Between the time that I left UBS in January 2005, and the time I surrendered to Taft Camp in April 2008, I sold real estate at Sotheby’s International Realty with my close friend, Sam Pompeo. I enjoyed working in real estate, and had I not created my new career from prison, I would be working in real estate right now.
Working as a real estate agent, prison consultant and corporate ethics speaker (I have addressed real estate offices, conventions, associations, etc), I’ve met scores of people who have built thriving careers in the real estate and the mortgage industry. At the top of this list is the aforementioned Sam Pompeo and Brock Harris of Brock Real Estate.
Unfortunately, too many agents and mortgage brokers fail to understand how one decision can imperil their career, reputation and freedom. Yesterday, I received a call from a real estate broker who told me his sad story of how his involvement in a shady transaction is leading him to federal prison for 13-months. His conviction has led to the loss of his income, reputation and family. He is struggling as he approaches his surrender to Lewisburg Federal Prison Camp.
The man’s name is Arnold. Arnold has read my books, read my blogs, and watched my videos. He encouraged me to share this story with hopes that others would benefit and take more immediate action than he did.
On our call, Arnold told me he represented a client who was purchasing an apartment building for just over a million dollars. In an effort to reduce the amount of taxes owed on the transaction, Arnold’s client offered to pay the seller $100,000 of the purchase price in cash and outside of escrow. The seller agreed to accept the cash payment, and Arnold facilitated the conspiracy by recording the real estate transaction at sale price of $1.1 million rather than the actual price of $1.2 million.
Arnold told me his motivation was to close the deal, earn a commission and please his client. He didn’t feel as if he did anything that was “that bad” like “burying inflated costs inside escrow” to pay vendors as other brokers do. We both knew, however, that he was experienced enough to understand that by recording a real estate transaction at less than the actual price, he was participating in a tax fraud. His actions, he also knew, distorted comps in the area. He also understood that other buyers and sellers would make future decisions of a sales price of $1.1 and not $1.2.
When discovered by the authorities, the seller of the apartment building cooperated with authorities against both Arnold and his buyer. The criminal prosecution that followed has been a life changer for Arnold.
Some take aways?
Arnold, like the majority of people who hire me, are not criminals. Sure, like me they have been convicted of crimes. Like me, they made decisions without considering how it would influence their future. Like me, they easily gave into rationalizations to close a deal. They are family men, professionals, small business owners. Yet as a consequence of their willingness to judge what they knew was right, they have lost so much.
What Arnold regretted most was his actions after he learned that he was being investigated. Rather than work openly with his lawyers, he held out that he was simply a middleman facilitating a deal between a willing buyer and seller. He focused on how his life was imploding and found it laughable that a measly $100,000 was really going to impact the states tax revenues. Prosecutors or the probation officer who wrote his PSR did not appreciate his attitude, he told me. He figured because he covered the $100,000 in restitution he would not be sent to prison.
Arnold might have signed a plea agreement, but he did very little to accept responsibility. He made it clear he was paying the money back to avoid imprisonment, not because it would help the healing process. He did not see the state tax collectors, who spend and waste with impunity, as victims.
It pained me to hear Arnold’s story. As a tax payer I loathe paying to warehouse people that do not need to be warehoused. He has already suffered enough. With or without prison, his actions will follow him for the rest of his life. He regrets, as I still do, not responding more appropriately at the early stages of the investigation.
Is a better life even possible, Justin?
Arnold was curious about life in prison. He wondered if at his age he would have the stamina to have a proactive routine. He, like many others, reminded me that it was easier for me because I went to prison at 33, without a wife and children. They would be correct. Still, the time away, at any age, can be productive, though I told him too few prisoners truly grasp what is possible.
How do some inmates pass the time, Justin?
Some, I told him, serve time by the hour. They watch the hands on the clock turn, always waiting for something. They wait for the next meal, for mail delivery, for one week to advance into the next, or the marking of another month. Others are stuck on the legislative watch, waiting for lawmakers to bring reform that will release them. Such a capitulation to the system did not work for me and I don’t recommend it for Arnold or any reader of my blog who will soon cross into the wrong side of prison boundaries.
How do some inmates succeed, Justin? How can I succeed?
Successful prisoners, I told him, do not let life pass them by. They create their own opportunities for a meaningful existence. Successful prisoners make decisions that are similar to those who lead optimal lives in any setting. I told Arnold that he should consider his time away like a sabbatical. The responsibility is on him to set the strategy by envisioning the manner in which he wants to emerge. If he can focus on an end goal, he will better understand how he can serve his time.
Lastly, I told him, he must ensure the time serves him, rather than feeling like he is serving time. He must make decisions that will enable him to feel stronger physically, emotionally, intellectually, and spiritually. With the right adjustment and strategy, I know it is possible. It will be my privilege to assist him.
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