Sunday, January 11, 2009

Walsh: This is the place to Ponzi

Calvinism with unique Utah twist: Riches as proof of righteousness

By Curmudgeon

Ms. R. Walsh has an interesting column up at the Salt Lake Tribune site. It compares Ponzi schemers Madoff and Southwick and finds a common element in their skulduggery:
But the men -- one convicted and the other accused of being a con artist -- had one thing in common. They recruited those they knew. It's the predictable stuff of a Ponzi scheme. What's unexpected are the social and psychological similarities between their bicoastal marks -- Utah Mormons and East Coast Jews. A sense of being special led both groups to fall for the oldest trick in the book.
Madoff found investors at the exclusive Palm Beach Country Club. Southwick found his at church. Madoff's victims paid the club's pricey fees for the chance to brush with the investment whiz and his proxies. Southwick used current and former Mormon bishops and kept a photo of his family with LDS Church President Thomas S. Monson in his office....
More than taking advantage of proximity, Madoff and Southwick plied a unique knowledge of their clients' culture and armchair psychology to get greed to kick in.... Southwick's subscribed to Utah's twist on Calvinism: Riches must be proof of righteousness.
Walsh's piece goes on to discuss some characteristics of Utah that she thinks make it a particularly fertile field for Ponzi schemers, and especially for those who hunt out their co-religionists as marks.

17 comments:

danny said...

Curm,

As a matter of fact, every con man uses connections and a call to the mark that they are "special". This is nothing new.

But this statement really irritates me:

"There's no repentance. He still goes to church. He's still got his temple recommend -- as if he didn't do a damn thing wrong,"

If this is true, I disagree with it. Temple recommends are supposed to go to people who are "honest in their dealings with their fellow men." If Southwick's bishop is handing recommends out to a convicted conman somebody should talk to him about that.

danny said...

In watching Obama's economic speech, I was impressed at how dynamic he is and how well he dresses up his old-time liberal clap trap.

But I suppose it's better to spend it on domestic clap trap than spending a trillion dollars in Iraq for next to nothing.

Anyway, I hope he turns out to be more wise than he sounds, like Clinton.

Curmudgeon said...

Danny:

One of the things I liked about the Walsh piece was her including comments from those who argue that con men are con men coast to coast, group to group, faith to faith, and nothing particularly unique about Utah in that regard. Turned her column into a conversation on the topic, not a screed. I like that. In Louisiana, we read about Baptist scammers feeding on the faithful. Same ol' same ol'. I recall the company... still in business I believe... that solicits "investments" [politely so called] from the Fundamentalist faithful to finance a search for oil in the Holy Land according to where [the company owners say] the bible says it can be found. Not a Ponzi scheme... so long as they actually look where they say the bible says to look, they're not breaking any laws. But still....

OgdenLover said...

Danny, I'm not sure who was being described here, Southwick or Hammons:
" Orrock isn't sure we've learned anything. An active Mormon, he is frustrated with all the institutions involved -- his church, the FBI, the Securities and Exchange Commission, the state. One of Southwick's partners, former Las Vegas bishop Bill Hammons, seems unfazed by the wreckage.
"There's no repentance. He still goes to church. He's still got his temple recommend -- as if he didn't do a damn thing wrong," Orrock says."


While we're on the subject, what about Godfrey's Bishop? How honest has Matt been in his dealings with the citizens of Ogden?

Laughing Out Loud said...

Curm is nuts and naive about Utah, himself a "carpetbagger" who has not "enjoyed the weekly Utah con artist and ponzi schemes" for at least thirty of more years. Utah has been Nationally recognized for many decades as "The Fraud Capital of America", oweing to its notoriously loose and exceptionally weak legal system. If Curm ever had a conversation with just about any lawyer in Utah he would learn these things. Utanans simply screw eachother in so many ways and so often being an attorney is like being a fighter pilot in a target rich environment.

