Ethics: perspective of a felon


By Jerome Mayne                        © Copyright, Jerome Mayne 2005


Does it come as a big surprise that a convicted felon—indeed, a white collar criminal—would have
developed some thoughts about the topic of ethics?  Probably not.  Since my conviction I have had plenty of
time to ponder the idea of ethics, and I’ve conducted some research on my own about the subject.  In doing
so, I’ve received tons of advice.  I must say, I wish I’d had this information at the beginning of my career.

Prisons are full of people who feel the justice system failed them.  For some reason, they think they shouldn’
t be there.  I thought the same thing when I was in prison.  The truth is, I and my fellow inmates did
everything right to get ourselves into prison.  We did precisely the wrong things, in precisely the right order,
at precisely the wrong time.  And there we were.

So I came to the conclusion that it wasn’t the system; it was me.

In 1999 I began serving a 21 month federal prison sentence for conspiracy to commit mail and wire fraud.  
The crime involved four real estate investors submitting fraudulent documentation in order to get approved
for residential home loans.  Ultimately, these individuals took the equity out of the properties.  Payments
were never made on the loans, which caused the bank to foreclose on the property and incur thousands of
dollars in losses.

I was their unsuspecting loan officer.  After the first few transactions, I knew in my heart that some of the
documents I was receiving were fakes.  I didn’t say anything.  I justified my silence and inaction by telling
myself that verifying all documents was not my job. I wasn’t sure if they were fakes, I told myself.  Who was I
to accuse someone of fraud if I wasn’t sure?

Over the course of about nine months, my justifications continued far past any rational point.  The proverbial
“gray area” became black.  Toward the end of my involvement with these four individuals, I actually got
involved in the purchase and sale of one of the properties, and participated in reaping the profits.

To make matters worse for myself, occasionally I would be given a couple hundred dollars under the table
after I completed transactions.  I told my self that these were “tips” for doing such a good job.  My co-
conspirators probably called it “hush money.”  The FBI called it “criminal activity.”  The United States
government had the final word, and they called me “guilty.”

I have been told by some people that my crime was “fraud lite.”  Some have said that I was unlucky; wrong
place at the wrong time.  Well, there is no such thing as fraud lite, and luck has nothing do with making the
right decisions.  I committed a crime.  I am not proud of it and I’m certainly no hero for talking about it now.

However, there is an ethics lesson to be learned in all of this.

Dictionary.com defines ethics as “a set of principals of right conduct.”  So, in order to have ethics, someone
or something has to list out some principals of conduct that they deem to be “right.”  This could be an
employer, a trade association or our government.  (In the case of our government, this list is called “the
law.”)

Employers get to decide this right conduct because, well, it’s ultimately their money and reputation at stake.  
Trade associations enact Codes of Ethics because they want to protect the image of their collective
professions in the eyes of their current and potential client base.  If you don’t agree with their principals of
correct conduct, you are always free to start your own company or get out of the association.

For the most part the laws enacted by our government are designed to protect.  Another way to look at it is:
laws are the principals of correct conduct to follow when you’re not at work or part of a trade association.

Some principals of correct conduct overlap between different entities.  Occasionally, people get confused
about which entity’s rules or conduct they are to follow at what time.  Things can really get confusing when
we witness routine violations of the principals of correct conduct by fellow employees, association members,
or citizens without immediate consequence.

If ethics is a set of principals of right conduct set forth by someone or something, how can general business
ethics be taught?  My understanding of being ethical was that you base your decision to do or not to do
something on the feeling you get in your stomach.  If that’s the case, how do you teach “stomach feeling” to
someone?

Perhaps this logic is what led me astray.

It was nice to finally understand that ethics is more than just a feeling and, that it is actually a set of
principals of correct conduct set forth by someone or something.  But this still didn’t solve my dilemma.  In a
business’ Code of Ethics, you can’t possibly account for every situation.  For every principal of correct
conduct; for every “right” way to act in one situation, there is another, different situation that follows, that
may require yet a different “right” way to act.

It reminded me of trying to teach my children not to say bad words.  If I tried to give them a list of forbidden
words, I felt that my list couldn’t possibly be thorough enough.  The list would be too long and if I missed
one, the lesson would be incomplete.  I could always add new words to the list as they came up, but then
that would be, “making up rules as I go along,” and I don’t want to teach them that lesson either.

If you don’t have kids, you’ve at least been a kid at one point, so I think you’ll be able to relate to one of my
child-ethics lesson opportunities.

I was traveling in my car with my boys, four and seven years old.  In the rear-view mirror I saw the older one
punch the younger one on the arm.  The young one howled, “aaahhhhhhhhooooooowwwww-auh!”  I said,
“Hey!  Don’t punch your brother.”  Immediately, the older one slapped his little brother in the arm.  I said,
“Don’t slap your brother either.”  This was followed by a poke, which I followed with, “don’t poke.”  A tickle –
“Don’t tickle.”  Then just a touch.  Finally, I said, “keep your hands to yourself.  Period!”  The instigator was
reduced to leveling a taunting glare at his younger sibling.

This could have gone on for hours.  I finally gave them the ol’, “Don’t make me come back there!”  (Which of
course makes no sense since, I was driving.)

Aren’t there simply too many variable situations in the real world?  Yes, but ethics isn’t about situations.  It is
about people and their characteristic behavior.

Ethics doesn’t stand for “what to do.”  It stands for how to behave.  Finally understanding this made ethics
less confusing for me.   Not crystal clear, just less confusing.  If you have ever had confusion about ethics, I
hope this helps you too.

Here are my theories.

For employers and leaders, it is imperative that you have a set of principals of right conduct.  But to simply
disseminate this information in printed format will not be enough.  Ethics or behaviors, are best conveyed by
example.  Additionally, violations of ethical standards must be dealt with and not overlooked, or the unethical
behavior will become business as usual.

If you are a member of an organization that adopts a code of ethics, read the printed words and follow the
examples of the leadership.  Pay attention to the feelings in your stomach.  They may not tell you exactly
what to do, but it may serve as a red flag.  Remember, justifying questionable behavior is nothing more than
being dishonest with yourself.

Lead your ethics model by example.  Follow your ethics model with honesty.

Back in 1994, when my criminal involvement with the real estate investors was becoming clear to my boss,
he taught me a valuable lesson.  He was talking about my behavior, and its reflection on my character, when
he said, “The appearance of impropriety is as bad as impropriety itself.”  Not a bad golden rule.

Ethics may be a confusing area because it has to cover so many situations.  But confusing does not mean
impossible.

Take my experiences and words for what they’re worth, coming from a convicted felon.  Strive to be honest,
diligent, and consistent.  Society, your company, your family, and your children need you to stay out of
prison.




Jerome Mayne is President and founder of Fraudcon, Inc., a fraud deterrent company.  He is a frequent
columnist in the Mortgage Press and author of the book titled, Life Saving Lessons – the diary of a white
collar criminal.  As a national keynote speaker and consultant, he has worked with dozens of finance trade
associations and Fortune 500 companies to inspire ethical behavior.  He was recently a guest speaker at
Hamline University, MBA program, in Minneapolis, Minnesota.

He encourages you to contact him at jmayne@fraudcon.com or visit www.fraudcon.com.