HS 425 - Certified Fraud Examiner & The Meltdown Chronicles with Len Goodman

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Welcome to the Holistic Survival show with Jason Hartman. The economic storm brewing around the world is set to spill into all aspects of our lives. Are you prepared? Where are you going to turn for the critical life skills necessary to survive and prosper? The Holistic Survival show is your family's insurance for a better life. Jason will teach you to think independently, to understand threats and how to create the ultimate action plan. Sudden change or worst case scenario, you'll be ready. Welcome to Holistic Survival, your key resource for protecting the people, places and profits you care about in uncertain times. Ladies and gentlemen, your host, Jason Hartman.

It's my pleasure to welcome Len Goodman to the show. He is a certified fraud examine and he's also author of the Meltdown Chronicles. That is a thriller based on weaving in a lot of financial and economic principles and what might become of the world. So we'll examine some pretty big heady issues here. He's also been examining the potential fraud that we've alleged against PIP Platinum Investment Properties, PIP Group, PIP West, PIP East, Charles Sells, etc. Talked about that before on the show. So a Len, welcome. How are you?

I'm fine. How are you, Jason?

Good, good. It's good to have you on. So the Meltdown Chronicles tell us a little bit more about that and the way various elements in society are trying to subvert the truth or divert the truth, I guess. What's it all about? Just give us the big picture.

I'm 74 years old and been around the world for a while and seen a lot of things. Like most of your listeners, once I decided to think about how am I going to strategize with this changing world that we're going to have. And I'm sure this is something that everyone does and you have to try to think about the overall rules of the game and where it's going so that you can fit your strategy in. And in doing so, and looking at the trends, both economics, technology and what's happening with our species in the modern world, I decided that I had to put some of these thoughts down on paper. And so I decided to write a book and called the Meltdown Chronicles. And it basically takes place during the 2008 crash and why it happened because a lot of us could see it happen way down the road when they started giving away mortgages to anybody who was breathing. But that was just the tip of the iceberg. There's A lot of conspiracy theories out there, from central banks to the Bilderbergs, and a lot of other of those conspiracy theories out there. But mine, more or less is based upon a university, a graduate school university professor I had, who was a bond trader in New York, brought to his students his experiences and viewpoints. And basically to shorten the story out, we human beings are reaching a crossroads. Overpopulation is coming about. There's going to be 9 billion people here in 2050 or so. And can capitalism fund that kind of growth to create the kind of jobs that are going to be needed out there? Can education keep up with us? All those kind of things we talk about, and we came up that there's basically two solutions. Either we're going to have a very efficient government that's going to govern in a different way, not a corrupt way, a way with accountability and so forth, in a much more structured society, which people may not like. And the other is reduce the population, which nature usually does, the bubonic plague and wars and so forth. To help make it more manageable. Technology is coming about that could actually help us provide for a world that would be much more controlled and balanced, such as the quantum computers and the Internet of things that could track every transaction that happens in the world. But of course, then that means that currencies would have to be outlawed, a whole new structure would have to be developed, but the capability is there. The other is developing engineered gene that could create a pandemic and we'd never know who did it. I mean, you know, in times of crisis, all of a sudden an epidemic breaks out and we would never know if devious minds were behind that. But of course, most normal people think, ah, who's going to create mass murder? And there are people that could believe that. There are human beings who mean well, who are pragmatic enough to say, look, we need to take care of the species instead of flying off to Mars and all that money and all the risks involved in that, what we need to do is control our planet here. And we could actually, in times of crisis, maybe leak out an engineered Ebola virus that's resistant. And all of a sudden nature steps in to prune back the population. And no one would ever know if that actually happened. That's one way of.

They'd know it happened. They just wouldn't know who the perpetrator is necessarily.

Right.

Yeah, exactly. And as a matter of fact, there are a lot of think tanks out there that if, if my little brain can come up with these kind of Scenarios. I'm sure there are people out there who in think tanks who are looking at these scenarios. And so the theory is that we are at a crossroads. And you begin to see, and we begin to see by all the killings that take place, the needless senselessness that the psychopathy or psych, what do you call that psychopathy, pathological behavior that's happening in the world today. It's not hard to imagine. That's not a possibility. It's not out of the conception that it could happen.

