An Endless Stream of Lies (11 page)

A SOCIETAL PHENOMENA

Is Alex’s manipulation of people and things nothing more than an aberration from the norm of society? More ominously, is Alex representative of the default setting on the societal ethical compass, displaying the go-ahead for:

• Situational ethics,
  
• Abdication of responsibility, and
  
• Moral ambiguity?
  

For example, many people purchase radar detectors to help them break the traffic laws and avoid the consequences of their violations. They mount the devices on their dashboards for their children to see and contemplate the unspoken message, “Do whatever, just don’t get caught.”

How narcissistic is it to believe, “I am entitled to break the traffic laws that are there for the safety of all”? How narcissistic is it to have no feelings of remorse regarding the dangers which speeding places on others traveling on the road?

Alex’s device, capable of committing and hiding the fraud, was mounted in his head. The belief that he was entitled to do so was located in his heart.

Politicians lie to the public with reckless abandon. They lie about their military combat experience, as an example, and when discovered, they dismiss their falsification with, “I misspoke.” Sadly enough, their electorate dismisses it right along with them by voting for their re-election. Perhaps, it is the collective mindset of “better the liar we know than the liar we don’t know.”

Professional athletes lie about or conceal their use of performance enhancing drugs. Statistically, one in four resumes or job applications contain falsifications or significant omissions.

Alex lied publically and privately. He was very much a part of
an endless stream of lies
. It may be that he was able to dismiss his own deceptive actions as readily as a politician or other notable deceivers. However, the public and the judiciary, in his case, were not so amenable to forget about it.

We will ascertain where the compass heading ultimately led in Alex’s personal voyage. If we as a society are following that same heading, what will be our final destination? Only time will tell.

THOUGHTS, COMMENTS AND ANALYSIS

What are your impressions, to this point, with regard to this circumstance?

Exactly what do you know?

What is it that you
know
that you don’t know?

What questions would you ask in order to know?

What steps would you take in order to know?

POINTS TO PONDER

What follows is a portion of Alex’s early testimony during the trial:

Q. Mr. Klosek, when we left off, I think we were talking about the third and fourth quarter of 2002. You remember that?

A. Yes, I do.

Q. And we were talking about the client account statements that were sent out during that time period.

A. Yes.

Q. And I think you testified that during that time period you were lying to clients on their account statements.

A. Yes, I was.

Q. And you were lying to Mr. Noel about suffering trading gains — excuse me — experiencing trading gains when you were, in fact, experiencing losses; is that correct?

A. Yes.

Q. And I think you said that one of the reasons you lied was because you were fearful of losing your job.

A. Yes.

Q. At that point, is it fair to say that your work experience was one year at a CPA firm?

A. Yes, it was.

Q. And then one year at the company that went bankrupt.

A. Yes.

Q. And now one year at CEP, when you’ve been losing money for part of that year.

A. Yes.

Q. Did you think you had particularly good employment prospects at that point?

A. Not at that point.

Q. At that point were you committing this scheme by yourself?

A. Yes, I was.

1. What were the motives, as presented in this brief testimony portion, for Alex to commit the scheme by himself?
   
2. If this were “one of the reasons” that Alex lied, what could have possibly been other reasons?
   
3. What perspective might a person have that is willing to lie to one hundred clients and one partner for his or her own self-interest?
   
4. What questions would you pose to Alex at this point?
   

CONTENT – CONTEXT APPLICATION

A former public works director was charged with four counts of larceny by employee. The defendant was accused of keeping the money from the sale of discarded appliances. The appliances were part of the municipality’s recycling program. The items were sold at a salvage yard as scrap metal. The proceeds from the sale were supposed to have been deposited into the appropriate governmental account.

When investigating a crime of this nature, consider the following:

1. How long did the individual work for the department of public works before becoming the director?
   
2. How long had the individual served as director before being discovered?
   
3. What ways might the individual have converted resources to himself, prior to becoming the director?
   
4. As director, what other ways might the individual have converted resources to himself?
   
5. What questions would you pose to this individual?
   

CHAPTER SEVEN

OIL AND WATER

DIFFERING TESTIMONIES

“Truth will rise above falsehood as oil above water.”

—MIGUEL DE CERVANTES SAAVEDRA (1547–1616), SPANISH NOVELIST AND POET

NAVIGATION POINT AND HEADING
As a result of the efforts of Bryan Noel’s defense team, the prosecution had learned of Alex’s deception and continued withholding of CEP investors’ assets. In open court, an incongruence between the testimonies of Alex and his father further served to muddy the waters.

FAMILIAL CONFLICTS

During the trial of Bryan Noel, a most telling drama arose—Alex and his father, Joseph Klosek, provided testimonies that were incompatible. Alex asserted as to what “did happen” and his father countered as to what “did not happen.” Their two declarations were oil and water—they could not be mixed. And the reason they—oil and water, as well as the two Klosek testimonies—cannot be mixed, is an issue of “polarity.” “Polarity” is defined as “the presence or manifestation of two opposite or contrasting principles or tendencies” (Dictionary.com). In the realm of linguistics, polarity is defined as “(words, phrases, or sentences) positive or negative character” (Dictionary.com). Both of their assertions could not be true.

