'Goldman Sachs' swindler fools firms

originally appeared in USA Today:

An alleged con artist wanted in at least three other states apparently swindled an array of prominent Nashville businesses in recent weeks by writing worthless checks and pretending to be the wealthy owner of a company specializing in health care, U.S. Defense department contracts and gas refinement.

Over a seven-week period starting in mid-November, Steven Goldmann is alleged to have conned a local real estate company, a Nashville fashion designer, a vintage guitar shop, a limousine company, at least one hotel, a furniture store, an audiovisual company, a helicopter rental business and a Hooters waitress out of tens of thousands of dollars.

Goldmann was arrested on Friday after Hilton Nashville Downtown General Manager Ray Waters became suspicious during a conversation with Goldmann, who said he wanted to land his rental helicopter on the hotel property.

After rejecting the helicopter request, Waters checked a city property records website and discovered that Goldmann's story about owning expensive pieces of Nashville real estate was false.

Waters called the police, who arrested Goldmann at the hotel on an outstanding warrant in Montana, where he is set to be extradited on a charge of writing more than 20 worthless checks totaling more than $5,000. But a slew of Nashville business owners apparently fell victim to Goldmann's elaborate story.

With a cheery bravado, Goldmann told his alleged victims that he was the millionaire owner of a successful company, though the nature of his business changed depending on whom he was dealing with. Goldmann was transported around Nashville by helicopter and in extravagant cars provided by Metro Livery, which says it is owed $12,000 for the vehicles and drivers it provided.

In addition to the Hilton, Goldmann rented a room at another downtown hotel during his stay, but in December he sought more permanent digs. He contacted the real estate firm Fridrich and Clark about a listing for an opulent house a few doors down from the governor's mansion.

A local real estate agent said Goldmann carried himself with confidence and talked in detail about his multipronged business specializing in health care services and gas refinery. Goldmann wrote checks for a deposit and the first month's rent at the mansion, but the agent said they never cleared.

When Repass visited the mansion about the matter, he found that Goldmann had changed the locks and spent tens of thousands of dollars to have the home decorated with new furniture, televisions and other audiovisual equipment. Repass said the furniture company and audiovisual company took back their merchandise when Goldmann's checks didn't clear.

Nice guy, very presentable, kind of a young hipster look, according to the real estate agent. When he saw the house, he said, 'This is very perfect. I've got a company I'm moving to Nashville, kind of a multipronged thing.'

'He made it look good'

Goldmann also ran afoul of local businesses when, authorities say, he used worthless checks to purchase lavish gifts for a girlfriend who worked at a local Hooters, and her family.

A renowned designer and owner of world-famous Manuel American Designs, said he sold more than $15,000 in high-end fashions to Goldmann, including a specially made $7,000 purse for a girlfriend.

He called me on the phone first of all and says, 'Can you make me a copy of a Christian Dior purse?' according to the designer. I said, 'I don't make up so many things, but I can make you something better.'

The designer worked the week of Christmas making the purse, and Goldmann visited the store on multiple occasions while he waited for its completion. He said Goldmann took an interest in other items at the boutique and wrote two large checks to cover the cost.

He made me a believer, the designer said. He even mentioned Goldman Sachs, the (investment) company; he said he was a family descendent. He made it look good, period.

Never, never, never, never in my life have I had something like this before. This was a new fish obviously, and made a believer out of me.

Goldmann also tried to write a check in order to purchase a $5,000 guitar from Music City Pickers, according to the owner of the vintage instrument shop.

I told him I don't do checks like that, but he asked if I could make him a gift receipt so he could give it to his father-in-law for Christmas, he said, adding that he went ahead and printed a gift receipt after Goldmann led him to believe he owned a company with lucrative defense contracts.

When the man Goldmann said was his father-in-law showed up to claim his Christmas present, the instrument shop owner balked because Goldmann had failed to come through with the payment.

He was a modern-day scam artist, according to the shop owner, adding that the girlfriend who worked at Hooters also was a victim. Like Leonardo DiCaprio in 'Catch Me If You Can.'

The co-manager of Metro Livery, said it was sad that someone with enough intelligence to fool such prominent businesses was using his gifts for the wrong reasons.

We hope, number one, that we get paid the $12,000, she said. The best part of him being off the street is now we can watch so no one else is affected.

As of late Monday, Goldmann had not been charged with any crimes in Nashville, though an investigation is ongoing, according to a police spokeswoman. He is being held on a $200,000 bond.

Goldmann is wanted in connection with similar alleged crimes in Montana, Minnesota and Oklahoma.

Stop That Thief!

Losses From Theft and Fraud Can Sink a Small Business; Technology Offers Welcome Relief.

For small businesses, preventing theft and fraud by employees can be an uphill struggle.

Unlike their big counterparts, small companies usually can't afford a large security staff or big-ticket monitoring technology to keep an eye on things. And they often don't generate enough sales volume to make up for the losses from pilfering.

Now a new generation of security technology aims to give small businesses an inexpensive defense against unscrupulous employees. Some of these systems let business owners who are on the road check their security cameras over the Internet and get email alerts if something unusual happens, such as employees closing up shop early.

Restaurants, meanwhile, can use table-side credit-card readers to prevent cashiers from stealing customers' card numbers or inflating the tips written on bills. And grocery stores can use a combination of security cameras and software to automatically spot cashiers who try to slip free products to their friends and family.

These new products are arriving as stores face mounting losses from theft. According to the latest National Retail Security Survey, losses from "shrinkage" -- which includes theft, fraud and error -- reached a new high of about $40.5 billion in 2006. About half of that -- $19 billion -- came from employee theft. Shoplifting, in contrast, accounted for about a third. (The study, conducted by the University of Florida and the National Retail Federation, was funded in part by grants from makers of security systems.)

