By Ben Steverman Feb 21, 2014 1:10 PM PT
Photographer: Raul Arboleda/AFP via Getty Images
A picture of late drug trafficker Pablo Escobar is hung from a wall inside the Napoles... Read More
Even international drug traffickers need investment advisers.
That was Robert Mazur’s job when he went undercover for the U.S. government in the 1980s and ‘90s. Posing as a Mob-connected businessman, he helped the Medellin drug cartel launder and invest its suitcases full of cash.
His clients were “the biggest crooks in the world,” says Mazur, author of "The Infiltrator: My Secret Life Inside the Dirty Banks Behind Pablo Escobar’s Medellin Cartel.”
Yet they “always told me that they don’t gamble,” Mazur says. “They don’t take risk, which is why the stock market was of absolutely no interest to them.”
Wait, criminals don’t like risk? Murder, drug trafficking, fraud and bribery -- all okay. But propose buying them shares of Twitter or Tesla, and they freak?
Investing, by definition, means trusting others. You must believe chief financial officers aren’t cooking the books and rely on people like Mark Zuckerberg to make smart use of the billions at their disposal. For criminals who thrive on taking advantage of trust that’s not an easy sell.
Convicted felon Sam E. Antar says stock-picking -- trusting in people and numbers you can’t directly verify -- sets you up as a mark for the unscrupulous. Antar was the chief financial officer of Crazy Eddie, Inc., an electronics chain led by Sam’s cousin, Eddie Antar. The chain collapsed under the weight of its fraud in 1989. “Investors live on hope and it’s the criminal’s job to take advantage of that hope,” Antar says.
The fact that he got caught is no consolation, Antar says. Regulators and investigative reporters have been losing the resources to uncover fraud.
He points out, correctly, that the number of FBI white-collar crime prosecutions has fallen by half since the 1990s.
Antar now speaks on white-collar fraud, often to law enforcement groups, runs a website on the topic and consults for law firms suing on behalf of investors.
“If I wanted to be a scam artist today, I could be very, very successful,” he says.
“I’d probably have less risk of being prosecuted and far less risk of going to prison.”
But as he also points out, criminals are as short-sighted as the rest of us, maybe more so.
“Nobody ever plans on failure,” he says.
“The prisons are full of people who never planned on being there.”