In conditional logic, if Alex’s testimony was true, then his father’s words were false. Conversely, if his father’s testimony was true, then Alex’s words were false. Their statements were polar opposites—conflicting affirmations, sworn to in open court. And conflict is always at the heart of any chronicle.

Within literature, father–son conflict is a classic theme. For example, in Franz Kafka’s, “The Metamorphosis,” Gregor Samsa, a traveling salesman who was suddenly transformed into an insect, experienced such an ongoing dispute with his father. In Oedipus’ case, the father–son conflict was most assuredly problematic for the whole family. Reading closely in Charles Dickens’
A Christmas Carol
, we find a brief and subtle intimation regarding a negative father–son relationship when Fan speaks to her brother—young Ebenezer Scrooge—in a dark, cold, wintery, deserted school house, saying,

“Father is so much kinder than he used to be, that home’s like Heaven! He spoke so gently to me one dear night when I was going to bed, that I was not afraid to ask him once more if you might come home; and he said Yes, you should; and sent me in a coach to bring you. And you’re to be a man!” said the child, opening her eyes, “and are never to come back here; but first, we’re to be together all the Christmas long, and have the merriest time in all the world.”

But, for Alex and his father, evidence of a father–son conflict did not appear in the quiet and privacy of an empty school house. Rather, this conflict was made manifest in an open federal court with a court recorder taking down every word, the media reporting, the public most interested and the investors watching and waiting.

Was the pre-conversion Scrooge a product of a father that had not always been so “kind” and had not spoken so “gently”? Did the fact that home had not always been “heaven” produce a Scrooge that was, as Dickens wrote, “. . . a squeezing, wrenching, grasping, scraping, clutching, covetous old sinner”? If Fan had somehow lost her “fear” and had asked her father “once more,” then we wonder, “Why and for how long had she been fearful, and how many times had she previously asked?” If now Scrooge’s rank was to be a “man,” had he previously been relegated by his father to that of a perpetual “child”? What role does the father–son relationship play in the making of the man? While Scrooge did not epitomize the “milk of human kindness” in his interactions with others, there was never an indication that he had ever stolen.

THE ASSERTION

In the trial of Bryan Noel, Alex testified that between 2006 (the year he went to the FBI) and 2009, he met with his father, Joseph Klosek, in order to obtain his help with the fabrication of the story he related to the FBI.

Q. After signing that plea agreement, in December of 2009, did you meet with the government again?

A. Yes, I did.

Q. Where did that meeting occur?

A. That happened in Charlotte.

Q. Where?

A. In the FBI office.

Q. Who was there?

A. You, Mr. Jenkins, and Ms. Rikard were there.

Q. And at that meeting, did I specifically ask you whether or not Mr. Noel knew about the trading losses from the beginning?

A. Yes, you did.

Q. And what did you tell me?

A. I said that he did.

Q. And was that true?

A. That was not true.

Q. Did you violate the plea agreement?

A. Yes, I did.

Q. In December of 2009, did the government know you violated your plea agreement?

A. No, the government did not.

Q. In anticipation of that meeting in December of 2009, did you do anything?

A. Yes, I did.

Q. What did you do?

A. I had discussions with my dad about how to answer some of the questions that may be coming.

Q. Before your meeting with the government in December of 2009, you did what?

A. I met with my dad to discuss how to fashion some of the elements of the story.

Q. To lie?

A. To lie.

Q. You met with your dad to do this?

A. Yes, I did.

Q. Where did that meeting happen?

A. It happened at his house, as I recall.

Q. His house where?

A. His house in Horse Shoe, North Carolina.

Q. To lie about what?

A. To lie about the extent of the knowledge that Bryan Noel had as well as anything that may be potentially harmful to my dad.

Q. Well, what could be potentially harmful to your dad that you had to lie about?

A. The fact that we had discussed some of the story; the fact that he had access to Titan trading accounts; the fact that there were some things that were put into his home.

Q. So you mean you had met with your dad to discuss the story prior to December of 2009?

A. As I recall, there were some meetings prior to that time.

Q. When?

A. There were some meetings in 2006, but most of the meetings that happened were in late 2009 and early 2010.

Q. Mr. Klosek, are you telling this jury that you met with your father over the course of three years to provide false information about Mr. Noel to the government?