Do you know what is really amazing to me is how the media, the entertainment media, whether it be the video game media or Hollywood, the movies, the TV shows, but especially the movies, are able to just have rampant violence in them. You know, almost every video game is based on a gun, right? If you look at movie posters, if you're scrolling through Netflix, for example, and you look at the, you know, what's known as the movie poster, right, Is what you see on the screen. So, you know, these all have guns in them. They're all portraying violence. And I'm not saying there should necessarily be government censorship because, you know, that scares me, okay? But the fact that they're just not held to account in the court of public opinion or in real courts, Hollywood just gets a pass. It's amazing to me that that can just happen. The video game manufacturers and a lot of the music recommending violence. And again, I'm not saying the government should tell them they can't produce this stuff. I'm saying that the court system and the court of public opinion should hold them accountable, not censorship. There's a difference. I hope the listeners understand that. It's just mind boggling that there seems to be no accountability. Would you agree with that?

Absolutely. And we certainly see it with this current president. It's absolutely astounding. Behavior and political correctness run amok. And in fact, what I've come to the conclusion is that maybe we have a false impression of who we really are. We are animals evolved from the savanna, born and bred to try to survive. Now it's not a matter of hunting and feeding yourself. Now it's a matter of making enough income to survive. And you'll do anything to survive. So people will bend their morals and their values to survive. And we see that now. If people lose their jobs, they go from living well and enjoying the good life to nothing. And that can happen overnight, no matter how much education you have or whatever. And so I think that our basic nature, our thousands of generations of trying to survive is fighting against our ability to create a much better world. And until we change ourselves, either genetically, if you want to get science fiction, or we're going to have to do it through a lot of accountability from starting from a young age on up, until we change our philosophy about how we relate to each other. Getting rid of tribalism, competition, trying to get the empathy in there. So the rising tide lifts all boats. I think until we can really get that way, we're not going to progress and we're going to start hitting that wall. In fact, we're already in it.

Len, I want to play devil's advocate with you for a moment, though. Are things really that bad today? I mean, let's look at, like, a long scope of history, right? There have always been bad people. A lot of them throughout history have had huge military forces behind them, whether they be Napoleon or Stalin. The list goes on and on, right? And when you look at scripture, that's such a good window into human behavior and how human nature really, in 2500 years, hasn't changed. There are examples of people being catty and jealous and ruthless and thieving throughout history. This is not a new thing, is it? Now maybe, though, it's different this time. Famous last words of any investor, right? Hitting boom times. I just had to find out. But maybe it is different. And the reason now is we have this global communication system. We have a lot of people, sadly, that view. There's sort of so much opportunity out there in a way, because of the connected world in which we live, the technology we have, that many people view these relationships as very disposable, like they'll just move on to the next one, right? And so that's possibly an element. I want to see what you think about that. Is it just that we hear about it more nowadays? I mean, this stuff's always been going on, but now we have this globally connected media that you instantly hear about every. Every bad thing. And. And hey, the old saying in the newsroom is if it bleeds, it leads. People aren't interested in hearing about good news too much. You know, what are your thoughts?

Well, again, it gets back to human nature and our thousands of generations of doing anything it took to survive. However, it's, you know, take the picture, Blade Runner. That could be our future. Just this mishmash of crowded humanity with some parts doing well and other parts not. And it could be the nature of the universe that chaos reigns, and maybe our species will somehow or a portion of our species will evolve and survive and do well, and maybe other Parts won't. We don't know. The mind boggles at what technology has done recently. We're filled our heads and our senses are constantly bombarded by information. Almost an information overload. Do you remember the times when you were a kid when you really got bored?

Yeah, I know. Nobody gets bored anymore. Nowadays is impossible.

