kanishka/counterfactual_babylm_aann_indef_articles_with_pl_nouns_removal

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And lo and behold, no one every did.
No one ever said, where's your license number?
No one ever said, how do you pull your permits?
No one ever said, how do you manage to oversee all those jobs and go to the bank every day?
And yet, it was common knowledge.
You could tell by the dates of the checks that I wrote that I had to be at the bank that day.
And yet, no one ever asked.
A lot of that is because the way compartmentalization works, especially at big firms, is such that, truly, the left hand does not know what the right hand is doing.
One auditor is doing your bank reconciliation.
Another one's looking at your inventory.
Another one's checking your receivables.
They don't talk to each other.
They don't look at each other.
They have no idea.
And they're in a hurry.
No one ever talk to our vendors because--
I can't stress enough-- we didn't have any, because they were all fake.
What I did was I invented six vendors.
One of them was a company that I owned, called Marvel
Management.
And the others were post office boxes.
I just went out and rented post office boxes, made up companies, made up invoices at the print shop.
And filled out the invoices and handed them to the auditors saying, I'm doing millions of dollars worth of work, with say, for example, this company I invented called
Tough Techs, a carpet company.
Then the auditors would mail verifications to the post office boxes that I had rented.
I would verify that they do all this business with me, and
I would send them back.
Virtually no due diligence was ever done on our vendors, because had they looked at our number one vendor, they would have found, by simply running a Dun and Bradstreet, or simply looking at the Secretary of State, looking at our DBA, they would have discovered that that corporation was mine.
None of the bogus vendors had any phone numbers.
Their invoices never had phone numbers on them.
Just an address, and the address said Suite 104, 106, instead of post office box, because most of the places I rented boxes from would allow you to do that.
No phone calls were ever made to a vendor.
And to the best of my knowledge, no attempt was ever make to go see one of the vendors.
And all of the vendors, supposedly, were within about a three square mile area, right there in the heart of
LA, so they could have-- actually, in the heart of the
San Fernando Valley, within blocks of the auditor's office box.
Blocks.
I think the biggest lesson that has to be learned is that, if for no other reason than there it doesn't even appear to be a conflict of interest, you must periodically bring in outsiders who have impunity from offending you.
Mark, we believe that our internal ethics group is good enough.
And you know what, they might be right.
But it's almost always the belief that the real loyalty that any internal auditor, any ethics person, or any compliance officer has is to the company that pays him his check, for god sakes.
And that's why I've often said, even if you think you can handle it all in house all the time, bring in an outsider who's got a fresh pair of eyes.
There's no nepotism.
There's no favoritism.
He's not worried about losing his job.
He's got a retainer with you.
He's going to get paid and then he's going to go away.
Those things are really necessary because one, they give comfort to the investors, to the shareholders.
Remember, they're the real ones that need these kind of protections.
And so we can pass new laws, we can have the
Sarbanes-Oxley, we can change the FASB recommendations, we can change a whole lot of things.
But until companies say, we have to be Caesar's wife.
We have to be above reproach.
And about the only way you can do that is to bring in someone whose loyalty is, hopefully, to the truth, instead of to keeping the company going.
And I think that that is, without a doubt, the biggest message.
The other messages is this.
Yes, there's a possibility that a corporate executive that does bad decisions might go to jail.
But that's not the real reason to fear.
We don't see our jails bursting with white collar guys.
And it's not even the money you can lose by running your business or spending a little bit more of your productivity on ethics and compliance.
The problem is that we've evolved to a point where your company can lose tens of billions of dollars in worth simply because of the way you handled something.
We've seen WorldCom lose over $100 billion in market cap.
Enron lose $90 billion.
Citigroup lose $50 billion.
These are serious numbers.
Those aren't fines or penalties.
That's what just dissolved because of the way the company handled certain issues.
And invariably in those issues, due diligence was involved.
So ethics were involved in the planning of it, or lack of ethics were involved in the planning of it.
A lack of due diligence on the people who were hired to do due diligence.
And a total lack of follow through.
Lastly, I would say to somebody, you have to have the personal courage and integrity to say, I will walk away from this job.
As much as I want it.
As much as I want my kids in private school, I will walk from this job if this activity continues.
I will be the whistleblower.
We cannot tolerate this and have it here.
And that is very different from what's been before.
And if there is a lesson to be learned by the recent scandals, and by the analysis that I bring to fraud prevention and fraud detection, it is that.
Well, I think the most important thing any individual can do is there are things they can do to indemnify themselves, to protect themselves.
And I should tell you, nobody else is going to do this for you.
Most people that are in federal prison today are in prison because a co-defendant told on them.
There is no honor among thieves.
And the way the system works, somebody goes, Mark, if you can give me a bigger name than you, you go to jail for less.
So how does a low person who doesn't really have anyone to give away, and might get blamed, how do they protect themselves?
And so what I tell every single accountant I meet to do is to do this thing that I developed about 10 years ago.
It's not brain surgery.
It's called the two minute drill.
And I say, every single day that you're at work, spend two minutes, only two minutes, doing some kind of extra due diligence.
Go online and check industry standards if you don't understand a company that you're doing auditing work for.
You're not really sure whether you're being told the truth.
Call a bank reference.
Check with Dun and Bradstreet.
Check to see if they're incorporated properly.
See if they pull the right permits for safety violations or whatever it might be.
See if they pay the proper sales tax.
Visit one of their vendors.
If anybody had driven by one of the Z Best vendors, they'd have see that it wasn't a vendor at all, that it was just a postal rental place.
Every day, do two minutes of extra due diligence.
And then make a journal entry of it.
Keep a diary.