A. Yes, I am.

Q. Multiple meetings with your dad?

A. Multiple meetings with him.

Q. What in the world were you thinking?

At another point in the trial, the same topic emerged with the following exchange in Alex’s testimony:

Q. Did you meet with anybody before coming to the U.S. Attorney’s Office on February 4th?

A. Yes, I did.

Q. Who did you meet?

A. I had met with my father on the days before that meeting.

Q. For what purpose?

A. For purposes of trying to make sure that no information came out that was unfavorable to him.

Q. To lie?

A. To lie.

Q. To lie when?

A. To lie at any meetings I would have with the U.S. Attorney

THE OPPOSING ASSERTION

In a
Henderson Times-News
article on March 4, 2010, titled “CEP Fraud Case Takes a Twist,” it was reported that, later in the trial, Alex’s father, Mr. Joseph Klosek, was called to testify. In his testimony, he disclosed that he had been trading stocks since 1970 and had traded stocks for Certified Estate Planners. He testified that “he didn’t know about all of his son’s lies.” He stated that it was not until after the FBI had searched Certified Estate Planners, in late summer of 2006, that he became aware of his son’s troubles. He further testified that he had never held any money for Alex, he did not meet with him in December of 2009 in order to fabricate a story, and he never purchased any property to hold for Alex. When he was asked if he had assisted his son in “fashioning a story for the FBI,” he answered, “Never.”

Alex had testified that they did meet and fabricate a story for the FBI (positive). Alex’s father contented such a meeting did not take place (negative), inferring Alex was either mistaken in his testimony or deceptive—Polarity 101.

THE ISSUE REGARDING SELLING STOCKS

Let’s focus our inquiry with the senior Klosek’s revelation that he had traded stocks for Certified Estate Planners. How did he come to be in a position to do so? Did Alex approach his father, and if so, for what reason? There are a number of possibilities we can formulate for consideration:

In the first scenario, we can postulate that Alex went to his father with the idea of offering him the opportunity to buy and sell stocks with the investors’ money in order to give his father something to do.

In our second theory, Alex’s stock trading activities were going well, but he wanted them to do even better, so he brought in his father, with his decades of experience, to increase the gains even more.

The third case could be that Alex’s stock selling endeavors were producing negative results, and Alex brought in his father to bail him out and get the project back on course.

In the last setting, Alex’s father came to him and asked to be allowed to buy and sell stocks with the money investors had entrusted to Certified Estate Planners.

In his testimony, Alex provided an answer to our inquiry as to how the elder Klosek became involved:

Q. Did you seek any help with regard to the AmeriTrade account when you started sustaining trading losses?

A. Yes, I did.

Q. Whose help did you seek?

A. I went to seek the help of my father, who had traded stocks for much longer than I had, to see if there was something he could do with that account to maybe turn it around.

Q. Did he try?

A. He did.

Q. How did that work out?

A. I do not think that was successful. Initially it was, but with the ultimate result it was not successful.

Q. Were monies from the Carolina First loan that were traded lost?

A. Yes, they were.

Q. How much?

A. I don’t know the exact figures, but I would approximate somewhere around $200,000.

So, we learn that it was Alex who initiated the process that resulted in his father trying his hand at trading stocks.

Regardless of the circumstance in which the senior Klosek began to trade, the relationship between father and son would seemingly, at a minimum, had to have been civil. In any case, Alex’s father was, at that point, on board and performing Certified Estate Planners stock transactions for his son.

THE SOURCE OF ALEX’S STOCK TRADING ENDEAVORS

Back tracking a bit to regain perspective, we wonder, “How did Alex come to be responsible for trading stocks for Certified Estate Planners?” When Alex went to work for CEP in 2001, he had no stock trading experience. He had developed a stock trading program in college but had never tested the system. After the attacks of September 11, 2001, Alex “took over the management of Bryan’s accounts because” he “told him about his ‘stock trading system.’”

What do we know? The September 11 attacks produced an adverse effect on the stock market. Alex “told” Bryan about his untested stock trading system. “Told” means “to make known by speech or writing (a fact, news, information, etc.); communicate” (Dictionary.com). In one case, Bryan could have asked Alex, “Say, would you happen to have a stock trading program that you developed in college?” More likely, Alex may have initiated the idea when he “told” him about his system. In any case, Alex “took over” the “management of Bryan’s accounts because . . .” “Because” is an explanatory term. An explanatory term is used to give the reason for or cause. It allows for the explanation of cause and effect.

The reason why Alex took over the management of Bryan’s stock accounts was “because” he had told Bryan about his system. After Alex had made the information known, Bryan made the decision to turn the management of his own stock accounts over to Alex. Again referencing to the “best interest principle,” Bryan now believed it was in his best interest to do so. This undertaking would be the first instance that “real money” would have been utilized in Alex’s college-developed, stock trading system.

In his testimony, Alex reported, “In early 2002, Bryan was impressed with the results and thought it could be offered to clients of CEP.” Apparently, the results of Alex’s stock trading activities from late 2001 to early 2002 were positive as determined by the revelation that “Bryan was impressed” and “thought it could be offered to clients of CEP.” Consequently, Alex testified, the clients of CEP were told “that their money would be invested into the stock market.”