He stole millions from unsuspecting investors and got three years in prison. Is it enough?

The funny thing about criminals is that they always think they can get away with it. Take, for example, the story of Michael Hicks, a Cincinnati man convicted of mail fraud as part of a Kentucky oil investment scheme that bilked over 200 victims out of the not so small amount of $3 million.

Hicks, who was sentenced to three years in federal prison, admitted that he willingly went along with the deception, which convinced hapless investors to give up their hard earned cash and invest it in oil production—not a bad investment on honest terms, but when presented with inflated numbers and fraudulent guarantees, (let alone unethical motivations), it spelled disaster for those with the cash to spend.

There’s no doubt that members of the scheme knew they were into some heavy wrong-doing—otherwise why would they, according to investigators, fail to disclose facts and risks about the investments, as well as attempting to avoid detection by using fake names, changing their company name, and changing addresses through a dizzying array of cities such as Los Angeles, Bowling Green, Covington, Louisville, and Nashville.

Hicks, for his part, plead guilty and admitted opening bank accounts in several different names, managing several different addresses in different names, cashed or deposited the investor checks, and then withdrew the funds and sent them to his co-defendant and half-brother, John Westine, in California. Westine, as well as a handful of other co-conspirators, have all been found guilty of charges ranging from money laundering to securities fraud.

Not only must Hicks serve at least 85 percent of his three year prison sentence as a stipulation of his punishment, he will also be subject to probation for three years upon release. His victims, having lost all or almost all of their ill-fated investments, will receive court-ordered restitution from Hicks as well.

Is three years enough? Did Hicks truly believe they would never be caught, or did he think a few years of living big would be worth the pain and hassle of living in a federal prison?

The way our justice system doles out punishment is a bit of a mystery to me, no doubt punctuated by the fact I have never studied law or had a personal run in with the law myself. Recently I heard the story of a man who was sentenced to three years in prison for a different kind of crime. This man retired after decades as a well-respected firefighter, had a wife, kids, and grandkids, and no previous criminal record other than DUI related charges.

What he did have was an alcohol problem.

How Scammers Are Using Technology To Get Ahead


Age old scams don’t look the same way they once did – fake checks, mass mailers, and the wandering snake oil salesman are relics of the past as scammers turn to technology to stay hidden while getting ahead.

But while you might have noticed a mass of e-mails selling you things you never knew existed, let alone asked for, that barely begins to scratch the surface of how scammers are using technology to get your information.

To stay ahead of the curve and keep yourself protected, here’s what’s worth looking out for when it comes to scammers and technology.

They Skim Your Card

Card skimmers aren’t anything new unto themselves, but they’ve become almost unrecognizable. Skimmers these days can be placed over the card slot so securely that a simple jiggle won’t shake them loose, and with such a convincing cover that you would be hard pressed to catch the scam.

They can also go directly into the card slot, often so small that the most you’ll see of them once they’re in there are a few hair-sized fibers hanging down, and that’s if you know what you’re looking for.

Meanwhile, PIN capture overlay devices can look exactly like your ATM’s keypad, and be fastened out so tight that you’d never notice it wasn’t supposed to be there. Some skimmers are so advanced that they can send an SMS message to the scammer each time it’s collected new card information.

Scammers are getting increasingly clever with the placement of these devices, too. While they’ll probably always be seen as ATM skimmers, they’re going over card readers at gas stations, swipe entries in front of banks, and on any pad attached to self-service technology.

These pose a big risk to your financial security – giving scammers access to drain your account and even to potentially throw it into overdraft. If the information was taken from an independently owned, non-bank affiliated ATM, you could have a hard time getting your cash back. With no bank security programming backing them, these ATMs don’t necessarily have any responsibility toward customer reimbursement.

While skimmers are getting increasingly harder to find, the advice has remained largely the same:

  • Use bank ATMs whenever possible
  • Trust areas with security cameras first
  • Look for any signs of tampering like heave wear around the reader
  • If it looks even a little suspicious, don’t use it

They Take Over Social Media

You’ve seen them before – a story pops up in your Facebook feed talking about government grants or instant lottery winnings. These are classic twists on more well-known e-mail scams, with scammers knowing two things: first, you trust social media connections more than an e-mail from a stranger. Second, if they work in small enough increments, targets are more likely to bite.