It really is. It's a real conundrum and it's really interesting. But nature will take its course and either we're going to have to change in our minds more than physically because that's not even a major problem in the future. So it's really an interesting time to be alive. As you put in your email. This is a very interesting time to be alive and a little fearful because it's unknown. Of course the unknown is always scary to most people. So that's why every day when I get up and think about what's going on around us and see the news, which is, you know, we all get our worldview through the screen. We don't know what it really is. We still live our day to day lives of survival. So we all feel the footsteps of artificial intelligence coming. All those kind of things that are good but also cast a dark shadow. And these are uncertain times. And as you say in investing with all this information and everyone being able to speak well and have great resumes and know all the catch words, it's very easy to get caught up in fraud. Very sophisticated fraud.

Yeah, well that's a good segue. That's a great segue into, into your profession as a certified fraud examiner. Now tell the audience what that means to be certified as a CFE, if you will.

Well, cfe, it's a regime of study where learn a mixture of forensic accounting so you can read financial reports and get an understanding what trends are and where unusual things happen. It's also learning how to be a detective, how to track down tidbits of information and ask the right questions and listen carefully and watch body language. It isn't something that you can really learn in school. It requires some, I guess you call it social IQ in learning how to read people and asking the right questions. And then how to interview someone, how to get someone to confess to their wrongdoings by presenting it logically, sympathetically, non threatening, but being able to pull the truth out of people in a logical fashion. It begins with the financial studies and it's garbage in, garbage out. And now we have a lot of wonderful accounting software out there that a lot of people who don't have an accounting background use and it's very hard, particularly in private businesses that don't have the money to be audited, to really get a good sense of what real statistics are out there, particularly when you're buying or selling businesses or investing. And the tax lien is really an interesting one because that is a very sophisticated and attractive investment when done right.

And it's a very good investment or it's a very good investment to promote I think if you are a fraudster, because it's complex and it's just hard. I mean, you've been looking through these financial statements of the PIP group and they are just all over the board, aren't they?

Yeah, their statements are unsatisfactory. They're set up to mislead in that they don't really make it clear and logical. Nor do they use the GAAP type of accounting, the generally accepted accounting practices that most real firms use. And you have to be real careful about that. And most people don't like accounting. Even the mention of the word wants their eyes rolled back. But accounting is very much like the blood test to a doctor. If the information is good and valid, and that's one of the first things you have to do, is find out whether or not the information is clear, consistent and true that leads you down the path of where fraud could be.

Yeah, yeah, it sure does. It sure does. One of the things I teach my real estate investor followers is I say follow commandment number three. And my ten commandments of successful investing is commandment number three says thou shalt maintain control. And the moral of that story is when you relinquish control of your financial future or your finances, any investment, when you relinquish control of your money, you leave yourself susceptible to three major problems. Number one, you might be investing with a crooked. Number two, you might be investing with an idiot.

And number three, assuming they're honest and competent, they take a big management fee off the top for managing the deal. And this is why I don't like Wall Street, I don't like non direct investments, whenever I break my own rule and I don't follow my own commandment, which I do break my own rule sometimes, and it's usually to my peril where I relinquish control, where I'm not a direct investor. That's why I just love buying little rental properties or doing little private lending deals or well, big rental properties too. I mean I have apartments and mobile home park too. With one of our clients, you know, these types of things you have direct control over, you're not leaving it to somebody else that you have to trust for honesty and competency and, and also not being too greedy in terms of just big fees that are legal, you know, that may be fully disclosed. What are your thoughts about that? You've probably never heard me talk about commandment number three, I suppose.