And lo and behold, no one every did.

No one ever said, where's your license number?

No one ever said, how do you pull your permits?

No one ever said, how do you manage to oversee all those jobs and go to the bank every day?

And yet, it was common knowledge.

You could tell by the dates of the checks that I wrote that I had to be at the bank that day.

And yet, no one ever asked.

A lot of that is because the way compartmentalization works, especially at big firms, is such that, truly, the left hand does not know what the right hand is doing.

One auditor is doing your bank reconciliation.

Another one's looking at your inventory.

Another one's checking your receivables.

They don't talk to each other.

They don't look at each other.

They have no idea.

And they're in a hurry.

No one ever talk to our vendors because--

I can't stress enough-- we didn't have any, because they were all fake.

What I did was I invented six vendors.

One of them was a company that I owned, called Marvel

Management.

And the others were post office boxes.

I just went out and rented post office boxes, made up companies, made up invoices at the print shop.

And filled out the invoices and handed them to the auditors saying, I'm doing millions of dollars worth of work, with say, for example, this company I invented called

Tough Techs, a carpet company.

Then the auditors would mail verifications to the post office boxes that I had rented.

I would verify that they do all this business with me, and

I would send them back.

Virtually no due diligence was ever done on our vendors, because had they looked at our number one vendor, they would have found, by simply running a Dun and Bradstreet, or simply looking at the Secretary of State, looking at our DBA, they would have discovered that that corporation was mine.

None of the bogus vendors had any phone numbers.

Their invoices never had phone numbers on them.

Just an address, and the address said Suite 104, 106, instead of post office box, because most of the places I rented boxes from would allow you to do that.

No phone calls were ever made to a vendor.

And to the best of my knowledge, no attempt was ever make to go see one of the vendors.

And all of the vendors, supposedly, were within about a three square mile area, right there in the heart of

LA, so they could have-- actually, in the heart of the

San Fernando Valley, within blocks of the auditor's office box.

Blocks.

I think the biggest lesson that has to be learned is that, if for no other reason than there it doesn't even appear to be a conflict of interest, you must periodically bring in outsiders who have impunity from offending you.

Mark, we believe that our internal ethics group is good enough.

And you know what, they might be right.

But it's almost always the belief that the real loyalty that any internal auditor, any ethics person, or any compliance officer has is to the company that pays him his check, for god sakes.

And that's why I've often said, even if you think you can handle it all in house all the time, bring in an outsider who's got a fresh pair of eyes.

There's no nepotism.

There's no favoritism.

He's not worried about losing his job.

He's got a retainer with you.

He's going to get paid and then he's going to go away.

Those things are really necessary because one, they give comfort to the investors, to the shareholders.

Remember, they're the real ones that need these kind of protections.

And so we can pass new laws, we can have the

Sarbanes-Oxley, we can change the FASB recommendations, we can change a whole lot of things.

But until companies say, we have to be Caesar's wife.

We have to be above reproach.

And about the only way you can do that is to bring in someone whose loyalty is, hopefully, to the truth, instead of to keeping the company going.

And I think that that is, without a doubt, the biggest message.

The other messages is this.

Yes, there's a possibility that a corporate executive that does bad decisions might go to jail.

But that's not the real reason to fear.

We don't see our jails bursting with white collar guys.

And it's not even the money you can lose by running your business or spending a little bit more of your productivity on ethics and compliance.

The problem is that we've evolved to a point where your company can lose tens of billions of dollars in worth simply because of the way you handled something.

We've seen WorldCom lose over $100 billion in market cap.

Enron lose $90 billion.

Citigroup lose $50 billion.

These are serious numbers.

Those aren't fines or penalties.

That's what just dissolved because of the way the company handled certain issues.

And invariably in those issues, due diligence was involved.

So ethics were involved in the planning of it, or lack of ethics were involved in the planning of it.

A lack of due diligence on the people who were hired to do due diligence.

And a total lack of follow through.

Lastly, I would say to somebody, you have to have the personal courage and integrity to say, I will walk away from this job.

As much as I want it.

As much as I want my kids in private school, I will walk from this job if this activity continues.

I will be the whistleblower.

We cannot tolerate this and have it here.

And that is very different from what's been before.

And if there is a lesson to be learned by the recent scandals, and by the analysis that I bring to fraud prevention and fraud detection, it is that.

Well, I think the most important thing any individual can do is there are things they can do to indemnify themselves, to protect themselves.

And I should tell you, nobody else is going to do this for you.

Most people that are in federal prison today are in prison because a co-defendant told on them.

There is no honor among thieves.

And the way the system works, somebody goes, Mark, if you can give me a bigger name than you, you go to jail for less.

So how does a low person who doesn't really have anyone to give away, and might get blamed, how do they protect themselves?

And so what I tell every single accountant I meet to do is to do this thing that I developed about 10 years ago.

It's not brain surgery.

It's called the two minute drill.

And I say, every single day that you're at work, spend two minutes, only two minutes, doing some kind of extra due diligence.

Go online and check industry standards if you don't understand a company that you're doing auditing work for.

You're not really sure whether you're being told the truth.

Call a bank reference.

Check with Dun and Bradstreet.

Check to see if they're incorporated properly.

See if they pull the right permits for safety violations or whatever it might be.

See if they pay the proper sales tax.

Visit one of their vendors.

If anybody had driven by one of the Z Best vendors, they'd have see that it wasn't a vendor at all, that it was just a postal rental place.

Every day, do two minutes of extra due diligence.

And then make a journal entry of it.

Keep a diary.