[drpeter]

I just learned that Richard Hajjar, the CFO at Alden has pled guilty to embezzling around $30 Million from the company, over a period of a decade or so. Alden is beloved to many in this forum, and a manufacturer with a great tradition and reputation. I am deeply saddened by this horrific development.

This is life imitating art -- Hajjar resembles Jay Gatsby in some ways. He wanted to display wealth and fund lady friend Bianca de la Garza's businesses, so he lifted the money from the company he served and gave it to her. Apparently they were not romantically involved, but he was investing large sums of money in her ventures. Trimalchio in West Egg was the title considered initially by Scott Fitzgerald for what eventually became The Great Gatsby. And Trimalchio is a character in Petronius' Satyricon, with pretensions to wealth.

It has always mystified me that someone's integrity can collapse so far and so fast that a friend could be betrayed with so little thought. Hajjar was a longtime family friend of Arthur Tarlow Jr., the owner of Alden. And his trusted and valued employee, as CFO. Did none of that relationship matter to him?

The full story:

https://www.bostonmagazine.com/news/2021/07/13/richard-hajjar-bianca-de-la-garza-alden/

 

[challer]

Where were the auditors?

 

[eagle2250]

Sadly when the man at the helm is asleep at the wheel, bad crap such as that described in the article, happens...every time! Over the past couple of years, I've become increasingly convinced that every man/woman has his/her price. Sad, but true.

 

[drpeter]

Where were the auditors?

I am no accountant (just a run-of-the-mill academic scientist, LOL), but from the Boston magazine story, this is what I understand happened:

Before the annual year-end review, the money from a separate line of credit was transferred back into the general fund (or was it the Alden reserve fund?) by Hajjar, to make everything look normal. After that review, the money was repaid, back into the line of credit. Those of us here who are well-versed in financial matters and accounting can tell us whether this "year-end review" is tantamount to an audit, or whether the audit is something separate involving all of the financial operations at Alden, including that line of credit Hajjar drew on.

As a cognitive psychologist, I find human relationships to be complex and often difficult to fathom: Just what was it that Hajjar found so irresistible in Bianca de la Garza that he was compelled to behave with such utter lack of decency or integrity? People often ruin their lives in such obsessive attractions. One example is a woman who spent her entire life in obsessive pursuit of a man. The woman was Victor Hugo's daughter, and the tale is told beautifully by Francois Truffaut in The Story of Adele H.

 

[drpeter]

Sadly when the man at the helm is asleep at the wheel, bad crap such as that described in the article, happens...every time! Over the past couple of years, I've become increasingly convinced that every man/woman has his/her price. Sad, but true.

My dear Eagle, friendship has been the most important and consistent type of human relationship in my life. When other relationships vanish, one's true friends are always there. You have each other's back, always, as they teach you in the service. It is profoundly unthinkable to me to betray a friend, and Hajjar and Tarlow were long-time family friends. How could he have done that?

But I must admit your statement is right. I remember Noah Cross (magnifcently played by the great director John Huston) in Chinatown, telling Jake Gittes, "...most men never have to face the fact that at the right time, they're capable of...anything".

 

[eagle2250]

My dear Eagle, friendship has been the most important and consistent type of human relationship in my life. When other relationships vanish, one's true friends are always there. You have each other's back, always, as they teach you in the service. It is profoundly unthinkable to me to betray a friend, and Hajjar and Tarlow were long-time family friends. How could he have done that?

But I must admit your statement is right. I remember Noah Cross (magnifcently played by the great director John Huston) in Chinatown, telling Jake Gittes, "...most men never have to face the fact that at the right time, they're capable of...anything".

So well and eloquently put, my friend. Also, I'm going top have to find a copy of the movie Chinatown and watch it. Thank you.

 

[drpeter]

Thank you.

Chinatown is one of the best films in the noir genre, though it is not in black and white, LOL. It is a work of art, much more than a genre film because it works on so many different levels. This is also true of some of the "hard-boiled" crime writing that noir films are based on, especially the novels of Raymond Chandler -- I re-read all of them a couple of years ago.

The physical Chinatown stands in as a metaphor for the alien, the Other, in this film. It was literally the place where Jake Gittes, in his earlier life as a cop, hesitated to act. Almost nothing could be resolved because Chinatown was a foreign country to white cops. Every crime was complex and hard to get into, difficult to understand. Getting information was like pulling teeth. It was better to let things lie. And then, in the wider, white world of Gittes, Cross and others, we see the same complexity and the inscrutability of others that Gittes had been used to seeing in the physical Chinatown. In fact the penultimate line in the movie is "Forget it, Jake. It's Chinatown". A brilliant film, by any account. Just showed it in my film class this summer.

The sequel (The Two Jakes) is pretty bad, so you may want to avoid that.

 

[David J. Cooper]

It would have taken a couple of hours a month review a few bank statements to have prevented this sort of thing. I suppose the Tarlows realize that now.

 

[Dhaller]

Sadly when the man at the helm is asleep at the wheel, bad crap such as that described in the article, happens...every time! Over the past couple of years, I've become increasingly convinced that every man/woman has his/her price. Sad, but true.

Yes. I've been bitten by an embezzler before.

Sometimes, honestly, it just doesn't occur to you that someone could steal, but under the right (well, wrong) circumstances, I think *anyone* can... they may even feel they have a right to, or it's their duty. The human mind is a tangled forest.

I had a business partner embezzle from our firm back in 2003 or so. What I did not know was that her husband was unable to work due to his medical condition, and they were over-leveraged on some other deals. One day our operating account was $300,000 lighter. I handled it internally - no police - as she was an old friend, but the funds were never recovered, and the partnership was dissolved in a loss.

Since then I have a policy that I only do business with people I'd be willing to sue or have arrested; that, and I'm much more strict about financial controls in partnership agreements.

Blindsided! It's even easier when you're busy with other things, like growing the business.

DH

 

[drpeter]

That's a sobering tale, challer! I am amazed that she did not have to face any consequences for her actions. Did the rest of the people in that company go along with this?

 

[challer]

Embezzling is surprisingly easy if you don’t watch your books regularly. Few write themselves checks but hiring imaginary consultants or buying imaginary goods common. If someone gets a bit defensive when you want to understand every detail of the books, look harder.

 

[drpeter]

Update on Richard Hajjar: He was sentenced to 70 months in prison, and $60 million in restitution. Details are here:

https://www.bostonmagazine.com/news/2021/09/16/rick-hajjar-sentenced/

 

[richard warren]

To steal and speculate is to swim in the zeitgeist. As the chairman of he Fed recently said, “Apres nous, le deluge.”

Just kidding, he really said, “In the long run we’re all dead.”

Or maybe he just acts that way.

 

[drpeter]

To steal and speculate is to swim in the zeitgeist. As the chairman of he Fed recently said, "Apres nous, le deluge."

Just kidding, he really said, "In the long run we're all dead."

Or maybe he just acts that way.

Louis XIV and Keynes too! That is a stretch of macroeconomics that covers a broad swath, LOL.

 

[Tiger]

Louis XIV and Keynes too! That is a stretch of macroeconomics that covers a broad swath, LOL.

Sorry to nitpick, but I believe it was Louis XV...and so much superb commentary in this thread!

 

[drpeter]

Sorry to nitpick, but I believe it was Louis XV...and so much superb commentary in this thread!

I stand corrected! Thank you, Tiger. It's still a big stretch of economics...

 

[127.72 MHz]

One has to suppose that the time Hajjar spends in prison will ensure that he's never in a position to commit a crime like this again.

My guess is that no one will ever see the $60 million in restitution,...

I have to feel for the family who owns Alden.