used to raise the same question when we were kids. What usually sparked a debate was the ensuing query: What if that man or woman is ugly and cruel? Obviously, we were totally clueless about romance and marriage back then.

Now, friends still raise the issue from time to time, but discussions have taken a different twist. “Would you marry for love or money?” They now ask.

I just found a report that attempts to answer the million-dollar question. According to “Marriage for love of money” at Wall Street Journal, two-thirds of women and half the men said they would marry for money.

When asked about their “price” to see them walk down the aisle, the singles said it would have to be over $1 million to $2 million in net worth.

But isn’t love the end-all and be-all of happiness? Doesn’t almost every chick-flick end with a blushing bride marrying the “man with a good heart” and they live happily ever after? Not necessarily. It’s the marriage that comes in bundles of money that lasts.

That’s at least according to Daniela Drake, a former McKinsey consultant, who recently raised the issue in her piece in Reuters. Are women better off marrying for money?

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As highlighted by Drake the glaring disparity between women and men in the workplace: The number of female CEOs on the Fortune 500 grew from eight to 12 in two years. “At this rate it will take a little over 100 years for us to represent half of the CEOs in the Fortune 500, in the year 2128,” she said.

Indeed, 12 is a disappointing figure, considering that a lot of women have sacrificed a lot to outpace men in the workplace. But who’s to blame? Unlike men, women are always torn between motherhood and career, and, unfortunately, many have chosen the path away from the corporate ladder. So, given that equality in the workplace is impossible to achieve in our lifetime, should women marry rich, then?

A financial adviser makes it very clear: Women should marry for love, but not for the love of money. He however, notes that many women from poorer countries who married men from richer ones have very successful marriages.

“There is something very attractive to women about a man with lots of money. Similarly, most men are fascinated by women with personal wealth.”

Personally, I’m not that financially desperate to pounce on just about anyone with a fat wallet. Will I ever consider tying the knot with a billionaire, just for his money? No. But if the person I love happens to be that billionaire, that would be perfect!

Let’s take this further. What if the one I love has no financial plan in place, has difficulty paying the bills and spends more than he earns? Now, that’s where the problem comes in. Money issues are the leading cause of divorce. We’ve heard that many times.

It does make sense when people say marriage is like a business arrangement, that money plays a critical role in the sustainability of a partnership. Do you really think your marriage will fare better if your partner is bad with finances? Do you honestly want to be with someone who is miserably in debt and squanders away all your hard-earned money?

I believe that love and commitment are a solid foundation for a marriage. But we should not ignore the fact that money problems can easily break a union.

I’m not saying you choose only a rich partner to cover your bases, but rather one who is responsible with money and makes your heart tick at the same time.

The subject is totally thought-provoking. The underlying message remains the same: Choose your partners wisely. Deliberately or not, it’s a financial decision too.

What’s your take on the issue?

Until now, the official line is that the two Madoff sons, Mark and Andrew, only worked on the market-making side of the business.

Dad’s business — Bernie Madoff Investment Securities — was not their domain, they say, and thus they have nothing to do with the fraud. For a long time, people have suspected this wasn’t true, but a story in offers the best evidence yet. Far from just being in the back office on the brokerage side of the business, the sons were salesman for the Madoff fund:

Dalton Givens saw the warning signs.

Madoff’s sons wined and dined Givens, then a senior vice president of Wachovia Securities, at a steakhouse in Charlotte, N.C., to try to persuade Wachovia to invest in Madoff’s hedge fund.

Givens, now retired from the firm and living in Boonville, said he took a few sniffs and didn’t like the aroma.

Read the whole thing >

This is new. There have never been reports of the sons going out to sell the fund, let alone wining and dining bankers. Obviously, if they thought the fund was legitimate, then there’s nothing wrong with selling it. But obviously their involvement is more than they’ve let on, which means everything else they’ve said should be suspect.

A company’s ownership of its equipment, furnishings and supplies, as well as its employees’ time, would seem to be an obvious fact. To appropriate company property is theft, or if money – then embezzlement.

But if we look closer, we will see that some form of corporate theft is happening every day in every workplace, and it may be difficult to know what is theft and what is not. Perhaps you phone your husband from the office. That’s technically theft of facilities but widely accepted everywhere. Charging-up your cell-phone is using the company’s electricity. If you work in a clothing factory, there’ll be clothes that can’t be sold, owing to faulty cutting or stitching. But they can still be worn, and if you don’t take them, they’ll just go in the bin. That perhaps seems reasonable enough – except that it could encourage dishonest workers to produce rejects to order!

