We spend a lot of time suing embezzlers. All over the world. Week in and week out. Big embezzlers, small embezzlers, smart embezzlers and very smart embezzlers…

That’s right, no dumb embezzlers because almost all the embezzlers we encounter are smart. Some are very smart. Some are brilliant.

And, almost always, most would have made more money and had a more profitable career if they had simply stopped stealing and starting working honestly.

I mean, figure it out. An embezzler has to not only do his or her job well so that no one is looking over his or her shoulder but has to do their job so well that they can steal for months or years and it won’t show up. They have to be charismatic and knowledgeable enough so that no one bothers to double check their work. They have to be very steady in their work so that it cannot be reviewed because they are on vacation or ill…in short, they have to be great employees. And either so boring that all ignore their existence or so well liked that no one would question their character. Most choose the latter mode since it also allows access to more accounts and financial secrets.

And when embezzlers run entire companies, they have to create a bottom line successful enough for long enough that investors and business colleagues respect and trust them after review of the books…at least for a time.

Took me a long time to figure that out…for the first few years of practice, I found it incredible that such brilliant and attractive people would be dumb enough to risk it all for the relatively paltry gains that embezzlement can earn. I kept looking to see the underlying motivations since, I figured, I could better advise clients what to look out for if I could figure out precisely what makes an embezzler embezzle.

Now I know.

They embezzle because they like it. They like the rush. They need money now, not in five years. They like being smarter than the drudges they figure are around them. And they embezzle, I am convinced, because they want to get caught sooner or later and that pattern is usually repeated over and over.

Take one of my favorite embezzlers, a guy who once owned the famous Flamingo Hotel in California until his world crumbled around him during a case our client brought against him in the late 1970’s. I had represented a minority shareholder in the venture and after perhaps a year of very aggressive litigation, Eddie Chan (not his real name) called it quits, transferred the shell of a company that was left to my client along with most of the rest of his assets, settled for a suspended sentence with the district attorney (to my fury) and then called me to invite me to lunch.

I had only been practicing for five years at the time and was unused to the foibles of opposing parties. I was nonplussed and immediately called his counsel to ask if that would be OK…as required by the Code of Ethics.

“Sure,” the relatively famous criminal defense attorney chirped, “and tell him to pay my bill while you’re at it.”

So there I was two days later with Eddie at his favorite Italian restaurant, Orsi, watching him fiddle with his fettuccini, his hands nervously twitching every so often, but immaculately dressed in a conservative business suit, expensive cufflinks and watch, the picture of a successful and conservative business man.

He had greeted me in a rather distracted manner, looking about the room, but friendly enough. Since I had been instrumental in destroying his economic well-being, and since he knew I had been demanding his incarceration for his embezzlement with the district attorney, I wondered why we were having this lunch. Cautious, I figured I’d let him tell me. And, in turn, I’d try to figure out what made him tick.

The waiters all knew him. He was a regular and his waistline showed it. Friendly but not effusive, soft-spoken and understated, he appeared now as he had been throughout the trial…a typical intelligent businessman slightly shocked that people were upset with him, but just maybe a hint of irony somehow mixed into his replies. On the stand he had been asked what he had done with the money.

“Spent it. I have none left. If I did, perhaps I would pay it back.”

“On what did you spend it? Are those assets in the United States at this time?"

He had stared at me for a moment, knowing I was looking for assets to attach, then suddenly smiled sadly. “I spent it on sweet, stupid things that make life an appropriate journey. Little things with some elegance attached. Things only worth buying because they have little value in the long run. Like life, itself.”

There was some laughter in the court room but my client had begun to mutter darkly at my side, furious that these “little things” had bankrupted the hotel. As I sat there in that elegant restaurant, I decided that he had, for once, been telling the truth.

“Is this lunch a little elegant thing to make life bearable, Eddie?” I now asked.

I thought he would smile but he looked at me steadily for the first time that afternoon. After a moment’s silence, he said softly, “Your courts are not used to hearing an honest statement, are they?”

“What's that? You’re telling me that you spent it all, nothing is left?”