You’ll see something that says you can win $1,000 instantly – just click to play. You follow the link and surprise! You’re the lucky winner. To claim your money, all you have to do is pay $50 or $100 processing fee.

Here’s the deal – you should never have to pay to claim a cash prize. Likewise, you can’t win a contest you didn’t enter. Scammers are using more widely checked and trusted methods like social media to get the scam out there, and they trust a common-sense threshold to get your attention. A thousand dollars seems far more likely than thirty-two million in terms of realistic winnings, so they’re adapting those lower numbers to draw victims in. It’s still a scam, though, and it could still have you at a loss if you fall for it.

Another common version has you paying for followers or likes. The numbers will add up, but they won’t be from real people or accounts. You’ won’t get any more traction or attention than you had previously, and you’ll be out what you paid plus the integrity of your account.

They Make You the Scammer

You won’t benefit from the information or money that they’re pulling in, but scammers can hijack your name and phone number to useas caller ID information for phone scams. This puts one more layer in between intended targets and the scammers, and it leaves you with the unfortunate fallout of angry callers wanting to know how you got their information, and possibly threatening to turn you into the police.

These are the often unheard victims in telemarketing scams – their information is used to disguise the true number and location of the scammer, and where targets have the option of simply letting the auto dialer roll over to the next number, you’re stuck with angry victims calling you back day and night.

There aren’t too many preventative measures you can take on an individual level, thought eh FTC is pushing for tighter regulation to make spoofing more difficult, but if you ever find yourself on the other end, you have the option of temporarily disconnecting your number, or getting a third party VoIP carrier that only lets certain number through to your phone.

They Make You Believe You’re Getting What You Want

This is at the heart of most scams, but technology has made it easier than ever for scammers to convince you that they’re the product, service, or person that you’re really looking for. Many scammers impersonate legitimate online service companies such as Netflix, copying their site and stealing your ID through their login or sign up screen.

The same is common with online job applications – the scammer clones a legitimate site and pulls personal or financial information when you apply, or otherwise gets you caught up as an unsuspecting player in a larger scheme, often unknowingly forwarding laundered money or illicit packages.

Not even your heart is safe – scammers are taking to online dating apps and wooing unsuspecting victims before asking for pay to come see their newfound love. Once you forward the money for the ticket, both your cash and your date are never to be seen again.

The technology may be new, but the heart of the scams are always the same. Don’t let a more high-tech front fool you. Stay on the watch for suspicious activity and you’ll be able to keep your money and your information safe both online and in real life.

The Types of Fraudulent Activities That Plague U.S. Business

According to the Association of Certified Fraud Examiners, a typical organization loses 5% of its annual revenue to various types of fraudulent activity. Fraud occurs at all levels of organizations. From underlings to owners, there are many ways an employee can misuse and abuse the system. Whether you’re a manager or a new hire, it’s always good to know the signs of occupational fraud in your workplace. Here are three of the main types of fraud to keep an eye out for.

Fraudulent Activity: Asset Misappropriation

A common type of fraudulent activity, asset misappropriation pertains largely to different types of theft within an organization, including:

  • Check forgery – Essentially, an employee takes checks and signs them in a name that is now their own in order to cash them and make off with the funds before the victim of the fraud knows what happened.
  • Theft of money – From stealing from the company’s petty cash box to raiding the register after closing up shop, this is a common form of asset misappropriation.
  • Inventory theft – This can include stealing supplies, equipment or merchandise from an organization.
  • Payroll fraud – This can take on a number of forms, including one co-worker punching another co-worker in/out even if he or she is absent, an accounting department creating a “ghost employee” and depositing the fake employee’s cash into their own accounts, or even an employee padding a time sheet to clock in more hours than he or she actually worked.
  • Theft of services – Some of the most common everyday examples of this type of theft can be illustrated by the classic “dine-and-dash” or “turnstyle-jumping” scenarios. Essentially, someone takes advantage of a service without paying for it.

Asset misappropriate is far and away the most common type of organizational fraud, accounting for more than 91% of fraud schemes, however it is also the least expenses type of organizational fraud when considered on a per-fraud basis.

