I’ve debated for a couple of days about posting this item, but since it was still nagging at me, I figured it was sufficiently interesting to be worthy of your attention.
By way of background, Frank Abagnale of book and later movie “Catch Me if You Can” fame, can lay claim to having been one of the most creative con men of all time. His exploits include passing phony checks in every state and 26 foreign countries and conning his way into a variety of jobs, including pediatrician, assistant attorney general, professor, and pilot, all while in his teens. He is now a consultant to the FBI and corporations on preventing check and other document fraud.
Some excerpts from a recent interview with ComputerWorld follow. His comments about computer technology are relevant to financial technology. He illustrates how, just as we have seen with, say, mortgage approvals, efficiency has been given priority over integrity of the system:
Suppose you’d been born in 1990. How much of what you got away with 40 years ago do you think you’d be able to get away with as a 17-year-old today? It would be 4,000 times easier to do today, what I did 40 years ago, and I probably wouldn’t go to prison for it. Technology breeds crime — it always has, it always will. When I forged checks 40 years ago, it required a $1 million printing press that required three journeymen printers to operate. I had to build scaffolding on the side of it so I could operate it by myself. There were color separations, negatives, plates, typesetting chemicals.
Today, I sit down at a laptop, pick any company I want, go to their Web site, capture their logo, like American Airlines. I put it up on a check with a 747 in the background taking off. Fifteen minutes later, I have the most beautiful American Airlines check you’ve ever seen — probably 10 times better than the check American Airlines uses.
Forty years ago, I wouldn’t know who signs American’s checks; I wouldn’t know where American Airlines keeps its accounts payable account. Today, I would just call their accounts receivable, ask them for their wiring instructions. They’d tell me where they bank, on what street in what city, what their account number is. I call back and ask for a copy of their annual report, and on page three will be the signature of their chairman of the board, the CEO, the CFO, the treasurer. I scan it onto glossy white paper, with camera-ready art — and I have the check. A world of too much information and the technology make it very easy to do today what I did 40 years ago…..
Is there anything we can do to make illicit computer-related activity a less attractive pursuit for young people? There are about four reasons why we have crime to begin with. One of them is, of course, that we live in an extremely unethical society. We live in a society that doesn’t teach ethics at home, a society that doesn’t teach ethics in school because the teacher would be accused of teaching morality. We live in a society where you can’t find a four-year college course on ethics. I have three sons who went through graduate school; only the one who went to law school had a course even offered on ethics. So today you have a lot of young people who have no character, no ethics and they find no problem in defrauding somebody or stealing from somebody or cheating somebody. Until we change that, crime is just going to get easier, faster, more global, harder to detect.
I’ve spent 32 years at the FBI, and I’ve witnessed crime only got a lot easier to do. Obviously, there’s a lot less threat of being caught. When I was caught, I was just a teenager, and they sent me to prison for five years. Today, I’d probably get probation and community service; I might get 18 months and serve six months in jail. So there really is no threat of going to prison to keep somebody in line.
I really think the more technology there is in the world, the more you have to instill character and ethics. You can build all the security systems in the world; you can build the most sophisticated technology, and all it takes is one weak link — someone who operates that technology — to bring it all down. People don’t like to talk about that issue, because they think it’s over-simplified. But the fact is, in all my experience, that’s where the problem lies. Until that changes, crime is always going to be with us.
Any thoughts on how we can bring that change about? I think you need to bring character and ethics back into schools, and you certainly need to bring it back into colleges and universities as part of a curriculum. Only about half of Fortune 500 companies even have a code of ethics or code of conduct. The ones that do have one publish it every five years on an inside page of their annual report to appease their shareholders. So, obviously, there’s no big effort out there to bring about that change. Rutgers just finished a five-year study that found that 56% of MBA students cheated.
There are really no con men anymore like there were in my day, because you really don’t have to associate with anyone. You don’t have to be well dressed and well groomed and well spoken.
Everything’s done on a computer; there are no witnesses. So even if you know who’s doing it, you probably don’t have the ability to go capture them. Chances are you have no idea what they look like; they can sit in their pajamas and commit all these crimes….
How are we doing domestically? We have a lot of stupid laws. There’s Check 21 [the Check Clearing for the 21st Century Act, which requires banks to accept paper documents with check images in place of original paper checks] — the whole concept is ridiculous. Basically, what happens today is you give me a check for $2,500. I take the check and alter it to $25,000; I go to my bank and deposit it. My bank takes an image of it, which is a 600 dpi black-and-white copier image. It transmits that to your bank; they pay it, then they physically destroy the check. A month later, you reconcile and your auditor goes, “You wrote Abagnale a check for $2,500, obviously Abagnale has altered the check.” So you sign an affidavit to your bank saying this is a forgery, the physical check has been altered. Under Check 21, they have to go back to the first bank of deposit, which is my bank. They tell my bank, “You have to give us some money back, this is a forged check, we have an affidavit from our client.” Then, of course, the bank calls me and they say, “Computerworld said they gave you a check for $2,500 and you altered it to $25,000.” I say, “They did? Do you have the check? No? Talk to you later.” There is no evidence — it’s just absurd. There are a lot of stupid laws passed every day. I always say, criminals must have lobbyists in Washington.