“You are still cross-examining me. You are still looking for assets. I am speaking of honest answers. Of course I spent it. Why else take it? Money taken like that should not be spent on necessities of life but on luxuries of life. Necessities of life are the proper destination of grim jobs with little men working at little desks.”

He waved to the water to refill his wine glass. I was suddenly reminded of the movie Casablanca in the coffee house with Sidney Greenstreet making a deal. I was also angry. “Those little people were your victims, Eddie. They work years and you take what they make and bankrupt businesses left and right. For luxuries.”

“Of course I do. You are stating the obvious. What you are not stating is why it matters so much to arouse such passion. I am the one losing all. Not you and not your client. Do I appear upset?”

He didn’t. He appeared bemused, not upset. He leaned forward. “Look, that is the past and I want to move forward. I want this to be a constructive meeting.”

“Meeting? Constructive meeting?”

“Yes, I have an opportunity. You represent many clients who might be interested. It should be very profitable.”

And for the next ten minutes he explained in some detail a new business venture he was considering involving Hong Kong property. Finally I could take it no longer.

“Look, Eddie,” I interrupted, “I can’t believe this. I’m the guy who wanted you in jail. Remember? I know you and your past. You seem to think I’d tell my clients to invest in you. Are you nuts?”

He was shocked. “Of course you would. You already know who I am and what I do. You don’t have to worry about checking out my background. You can build all the safeguards you need. This isn’t about me. It’s about the deal. If it’s a good deal, you should jump at it. Better the thief you know than the thief you don’t know. This is a perfect opportunity for you. Who else would think of investing with me?” And off he went again with his business plan.

I pushed my cannelloni around while he expounded on the future of Hong Kong and when he finally wound down, asked, “Does it not occur to you that people want to do business with honest people they can trust? Not dishonest people they have to watch?”

He became exasperated. “Didn’t you tell your client you have to create checks and balances in the company and watch each and every employee?”

“Yes, but…”

“And don’t you insist on systems being created in every company so that no one can get away with cooking the books or taking from the company no matter who is in charge?”


“Then what difference does it make if someone you don’t trust is involved? You don’t trust anyone anyway. If your systems work, they work. I am not any more of a danger to you than any other person. I don’t see the problem.”

And he didn’t see a problem. Either with his plan or his actions--except that he was caught. Oh, perhaps a little guilt now and then…but nothing that good wine could not assuage. Business was business, and his was stealing if he could get away with it.

There was a certain splendor in his lack of hypocrisy, a certain attraction in his blunt appraisal of his own role.

But I would not recommend business with him to anyone.

Since what Eddie didn’t understand is that people are not only in business for the money. Oh, it’s important, but it’s never just the money in my experience. It’s a dozen other things, the joy of creating something from nothing, the excitement of success, the comradeship one gets from working in a team that is good and effective, etc, etc.

Business may be competitive, but there are rules and it is not war.

To Eddie, business was not only war, but war with the only rules being do not get caught if you can and make all the money you can. And trust no one.

I had another client about the same time, an elderly business man disliked by almost all that knew him, a truly unpleasant individual who never praised anyone, made more money than anyone I knew and could be cast as Scrooge except for his enjoyment of fishing which was all that he truly cared about other than money. But honest…he often would give more to the other side in the bargain than they asked because it was better business tactics to have a vendor who was making good money with you than not. During a break in a negotiation I told him about Eddie, laughing.

He didn’t think it was funny.

“Eddie’s just more honest than a lot of the business men I know. Get the money any way you can, any time you can, short-term thinking, everyone is a crook anyway, so what’s the big deal? I know a lot of people like that. They think they’re smart. They’re not. They grab a nickel here and lose a dollar in the long run. Like him…but he’s just crude and a little stupid.”


“The smarter ones do it legally.” He grinned and the negotiation began again.

Eddie died about three years later. I read in the papers that his funeral was well-attended, even by some of his newly created victims. Perhaps they were gloating. Or perhaps they liked him.

Because, all in all, he was a pretty nice guy. Being a nice guy is how he made his living, after all. Who would entrust their money to a grouch?