Understanding what makes people commit criminal acts is one of the first steps in improving security.  This is true for physical security and information security as well as financial matters. Employees as well as executives do not always understand where to draw the line. 

The convicted former Enron CFO is now admitting his sins to audiences — but also claiming that what other companies are doing today is “10 times worse” than what Enron did.

from CNN Money, By Peter Elkind, editor-at-large July 1, 2013

“Ladies and gentlemen, Mr. Andrew Fastow!”
He was an improbable Las Vegas headliner, taking the stage before a packed convention hall of 2,500 fraud examiners.

For former Enron CFO Andy Fastow, who spent more than five years in federal prison for his crimes, last week’s appearance before the Association of Certified Fraud Examiners was his most public step in an uphill redemptive journey — to explain how he became a “fraudster;” to sound provocative warnings about today’s corporate practices; and even to offer a bit of revisionism on the company’s 2001 collapse.

Fastow launched his talk with a broad mea culpa, introduced with a grim joke. “Several of you have commented to me that your organization has grown dramatically over the past 10 years,” he said. “And they thank me. They said no other individual has been more responsible for the growth of your industry than me. So: You’re welcome.”

The crowd roared.

“It’s not something I’m proud of,” he added soberly, after the laughter had died down.

Fastow was initially charged with 78 counts of fraud, mostly connected to his central role in a web of off-balance sheet entities that did business with Enron, disguised the company’s financial condition, and made Fastow tens of millions. He ultimately pled guilty to two counts, forfeited $30 million, and agreed to testify against his former bosses as a government witness.

Andy Fastow's prison i.d.

Since leaving prison in 2011 and resuming life with his wife Lea and two sons in Houston, where Enron was based, Fastow has kept a low profile. Now 51, he works 9-to-5 as a document-review clerk at the law firm that represented him in civil litigation.

Fastow has given 14 unpaid talks, mostly at universities, usually with no press allowed. The first came at the University of Colorado-Boulder. He volunteered to speak to students after reading a column on ethics by the dean of the business school. Fastow has also spoken at Tufts, Tulane, and Dartmouth and is scheduled to address a United Nations group in the fall.

In Las Vegas, dressed in a blazer and open shirt, Fastow stood at the podium a bit grim-faced, his speech sometimes halting. “I’m not used to giving talk to groups this big,” he explained. “I apologize to you if I feel nervous — if I appear nervous.”

“Why am I here?” he asked. “First of all, let me say I’m here because I’m guilty … I caused immeasurable damage … I can never repair that. But I try, by doing these presentations, especially by meeting with students or directors, to help them understand why I did the things I did, how I went down that path, and how they might think about things so they also don’t make the mistakes I made.”

“The last reason I’m here,” Fastow continued, “is because, in my opinion, the problem today is 10 times worse than when Enron had its implosion … The things that Enron did, and that I did, are being done today, and in many cases they’re being done in such a manner that makes me blush — and I was the CFO of Enron.” He cited the continuing widespread use of off-balance-sheet vehicles, as well as inflated financial assumptions embedded in corporate pension plans.

MORE: Big companies don’t have to lose their souls

Fastow said he was prosecuted “for not technically complying with certain securities rules” — but that wasn’t “the important reason why I’m guilty.” The “most egregious reason” for his culpability, he said, was that the transactions he spearheaded “intentionally created a false appearance of what Enron was — it made Enron look healthy when it really wasn’t.”

“Accounting rules and regulations and securities laws and regulation are vague,” Fastow explained. “They’re complex … What I did at Enron and what we tended to do as a company

[was] to view that complexity, that vagueness … not as a problem, but as an opportunity.” The only question was “do the rules allow it — or do the rules allow an interpretation that will allow it?”

Fastow insisted he got approval for every single deal — from lawyers, accountants, management, and directors — yet noted that Enron is still considered “the largest accounting fraud in history.” He asked rhetorically, “How can it be that you get approvals … and it’s still fraud?”

Because it was misleading, Fastow said — and he knew it. “I knew it was wrong,” he told the crowd. “I knew that what I was doing was misleading. But I didn’t think it was illegal. I thought: That’s how the game is played. You have a complex set of rules, and the objective is to use the rules to your advantage. And that was the mistake I made.”

After speaking for about 20 minutes, Fastow took questions. He insisted on this despite the trepidations of conference organizers. “A lot of people are still angry,” explained James Ratley, a former Dallas police department fraud investigator and the Austin-based group’s CEO. “I was cautious that someone would create a disturbance.”

The fraud group invites a “criminal speaker” to address its convention every year. But Fastow’s invitation drew unusually acidic comments on a LinkedIn message board. “A total slap in the face to all of the honest and respectable investigators that could be utilized as a presenter,” one person fulminated. “Just scum,” was another’s summary. “To be blunt,” a third person wrote, “I see him as a calculating low life, as bad as an armed robber who would shoot up a bank to get the people’s money.”

But Ratley dismissed the criticism. “If you’re a fraud examiner and you don’t want to deal with a fraud perpetrator, you ought to change professions.” Ratley said he had met with Fastow to screen him “for any type of evasiveness. He has not dodged, ducked, or blinked since I started talking with him.” ACFE made a point of noting prominently in promotional materials that Fastow was not paid to speak. (The group did cover his travel expenses).

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