Fraudulent Activity: Bribery and Corruption

There are dozens, if not hundreds of famous examples of this type of fraud, and it can be much more costly than asset misappropriation, with the average bribery/corruption case clocking costing organizations about $538,000. This type of fraud is often associated with big businesses, politics, and the blurry line that separates the two. Bribery involves paying large sums of money to certain parties in order to influence decision-making, and corruption can involve everything from kickbacks to shell company schemes to you name it.

Fraudulent Activity: Financial Statement Fraud

Often carried out at the upper-management/executive levels, financial statement fraud is a deliberate misrepresentation of data in order to give a false impression of the company’s financial strength to investors, shareholders, and any number of other audiences that might be put off or scared away by the less-than-ideal financial health of an organization. To get an idea of what an example of this type of fraud might look like, we have but one word for you: ENRON.

There are no industries that are immune, but financial industries are particularly prone to fraud. Financial industries, for example, because employees are dealing with cash, have higher levels of embezzlement. Title loan companies, such as Title Loans Columbus, have to take extra security measures to guard against employee theft.

If you suspect fraud in your organization, you can file a complaint or report a fraud to a trusted manager (if you’re an employee), your local FBI office, or your attorney general. Just make sure you gather as much information as you can about those you suspect of committing fraud. Remember, it’s a serious accusation you’re making, so you should be absolutely sure about what it is you’re reporting before taking the steps necessary to actually report it.

Are Popular Airlines Conspiring to Keep Fares High?

Every time you book a flight, you wince a little at the price. Could it all be unreasonable? Airlines always claim that their flights are overbooked, that weather is playing a part, or that seats on your flight are in high demand. But what if they’re causing that high demand themselves in an effort to keep your plane ticket airfare high?

Civil Antitrust Investigation Eyes Major Airlines’ Possible Collusion

On July 1st, the U.S. government launched a probe into several of the country’s most popular airlines on suspicion of collusion. The claims are that these major airlines are purposefully keeping customer’s airfare high by limiting the number of seats available on their flights, creating an increase in demand.

As if that weren’t skeezy enough, the Justice Department’s civil antitrust investigation claims that the major airlines were illegally signalling to each other about how quickly they were adding new flights and seats. This is a much worse crime than simply forcing demand to remain high. They violated the competition policies that the government set forth in order to keep competitive pricing healthy in our state of capitalism.

The major airlines in question received letters demanding that they turn over all records of communication between each other, Wall Street analysts, and shareholders. The government has also requested their information about passenger-carrying capacity from 2010 to the present.

They suspect that these airliners have avoided upgrading their planes or adding new flights when they could’ve in an effort to limit available seats, keep demand unreasonably high, and increase fare for passengers. The investigation claims that these airlines could have added more seats many times, but conspired with other major airlines to intentionally limit their passenger-carrying capacities together.

Although the Justice Department spokesperson, Emily Pierce declined to confirm which airlines were under investigation, she did confirm that they were looking into “unlawful coordination” between some of the U.S.’ most popular airlines.

Major airlines such as Southwest, Delta, American, and United Airlines have all said that they received the government-issued letters and are complying by providing the requested information.

Massive Profit Growth for Post-Merger Airlines Sparked Suspicion

Suspicions grew when from January 2010 to January 2014 the economy 2.2% per year, but the passenger-carrying capacity remained static. Compare that to the airline’s growth of a whopping 5.5% in just one year; from January 2014 to January 2015. It simply doesn’t follow unless there was a little extra help between the competing airlines.

Through a series of very well executed business moves, United, Delta, Southwest, and American Airlines now control over 80% of seats on commercial flights. Since 2008, there have been a series of careful mergers, eliminations of less-profitable flights, and controlled airfares. Their strategy worked: the average domestic airfare has risen 13% from 2009 to 2014.

That percentage is adjusted for inflation, and doesn’t even cover the fees collected from passengers. In the last year alone, these airlines raked in $13 billion in reservation changing fees, and $3.6 billion in baggage fees. The profits were record-breaking at a combined $19.7 billion earned for the U.S. airlines in just the past two years.

Decrease in Jet Fuel Prices Could Spoil the Airline Industry for Investors

Investigation aside, will we see a decrease in prices this year? Unlikely. In fact, the airlines will probably see more profit since the 34% drop in jet fuel prices (their highest expense).

In the defense of airliners, expanding too rapidly has been the kiss of death for many flights in the past. When fuel is cheap, airlines often reduce their prices too much in an effort to outprice the competition, but instead offer too-low fare and add too many new flights… all too fast, effectively emptying their pockets.