Well, your commandment is certainly a good one. I certainly agree with that. And having been a fraud examiner and also involved in the investment community for over 30 years, I would really agree with you. There's so much intangible assets out there. When you call an intangible asset, that's almost a paradox in terms when you're talking about data and information and intellectual property, it can be nebulous and even contracts. Now really, unless you have a lot of money and a good team of attorneys, they don't hold a bunch of protection either. In the book, that's one of the things I mentioned right up front, is that when you go into intangible investing, right away there's a disclaimer that you sign off on. Understand that history doesn't give any guarantee that that's what's going to happen in the future. You could say it's caveat emptor. When you get involved in dealing the future and intangibles, at least when you have property, you can liquidate it. There are many things you can do with it. But when you have an intangible security, for example, you don't have that material wealth, if you will, in your hand. Nowadays we can invest all over the world instantaneously, from carbon trading to currency trading. I mean, there's so much there and so much information. And yet outside of it all, is that ever present chaos factor. The future is not linear and investing is very much a linear thought process. You know, for instance, real estate, I mean, you look at the population growth and all that people have to have a place to live. Makes sense to be a real estate investor. And that's why most people, such as yourself have done so well, because it makes so much sense. The other thing too is that we are part of our nature is we like gambling. A lot of people like gambling. They like challenging the future. They like I'm so smart that I'm going to outsmart everybody else. So it gets into ego. And again, those human frailties that we all have.

Sure does. Yep. And those lead us down the wrong path very, very often. Any tips that you want to share with people about? I'm sure anybody listening would love to learn from a fraud examiner. I mean, maybe just talk about some of the sort of general ways that people commit fraud. Of course there are Ponzi schemes, there are way to commit fraud with accounting. There are things where people sell swamp land, in other words, or the Brooklyn Bridge, you know, in other words, saying there's really nothing behind that asset. Any sort of just broad general things there to watch out for.

Well, I think most important is to really understand yourself and what your needs are and why you do things. What motivates you when you go into invest? Is it for greed or is it escapism or do you invest solid for your future? Do you look at risk? Most people look at what I can make at the reward portion of it, but they don't look closely enough at the risk. And most successful investors will look at the risk first versus the reward and make sure it fits their risk profile. So I think a good self analysis is very important. In fact, that's one of the great things you can learn about investing and trading in particular is you can learn a lot about yourself. What motivates you? Is it ego? Is it, you know, underneath it all, do I want to make money to show that I am better than everyone else, or do I want to make money for security, for my future, for my retirement or whatever it is that motivates you? And I think that's first of all you need to understand your risk reward profile and why you're investing. And that's very important. I think a lot of people, I think get sucked into really smooth talk and excellent presentation. It plays on their excitement. It's something exciting in their life. There's that unknown that's out there. And I think that again it's get back to human nature. We're not machines, we are human. And I think we need to probably step back and take a look at that. Imagine yourself without electricity, living 100 years ago. What kind of person would you be? What would be important to you during those times? It's completely different. So putting yourself into another age, in different circumstances, who would you be? Because after all, you, your consciousness is the only thing that really exists. The rest of the world is something that you really see through your eyes and experiences.

Len, you know, you reminded me of something very important. The late Stephen Covey had a big impact on my life. I used to teach his material. I loved it so much. The Seven Habits of Highly Effective People and all his other great books. And you know, one thing that he talked about I think is important that you mentioned, you alluded to it a few minutes ago and that is the concept of the character ethic versus the personality ethic. And there are so many people in today's world. But I guess this has always happened, of course, because there used to be snake oil salesmen from the beginning of time, probably. Okay. But I don't know, it seems maybe more so nowadays where there are these very smooth people that have very good personalities that practice the personality ethic, but there's really, really not any character behind it. I really caution people to place importance on both of those things, character. And don't just get carried away by the personality ethic, judge the character ethic as well. Len, do you have any thoughts on that? And I don't know if you're a fan of the late Stephen Covey's work, but I sure was.

No, I don't recall ever reading any of his books. For me, I love reading science fiction because it really makes you extrapolate into the future. And really good science fiction writers really have a good understanding, in my opinion, of what's going on today and what might happen in the future. And it really stirs your imagination. So as far as reading gurus and people like that, I've kind of. Oh, as I say, for 74 years I've kind of worked out my own way of approaching the life.

But just the concept of what he's talking about is what I was getting at.

