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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.