I got a friend who along with his highly placed (sic in the LDS business) financial "thrice blessed" types---a code term used by Mormons typically ... like "desireous" and other nauseating phrases and terms from the biggest Mormon con artist of them all...Joseph Smith. Well...his friend calls all the "thrice blessed" and wealthy Mormon brethern "Rocky Mountain Jews". Now that just about sums it up...Madoff and Southwick.

What Calvinism, or John Calvin, has to do with anything is apparently a Curmudgeon mystery. Or just another badly used metaphor from the far far left.

Curmudgeon said...

Laughing:

Almost every state I've lived in [NY, Illinois, LA, and Utah --- Wisconsin the exception], the people there thought was one of the most corrupt in the Union, just as every city I've lived in, the people there thought their drivers were worse than anyone elses.

Scams by hucksters preying on the faithful [mostly Southern Baptists as I recall] were reported with some frequency in Louisiana for the 31 years I lived there. And all you have to do is turn on the TV to see a raft of non-Mormon scam artists preaching the "gospel of wealth," meaning if you "plant the seed of faith" by sending them money, god will reward you tenfold. [If god doesn't, they explain, you did not demonstrate sufficient trust in the lord with your gift; send more]. They're slime, but they're raking it in by the bucketful from the believers.

It may be true that Utah is particularly fertile grounds for hucksters. I don't know. Mostly I've just seen anecdotal claims, usually exaggerated like your claim of a "weekly Utah con artist and ponzi scheme" report. I've been here nearly eight years now, and the reports haven't come close to 52 a year.

ozboy said...

Danny

I believe it is pretty standard MoMo practice to EX any one who has been convicted of any crime. Being EX'd however is not the end of the world as the church will let one so EX'd back in if they repent and re-apply. In fact old holy Joe routinely EX'd people if they pissed him off, including his top leaders, and just as routinely re-admitted them after he cooled off. In any event I don't think any one will see Southwick in any temples any time soon unless they build one for him inside the joint.

And "Rocky Mountain Jews" what a hoot! There are quite a lot of similarities between Mormons and Jews. Mormons are the only people who think of Jews as Gentiles!

Skipper said...

There is another Ponzi application in our area. A sophisticated if unintentional Ponzi game with property taxes. It has recently come to light there may be millions of dollars of delinquent property taxes not being collected in Weber County while the people that do pay their property taxes on time, subsidize these delinquent accounts. The County response is it is not their fault, the Sate Tax code prevents them form collecting this money. This is nonsense, if you read the Utah Tax Code 59-2-1358, it provides the county with generous latitude to collect these taxes before the final process of foreclosure. The problem is that the final process takes about 4 and one half years and in the meantime, many of these accounts remain unpaid until sale of the property. In the current climate, it could be several years.

It appears the County just doesn't want to be bothered when they can just raise the mill rate (thus our taxes) or dip into a rainy day fund when they need money instead of collecting money already owed and delinquent. If anyone thinks is chump change, go to the Weber County Website and look at the delinquent property tax lists covering several years. As you read the lists, remember that if you pay your taxes on time, you are carrying these delinquent payers on your collective backs.

Why doesn't the County get off their duffs and develop a program to collect as much of this money as possible before they dip into reserve funds or raise our taxes?

Pistol Pete said...

Right on Skipper! To back up what skipper said, the Weber County Commission passed an ordinance in 2008 that is more aggressive about collecting delinquent property taxes from subdivision developers. It requires subdivision developers to pay their delinquent property taxes before any additional County services will be granted. This was a small first step, but a start in the right direction.

This proves the County can act proactively right now to collect delinquent taxes before foreclosure without any changes in the State Tax Code.

The County should now continue to pursue the collection of what appears to be a significant amount of money in delinquent taxes that would certainly benefit education, State, city and County jobs, and lift the burden from the rest of the tax paying public.

RudiZink said...

Now that the discussion has meandered to the topic of delinquent Utah property taxes, check out the article in this morning's Deseret News:

Some big names join list of tax delinquents

Looks like this issue is getting some public traction.