Here's a look at some of the most innovative new security systems out there.

WATCHING FROM AFAR

For a small-business owner worried about employee theft, leaving the shop in someone else's hands can be nerve-wracking. Now a host of security providers let bosses check in on things from the road.

For instance, Alarm.com Inc., of McLean, Va., sells a system that allows owners to travel to a Web portal and get remote feeds from security cameras, change entry codes and trigger sensors that monitor systems such as lighting and climate control. If a problem arises with those systems -- such as a power outage -- you can get an alert via a text message or email.

Recently, Kevin Donahue, owner of a Planet Beach Franchising Corp. location in McLean, was in Amsterdam on business when he received a text message from Alarm.com: The spa's alarm system had been armed at 3 p.m., before the usual closing time. He checked the security cameras online and saw the facility was dark.

So he called his manager and got the explanation: The spa had closed early because of a snowstorm..

"The greatest thing is that it gives me the ability to travel and do the things that I do," says the 34-year-old Mr. Donahue, who's also a full-time salesperson for a tech company and often travels outside the country on sales trips. "It gives me the ability to manage my staff remotely. I can call and say, 'What's going on?' "

Mr. Donahue bought the system for under $100 and pays a monthly fee of $39. Alarm.com says the base price for the system is usually $500, with a monthly fee of $29 to $50, although those numbers can vary by reseller and area, as well as the features customers choose.

SAFEGUARDING CARDS

Another new technology helps small businesses -- particularly restaurants -- protect against "skimming." In this scam, cashiers steal customers' credit-card information for use in identity theft.

About 70% of credit-card-fraud cases involve skimming, according to Trustwave Holdings Inc., a data-security and compliance-management company based in Chicago. In many cases, business owners are ultimately held responsible for their cashiers' crimes -- costing them money and damaging their reputation.

For some businesses, the solution is to let customers become their own cashiers. At Southeast Grille House in Brewster, N.Y., servers bring a wireless gadget called On the Spot to their customers' tables. Patrons can swipe their credit cards on the device -- which is about the size of a brick -- punch in the tip amount and print out a receipt to sign, all from their seat.

Since the customer enters all the information, cashiers can't inflate the tip -- and the receipts don't contain much personal data that could be stolen and used for identity theft.

The device, from VeriFone Holdings Inc. of San Jose, Calif., runs about $1,000. Southeast Grille House owner Domenic Chiera says it was worth the investment. "It's fast, and the receipt has little information, so no names or numbers," says the 57-year-old restaurateur. "I like the system. It works well for us."

CHECKING OUT FRAUD

At grocery stores, thieving employees are almost as much of a problem as shoplifters. About 40% of grocery-store thefts were attributed to employees in 2006, according to the Food Marketing Institute's Supermarket Security and Loss Prevention 2007 report. One of the biggest problems is "sweethearting," in which cashiers give friends and family freebies by pretending to scan items at the register.

Many stores use closed-circuit television to watch checkout lines. But the stores often don't have the time or manpower to review the tapes, so the cameras aren't a strong deterrent. StopLift Inc. of Bedford, Mass., has devised a system that combines cameras with advanced software to spot sweethearting automatically. The technology can recognize when cashiers make unusual movements when handling items -- such as placing a hand over a bar code -- and determine whether the items were properly scanned.

When the system identifies sweethearting, it places blinking squares over the video to show exactly where the theft occurred. Then it gathers the incriminating clips together for owners to review.

Stores "have the cameras but they don't have the manpower to watch it," says Malay Kundu, chief executive of StopLift. "What we've done is sort of automate that."

Three Big Y Foods Inc. stores in Massachusetts and Connecticut have been testing StopLift's Checkout Vision Systems for the past five weeks. Mark Gaudette, director of loss prevention at the Springfield, Mass., grocery-store chain, suspects that employee theft accounts for about 38% to 40% of its total losses.

"We've got pretty much a zero-tolerance policy for any folks that steal," Mr. Gaudette says. "What we're hoping is that all these technologies will help us in loss prevention and educate all of our staff."

The stores had already been using closed-circuit television and software that scrutinizes sales data for abnormal behavior or inconsistencies at the cash register, such as excessive voids or refunds. But those measures weren't enough to stem the losses.

StopLift's system works with those tools to ferret out sweethearting. For instance, if the sales-data software shows that somebody rang up too many coupons on one order, the StopLift system can analyze video from the exact moment this happened.

Big Y is still analyzing the results. So far, Mr. Gaudette says, he has spotted some sweethearting incidents, but he has seen far more cashier errors, such as giving up on hard-to-scan items instead of calling the manager for help.

Pricing for the technology is done on a case-by-case basis, says StopLift's Mr. Kundu. He says that for a typical medium-volume store, monthly subscriptions currently run about $2,000.

Of course, buying these systems isn't the only option available for small stores. Experts suggest that stores could hire fewer part-timers -- who have less attachment to the business and are more inclined to steal -- and conduct more-rigorous pre-employment screenings to weed out potential thieves.

Employers must also hammer home a code of conduct, experts advise. For instance, give new hires talks on integrity and loss prevention and offer anonymous hotlines where employees can notify managers about fellow workers who may be stealing.

The bottom line is that employees must recognize they have a part to play in stopping theft, says Joseph LaRocca, vice president of loss prevention for the National Retail Federation. "Loss prevention is really everybody's responsibility," he says.

By: Raymund Flandez
Wall Street Journal; June 16, 2008