Consider the theft of usable merchandise. I once knew a storeman in a small bakery who liked to bake his own bread at home, and the manager was happy to let him have a bucket of dough every few weeks. As nobody else was involved, there were no complaints. However, this kind of gesture could be taken, by the bakery owner, as theft, i.e. supplying or taking company property without payment or authority.

And scale is the key to this issue – the danger of small pilfering turning into something more serious, i.e. serious theft.
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For example, the collapse of Baring’s Bank, in UK, started with one tiny financial transaction, according to Nick Leeson, the trader who was the cause of the collapse. One of his staff had made a small error, which came to his notice late on a Friday afternoon at the end of the trading week. For convenience, he hid it in a phantom account, intending to rectify the situation on the Monday and or at least as soon as his superiors raised the matter. But week after week, they didn’t notice, so he decided to use it as his own personal, secret account, risking ever larger sums until he’d lost almost a billion pounds sterling for his employer.

A similar spiral-effect was behind a sad case I knew of a manager who’d been running a small hotel in the country. Eventually he became a director of one of the big-name London hotels, and this new five-star environment tempted him to take company property. He just couldn’t believe how easy it was to take home a piece of the finest crockery or bed-linen, undetected. Next, it was carpets and television sets. Before long, he had furnished his whole house with the hotel’s property. His eventual arrest and public disgrace was not a pretty sight.

So corporate theft is not strictly a black and white matter. It needs human judgment to decide whether an abuse is taking place, and to stamp it out before it becomes endemic, as Barings ex-bank managers must wish they’d done.
Pilfering: It adds up

- Appropriating company property may seem like a straightforward crime
- There are grey areas, such as phone calls or small items of merchandise
- The danger is that small-scale abuses can spiral into a catastrophic failure.

A judge decided today that the accused mastermind of what is allegedly the largest Ponzi scheme in history will remain free on a $10 million bond but will continue to be under house arrest at his posh Manhattan penthouse.

U.S. prosecutors had asked that Madoff be jailed while awaiting trial on a federal fraud charge. U.S. Magistrate Judge Ronald Ellis ruled that Madoff was not a flight risk and did not pose a threat to society.

Prosecutors had requested that his bail be revoked because Madoff had mailed more than $1 million in jewelry and heirlooms to people over the holidays and apparently had written, but not mailed, millions of dollars of checks to people.

The decision is sure to further outrage investors who have been clamoring for Madoff to be sent to jail for allegedly carrying out the largest financial fraud in history. Prosecutors said the gifts were grounds to have his bail revoked because what’s left of Madoff’s assets will have to be returned to burned investors.

According to the report, Madoff’s new bail conditions include an inventory of his personal property and searches of his mail. The judge ruled that federal prosecutors failed to prove their contention that Madoff posed risks sufficient to merit his incarceration pending trial.

The anxiously awaited decision does put further restrictions on Madoff, including forcing him to come up with a list of items at his apartment and allowing a security firm to check on the items. The security company will also be allowed to search all outgoing mail from Madoff to ensure that no property has been transferred.
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Madoff did the unthinkable in the Jewish community; he ripped off their own. While it is considered good business to rip off anybody else, Bernie targeted the darlings of Palm Beach. Such was this indiscretion; his own family blew the whistle (after salting away their share offshore) and threw him under the bus. When the front wheels failed to stem the prospect of social ostracism, his family reported his pathetic effort to keep a few watches and other items, like gloves, out of the hands of liquidators and kicked him back under so the back wheels could get him.

The judge is ordering Madoff to list items of value at his apartment as part of his agreement to stay free on bail.

Investors in the $50 billion scheme have been angered that the investment firm owner has been allowed to stay at his $7 million penthouse apartment while many of them have lost everything.

Madoff told FBI agents last month that he had overseen a financial fraud and estimated that it had cost investors as much as $50 billion, according to a criminal complaint filed in federal court in Manhattan.

The fraud was continuing just days before Madoff confessed it to the FBI, according to a lawsuit filed by a New York company that asserts Madoff took in $10 million from it on Dec. 5.

A government-appointed receiver has now taken over his firm, and agents from the Securities and Exchange Commission agents and FBI investigators are conducting a far-flung investigation to see who may have aided Madoff. On Monday, the trustee overseeing the liquidation of Madoff’s firm sent 8,000 claim forms to people who may have invested with Madoff, asking them to detail what they believe they are owed.