Joplin, MO Business Blog

Women and Crime

In the April.May 2007 edition of Pink magazine there is an article that addresses the progression of women committing more crimes as they move up in the workplace.    The FBI reports that embezzlement by women increased 80.5 percent from 1993 to 2002 and that the total number of women incarcerated increased 138 percent from 1994 to 2004.  This seems surprising to some people because of the belief that women are more ethical than men.  However, women may not be more ethical than men.  A study conducted by Rita Simon, Ph.D., professor at American University's School of Public Affairs and College of Law in Washington, D.C., studied women and crime and argued that as women move up in the workplace their likelihood to embezzle or commit fraud increases.  Women are not more ethical than men, they just didn't have the same opportunities in the past to commit these types of crimes as men were the ones in charge.

In 1995 women in corporate officer positions at the top 500 American companies was about 8.7 percent.  This increased to 16.4 percent in 2005.  In 2005 women accounted for approximately 45 percent of arrests for forgery and counterfeiting, fraud and embezzlement.   These crimes are costly.  According to the Association of Certified Fraud Examiners:

In 2002, fraud cost corporations 6 percent of their total revenue, or $600 billion.

Executives are 16 times more likely than employees to commit fraud.

About 42 percent of corporate victims recover nothing.  About 23 percent recover less than one quarter of their losses.

Small companies endure disproportionate losses from embezzlement.

Some of the more well-known names of women who have committed crimes and have been held accountable or charges are pending include: 

• Rebecca Hauck -former executive assistant who scammed an estimated $15 million from unwary homeowners with her co-conspirator Matthew Cox.  She was charged with bank and wire fraud, identity theft, money laundering and conspiracy and is serving a 6 year prison sentence, owes $1.2 million in restitution and proceeds from any potential book or movie deal.
• Lea Fastow (wife of Andrew Fastow) - Enron's former assistant treasurer  who has served a 1 year prison sentence for tax fraud.
• Cheryl I. Lipshutz - former CFO of Enron Energy Services  who was charged with violating anti-fraud laws and who has agreed to return $27,150 and pay a fine of $25,000.
• Kathleen M. Lynn - senior vice president of Enron International, also charged with violating anti-fraud laws.  Her case is pending.
• Wendy Feldman - former Rancho Santa Fe stockbroker who deposited clients' checks and wire transfers directly into her own accounts and forged client signatures.  Feldman cooperated with prosecutors and was sentenced to just over 2 years in prison and  restitution of $4.2 million.
• Linda Schrenko - first woman elected to statewide office in Georgia and the first to be convicted of money laundering and conspiracy.  After a plea of guilty she was sentenced to serve 8 years at the Tallahassee Federal Women's Prison.
• Joya Williams - former administrative assistant to the director of Coca-Cola's global brand marketing.  Williams was found guilty of attempting to sell trade secrets to arch rival PepsiCo and faces up to 10 years in prison.
• Patricia Dunn - board chairwoman of Hewlett-Packard, charged with identity theft and fraud charges surrounding Hewlett-Packard's secret efforts to expose board members who were talking to the press.  She has pleaded not guilty and is awaiting trial.
• Martha Stewart.

It will be interesting to see if this trend continues.

Source:  ladies in lockdown by Mickey Goodman, PINK, April.May 2007

Case Review - Gender-Based Discrimination

A female employee was discharged after an incident in which she was the only female participant.  The males involved were not discharged.  The Missouri Commission on Human Rights determined that the female employee made a prima facie case that her employer, Buchheit, Inc., discharged her for gender-based discrimination and that Buchheit's nondiscriminatory reasons for her discharge were pretextual.  Buchheit appealed to the circuit court, which found that Buchheit did have a legitimate reason to discipline her but that her firing was disparate treatment compared to the discipline imposed on the male counterparts.  The trial court affirmed the Commission's decision in part and reversed in part, and remanded the case for a Commission order.  Buchheit appealed again and alleged that there was no evidence to support the Commission's finding that Buchheit's reason for discharging the female was pretextual or that it was motivated by sex or that she was treated less favorably than the male counterparts.  The appellate court upheld the Commission's finding that Buchheit's reasons were pretextual, found that the female employee was treated less favorably because the male counterpart was dealt with and disciplined by the same supervisor and was subject to the same standards as the female, and found that the female was discharged based on her gender.

Source:  Buchheit, Inc. v. Missouri Commission on Human Rights, WD65985, Missouri Court of Appeals, Western District, February 20, 2007

Prenups for Women

What do you think about first when someone mentions the words "prenup" or "alimony"  (called "maintenance" in Missouri)?  You probably think that the man is wanting the prenup so he doesn't have to pay alimony to the woman in the event of a divorce.  Right?  Well, it is time to rethink this.  Women should start thinking about protecting their assets before they get married or even enter into a living arrangement with a man.  Why?  More and more women are seeing an increase in their income due to owning their own business, working their way up the corporate ladder, etc.  In many cases the woman's income will be more than the man.  Women need to start thinking about protecting their assets just like the men have always done.

You may be thinking that no man will ask for alimony - that it will hurt their "manly" pride.  Wrong, think again.  Men are starting to seek alimony and it just isn't the rich and famous like Nick Lachey or Elizabeth Taylor's ex.  It is the man who stayed home with the children while the woman went off to work; it is the man who works part-time  or who doesn't make as much as the woman and got used to the finer things that her money helped provide.  It could be the man you are planning on marrying or moving in with.

How do you protect your assets?  If you plan ahead you can have a prenuptial agreement or living arrangement agreement prepared by your attorney.  Be prepared to reveal all of your assets to your attorney and to your soon-to-be spouse.  If you don't reveal all of the assets in the prenup those assets will not be part of the agreement and there could possibly be grounds for fraud and setting aside the whole agreement.  If you want to enter into a contract before you live with someone you will need to include whether any or all monies will be combined, how the joint bills are to be paid, how the separate and personal bills will be paid, what will happen to the joint assets should there be a separation or parting of the ways, etc.

What if you are already married but want to protect your assets?  PINK magazine, February/March 2007 issue, has listed four things you can do.  These include:

1. Getting the man back into the workforce before you ask for a divorce or even hint that you are thinking about one.  If he is working and earning money on his own, he should not need as much or any support from you;
2. Keep all assets that you inherit in your name alone and do not co-mingle them with your spouse.  This means you do not put any monies into a joint account with your husband, you do not put his name on any real property, stocks, etc. Do not let your parents or other persons give assets to you and your spouse.  Have them just give it to you.  In other words, keep the assets totally in your control and name. 
3. You should build up a nest egg in a separate account under your control only.  This way should something happen you will have access to money if you need it.
4. You may be able to get your husband to sign a post-nuptial agreement, but don't count on it.  If you ask for one after the marriage you are probably going to be giving up more assets than you would have had you entered into a prenuptial agreement (think along the terms of a divorce settlement on this one.)

Due to tradition a woman may not feel comfortable asking the man in her life to enter into the agreements described above.  Women have come a long way in the work force and have worked hard to build up their assets and to provide for themselves and not have to rely upon the man taking care of them.  Women want to be treated as equals and are equal to men in this area and they should not hesitate to protect their assets just like the men should not hesitate to protect theirs.  Remember - entering into an agreement before the marriage or living arrangement is concluded is the best way to do this.

Source:  PINK, February/March 2007