It’s a capitalistic highwire act, to be sure. But as this current investigation shows; stacking the odds too heavily in your own favor can just as easily hurt you. Analysts are nervous that the control over the market will soon be lost, and the health of the airline industry will decline as new, cheaper airlines like Jet Blue and Spirit continue to grow more popular. Investors want to know that airlines will cap their growth and keep their passenger-carrying capacity limited for the health of the industry, or else they’ll retreat.

Effects of the Conspiracy Investigation Felt in the Stock Market

When the news of the investigation went out, stocks plummeted 3-5% within minutes on a day where the overall stock market was previously up. Investors would be most affected if the investigation were to reveal that the airlines in question were indeed colluding. Many are already pulling out in an effort to protect their finances.

Spokespeople from many of the airlines under investigation have reiterated that they’ve done nothing but benefit their passengers, and that the airline industry is competitive and healthier than ever.

Even if the collusion allegations are proven to be false, this investigation could change the financial course for the airline industry over the next few months; for investors, the stock market, airlines, and even passengers.

Treasury Prices Boosted by Stock Market Sell Off

Stock Market Sell Off Boosts Treasury Prices

June 10th marked the best day in the S&P’s 500 in over a month, largely due to a major sell off in German Bunds. The same strategized sell off resulted in the U.S. Treasury yields to spike to their highest recorded yields in more than seven months; a relief after being carefully tracked for the better part of a year. U.S. shares are now on the rebound.

Other U.S. Financial Increases That Could Be Attributed to the Sell Off

The U.S. Treasury wasn’t the only beneficiary of the recent rises. Oil prices also improved, and with it, raising hopes that the U.S. equities will be strong enough to handle the Greek government debt crisis.

Other industrial averages that experienced a comeback: the Dow Jones increased 1.33 percent, the Nasdaq Composite went up 1.25 percent, and the S&P 500 rose 1.2 percent. S&P experienced gains in their financial stocks and energy sector index, as well, at 1.4 percent and 1.2 percent, respectively.

The German Bunds sell off boosting the Treasury prices came at just the right moment, given the Greek and European debt crises, and the sharp drop in the value of the Japanese Yen. While finances take a global dip, the sell off secured a brief financial respite for the U.S. after a long solid auction of 10-year notes.

Unstable Economic Climes and Currency Failings May Be Ahead

The German 10-year yields also finally rose above 1 percent for the first time since September, putting to rest concerns that the euro zone might go into deflation. The 10-year yields rose for their fourth consecutive day as of June 11th. This shift caused investors to drop holdings on Japanese government bonds and U.S. Treasuries.

According to Mike Cullinane, head of Treasuries trading at D.A. Davidson in St. Petersburg, Florida, “We are completely tracking bund yields.”

The sharp increase in yields might scare off investors, as they did two years ago. According to Boris Rjavinski, a strategist at UBS in Stamford, Connecticut, “We are approaching yield levels where we may begin to see outflows from some bond funds. People might not have tolerance for more losses.”

In an effort to combat the potential loss of investor interests, the U.S. Treasury sold $13 billion worth of 30-year bonds on June 11th. Analysts are hoping that the boost in U.S. Treasury yields will incentivize investors to own new issues of U.S. Treasuries and corporate bonds. However, it’s speculated that the investors who’re concerned about a further rise in Treasury yields might hold off on purchasing them until yields stabilize.

The Greek Debt’s Impact on Current Economic Trends and Prices

Whether or not Greece and its creditors are able to quickly strike a deal will continue to cause market swings until a deal is finalized. The fear amongst traders is that Athens will default on a 1.6 billion euro repayment that is due at the end of June to the International Monetary Fund and exit the euro zone. This will be their fourth IMF deadline that has come up this month. If they do default, it could cause more sharp swings in the market, and global financial upset.

Despite the Yen’s troubles, the U.S. dollar is still currently rallying; again in part due to the stock market sell off. The U.S. consumer-price index was also given a boost, even in the face of decreased investor confidence in bond prices. That increase could signal an upcoming decrease in Treasury prices, as the two are often linked. Whether or not this increase holds throughout the month remains to be seen, given the current economic volatility.