Bullet Bob Steele said...

I would suggest to all to go to the Weber County Website and review the delinquent property tax lists starting in 2008 and back for many years. You may be astounded at the amount of money owed, I was.

It is inconceivable that our Weber County leadership would not have a specific recovery program short of foreclosure to collect that money before the rest of us are asked to pony up more taxes.

Maybe someone should tell the County leaders that the on time taxpayers are the good guys!

Also remember that all this information is based on the Weber County Website and not someone's imagination.

Curmudgeon said...

And since we've meandered onto the WC commission, anyone know the status of the Powder Mt. Town appointment of town officials? Haven't heard a word about that in some time. Anyone know?

What will it costs us said...

So if we all don't pay our taxes next year on time, wait for the county to come to a grinding halt, layoffs, then maybe the commission will get off the dime and really make late taxes a hefty fine.

Speaking of layoffs why do city services suffer while city managers feel no pain. Lets layoff a few appointments, or bring in a head hunter to make city government more efficient. They want to run the city like a corporation, then study waste and inefficient practices. Cut out the waste in city hall should be the citizens mantra.

ozboy said...

Pistol & Skipper

I still think the non-payments are part of the bureaucrat's and politician's strategy to extract as much cash from the people as they can. The core of that is supported by the statement by the Davis Treasurer:

"Davis County Treasurer Mark Altom said some delinquencies may actually financially benefit counties because they earn higher interest than counties could obtain elsewhere. He said the state's Public Treasurer Investment Fund was earning about 2.77 interest in November, which is much lower than the 6.25 percent that counties will earn on delinquent 2008 property taxes."

These "loans" are about as secure as the counties can get as they are all backed by real property that is valued at much more than the underlying tax bills. The interest also compounds and applies to the penalties as well. The state laws that govern this also makes sure that the properties are sold before the tax bills, plus interest, exceed the value of the underlying property. The local governments always get their pound of flesh in the end.

Even tho the interest is more than the counties can get elsewhere, it is still a bit troubling that these large companies can take advantage of the situation by getting easy loans at less than they would pay to commercial lenders. Perhaps the fix would be a much higher rate for corporations while maintaining the status quo for truly troubled private home owners.

Pistol Pete said...

Ozboy, we read that too. It overlooks the fact that when revenues drop from other sources, the rest of us will pay the increased proprety taxes, or sales tax and yet they still refuse to go after the delinquent taxes that are already due. The fix described above may be a reasonable option.

The reason is obvious, they are protecting the Developer/Builder interests instead of the taxpayers.

This kind of "shell game" with taxpayers money is what landed this Country in the mess we are now.
It is indeed a County run "Ponzi" game.

Comptemptuous said...

"Chris Kyler, CEO, (sic CFO, and General Council) of the Utah Association of
Realtors, sounds quite animated as he counts off the many members of
his organization who hold high office in the state. "I've got people
who are on county commissions, mayors, state senators," Kyler says.
"Our lieutenant governor was president of our state association about
20 years ago. Our people are involved in the parties, too. We've got
precinct chairs and vice chairs and county delegates throughout the
state." Governing Magazine, June 2006


Your Property Taxes are a direct result of the near perfect scheme set up by Al Mansell and being protected by the 60% of legislators who are corrupted by URA lobby money. Utahans are being ruined by the fleecing these low lifes are perpetrating on all of us property owners.

To fix the problem throw them all out of office at every level. If Real Estate, Developer, or Mortgage Investment background, vote of another. Curtis is gone finally, but so many more remain "....who are on county commissions, mayors, state senators," Kyler says.

Go to:
http://governing.com/archive/2006/jun/realtors.txt

Your future depends upon it.

Skibo said...

It appears Jan Zogmaister tried to bluff her way through after it was exposed that the delinquent property taxes are almost ignored by the County as a revenue source. She did not do her homework on the State tax Code and made a fool of herself. This is another example of how poorly the citizens of this County are served by the current Weber County Commission. When these people come up for election, think change!

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