Where's My Money? Just Remember, "A Very Simple Old Scam Can Still Fool Smart People."
Bernie Madoff's in jail after pleading guilty to all charges. Closer to home, Allen Stanford's pleading the Fifth. So better now than never, seemed like a good time to catch up with Randy Johnston, a Dallas financial malpractice lawyer and the author of Robbed at Pen Point -- and a guy who predicts we're merely at the tip of the Ponzi scheme iceberg. Says Johnson, just you watch: More Madoffs and Stanfords will emerge as more and more folks withdraw what's left of their their investments. On radio shows and in op-ed columns of late, Johnston's making the case for suing the auditors and attorneys who made the scams possible.
"We're not through with this," he tells Unfair Park. "I said it after Madoff and I'll say it after Stanford. I opened up The Wall Street Journal [recently], and there was literally a different scam reported on each of the first four pages."
After the jump, a word of advice -- and a warning.
Could you talk a little bit about what can be learned from these financial schemes?
A very simple old scam can still fool smart people. The bottom line is, there's nobody out there that cares as much about taking care of your money as you do. Everyone says, "Well, I just trusted ..." That's a problem. We have too much uninformed trust going on. We've dropped all the relevant regulations, and during the past six to eight years, under the guidance of Republican judges and the former administration, they modified the rules governing class action so as to make it nearly impossible to file a class action suit. They did that in response to abuses, but they've thrown the baby out with the bath water.
One of the reasons people are more gullible is because they're less experienced. We've had a tremendous shifting of wealth from the World War II generation that saved the old-fashioned way into the hands of Baby Boomers who have never had experience managing money and are into instant gratification. We have become a society that worships wealth, and when you elevate wealth to the only litmus test of being a member of the human family, then people will lie and steal and defraud and be revered for their bad acts.
We used to honor people who were hardworking, people who had talent. The fact that they became wealthy was great, but what we revered was their talent. And, people are more than willing to go over to the dark side when they see they're not punished.
Talk about why you think the best way to deal with this is to go after the people you call the "enablers," the lawyers and accountants who helped these guys pull off their scams.
You've got to be able to sue them. There are lawsuits that are possible -- every one of these people needs to be held accountable. None of this is possible without the active participation of accountants, mortgage lenders, lawyers. There's always a key group of people who help them pull it off. Take [drug kingpin] Pablo Escobar: They caught him by going around and capturing all of the people who helped him, and in the end he was left alone. The same thing needs to be done in a less violent way to these business enablers.
Is that actually happening?
I think its too early to tell whether we're going to succeed in that, but that's what needs to happen.
Have you found any victims who are willing to move forward with lawsuits?
I'm looking at it. I haven't filed anything yet. Right now everything is up in the air.
What advice would you give someone who's been defrauded?
Find a lawyer who specializes in this kind of litigation and go after them. There will be people who get some of their money back. It is possible; the biggest problem is finding someone to collect from. Even if you capture all the crap they bought with your money, it's gonna bring a lot less money than they spent on it.