Global economic decisions made in the course of the next few weeks could affect the current upward trend of U.S. Treasury prices, despite the effects of the recent German Bunds sell off.

US Government Sources of Revenue

United States Government’s Sources of Revenue

The U.S. government doesn’t show up to work and get a paycheck. A government is funded in part by its citizens, corporations, and resources. Most of the United States government’s sources of revenue come from various kinds of taxation, and the revenue earned from those taxes is put back into the country and states. There are five major tax-based sources of revenue in the U.S.- here’s how they break down:

Excise Taxes

The smallest source of the U.S’s revenue comes from excise taxes. These little everyday taxes accounted for just 3% of the total government revenue for 2010.

They can be indirect taxes or penalty taxes paid to the government. You’ll most often see these taxes at the end of your receipt. Purchases made on specific goods such as gasoline, highway useage for trucks, etc.

There are two kinds of excise tax classifications:

  1. Specific: a fixed dollar amount is charged according to the quantity purchased
  2. Ad Valorem: a fixed percentage is taxed on any particular good

You’ll see the ad valorem excise taxes in situations like pulling from your retirement fund before you’re of the designated age. That penalty charge takes the appropriate percentage from you in excise taxes, and those go to the government.

“Other”

Any form of tax revenue that doesn’t fit into any of the other specified categories gets lumped into the “other” category. This can include estate and gift taxes, customs duties, miscellaneous receipts, etc. These taxes mostly come from businesses, financial transactions that aren’t covered by the other categories, and so on.

6% of the U.S. government’s sources of revenue is labeled as “other” forms of tax revenue.

Corporate Income Taxes

In the scheme of total government sources of revenue, corporate income taxes make up 9% of the total revenue from taxes. Despite major corporations reaching near-monopoly status, their taxes remain shockingly low compared to other countries.

Corporate income taxes are used to try to level the playing field while still generating revenue for the U.S. government. Different rates are used for different levels of profits. The government taxes a corporation’s profits for the taxable period, typically to the operating earnings after things like depreciation, SG&A, and so on have already been deducted from the revenues.

In the U.S. corporate income taxes are only 9% of the government’s sources of revenue, but in most countries, they use higher corporate income taxes to finance government spending and national programs for their citizens.

Payroll Taxes

At 40% of the U.S. government’s sources of revenue totals, payroll taxes are the numbers that you see taking bites out of your paycheck. An employer withholds these payroll taxes based on the salary or wage that the employee earned. It’s common in most countries for both the federal and state governments to collect payroll taxes from employees.

These taxes are the source of revenue that funds programs such as health care, Social Security, unemployment, worker’s compensation benefits, etc. On a smaller scale, state or local governments will sometimes use payroll tax revenue to finance improvements and maintenance to local transportation and community upkeep for roads, parks, sidewalks, etc.

Payroll taxes are the government’s source of revenue that typically comes to most people’s minds when they think about their taxes and where that money is going and being used for. However, this revenue is still only 40% of the total revenue earned and used by the U.S. government; and nowhere near the full extent of tax revenue useage for the country or state.

Individual Income Taxes

At 42% of the U.S. government’s revenue sources for 2010, the largest portion of tax-gained revenue for the government comes from individual income taxes. You’ll know it best as the mountain of paperwork you have to fill out and file each April, and you cross your fingers that you get a tax return in the mail.

Individual income taxes are taxations by the government on gross financial income generated by everyone within their jurisdiction. Both businesses and individuals are required by law to file an income tax return each year. Those tax returns are examined and processed, and then it’s determined whether you owe more money to the government, or if the government owes you money, instead (which will come in the form of a tax refund). Individual income taxes may seem like a pain, but at 42%, they are the foremost provider of state and government-funded programs and activities that serve the public on a daily basis.

The rate of individual income taxes can vary, in an effort to keep the balance. So when the tax rate rises, taxable income rises with it.

Taxes are a Major Source of Government Revenue Across the Globe

Every country imposes taxes as a necessary source of revenue for the nation. The United States is no exception, but it actually falls far below other developed countries as far as how much they take in taxes to account for revenue. Given the massive debt that the U.S. is in, it might be time to rethink that strategy and follow the lead of prospering countries that impose high levels of taxes, such as Denmark or Sweden.

Federal and state taxes are felt every day by citizens, but they’re still a necessary source of revenue generated to finance other improvements in our everyday lives.