Because you kind of character is a hard thing to do when you're just meeting people. Because we've become transactional societies now. You know, we don't really know the people. We come together for short periods of time and there's a certain amount of protocol that's there and we're used to it. But before, when you lived with people and you didn't move around like we do in modern times, you really knew not only the person, but you knew where they came from, you know, their parents. So again, it's changing times, fascinating times.

That's a good point. You know, I remember watching an episode of all things Little House on the Prairie and I remember, what was it? Michael Landon, Was that the star of that show? I think, you know, he was talking to another man. And I remember he was kind of judging whether or not he could do business with him. And you know, the character and the trust, it really mattered. But people had more time to consider all that stuff back then. Nowadays we live in a very fast paced world. It's a very transactional world. So, yeah, you know, our ability to judge these things evolves very slowly, but the technology evolves very Quickly. And so it's, it's tough to keep up with today's world, isn't it?

Yeah, it is. But could be some technological solutions. For instance, corruption is, you know, a $500 billion B with a billion dollar problem in just the United States. And we have the technology now through using Tomograph and other medical terms to determine when people are lying. We can tell that and we need to use that to hold people accountable. For instance, airline pilots have to have physical exams every six months to make sure they're safe to fly the airplane so that they don't have heart attacks. Well, I think perhaps politicians or anyone that's in a position of responsibility, they should probably have to undergo a lie detector test. Only not just the current lie detector.

But the better one, the new one that actually works. Right, right.

So technology could help create some accountability. But when you say that there's something in the back of your mind says, oh, that someone's going to find out either how to game it it or how to use it.

Right, right, of course.

And that again, get back to our nature, you know, we might be Klingon type of thing. Hopefully not. But you know, what are you going to do about it?

Yeah, yeah, no, I know. I totally get it. What did you call that? A tomograph?

Yeah, I don't know if that's the right word, but it's an mri. But they really can see what neurons are firing in the brain and what's associated with reality. And they can measure all kinds of biological reactions to trigger correlations to a lie. You know, so it's something with a high degree of probability. Again, like I say, airline pilots, they have to have blood tests. Well, no big deal, it's a blood test. But they do have medical reasons that could disqualify them and they could lose their ability to make a living if they have some medical problem or they're using drugs. Yeah, drugs. Or anything. So, you know, what's the deal? These people that rob our societies of billions of dollars go scot free and we don't hold them accountable. We don't know how to.

That's a great point. You know, if you're in the position of being Ken Lay at Enron or Bernie Madoff, why shouldn't you have some sort of requirements to in essence, drug test you? I mean, think about it, folks. The functional mri, the FMRI machine is essentially a mind reading machine. That's essentially what it is. It's not quite there yet, of course, and I hate to sound like the Kind of Big Brother thing. And this shouldn't be done for all people. But look, if we're going to have licensing, if we're going to have drug testing, if we're going to have this type of stuff in society, why not test the people that are collecting millions, if not billions of dollars of other people's money that are in the position of trust? Either they're in the private field in the securities world, or they're in government. I mean, I couldn't agree more. Maybe technology can solve this problem. Why isn't we at the drug test? A truck driver who's driving a truck because he could destroy lives, right? Well, these. These people destroy other people's lives every day, you know, through the financial world, so. Absolutely. Good point. I love it.

Yeah. And again, it gets back to the idea that perhaps our species is a bit arrogant, thinking that we're too good for this kind of control.

Right.

You know, we might need another couple hundred generations of control to get us to where we're thinking the right way to survive. But then again, that's. That's science fiction. But when it gets down to everyday transactions, particularly investing in this world today, you do have to be careful and do the due diligence and really analyze why you're investing, why you're doing it, and what the risks are. And I think focus in on the risk and not so much the rewards. And don't listen to the news too much or be captivated by, like you mentioned, the smooth talk. It all makes sense. It all is good. Look for the weaknesses.

Good points, good points. The book is available on Amazon. Give us the title, the Meltdown Chronicles Again, right?

Yes, the Meltdown Chronicles.

All right, Len, thank you so much for joining us today.

It's a pleasure talking with you, Jason.

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