All that Gliters is not Ethical – Just ask Ingrid Lederhaas-Okun!

There is a fascinating story of greed unfolding about Ingrid Lederhaas-Okun, a vice president at Tiffany & Company who, according to the New York Daily News (July 2, 2013) allegedly, “…checked out over 165 pieces jewelry that went Ingrid Lederhaas-Okummissing, including numerous diamond bracelets, platinum or gold diamond drop and hoop earrings, platinum diamond rings, and platinum and diamond pendants.”

Using her husband and a friend as part of the scheme, her accomplices re-sold them to the missing jewelry to tune of $1.3 million. If convicted, she could be facing 20 or more years in jail. As the story is so new, it is difficult to pin-point all of the aspects of her motivation however, there are some lessons we are already being taught.

The Opportunity and Possible Rationalization

She was hired as an assistant buyer in 1991 and worked her way up to being in charge of product development in 2011. A 20 year track record of accomplishment is no small matter. Being intimately involved in company operations for 20 years can lead to a deep level of knowledge. Such knowledge may be used for good or bad.

She was able to determine that the company didn’t keep close tabs on items $10,000 or less. As a vice president of product development, Ms. Lederhaas-Okun undoubtedly had the permission to check out pieces of jewelry for design and pricing purposes. She never checked them back into inventory. She was somehow able to leave the building with these 165 or more pieces and convince her husband and a friend to re-sell the pieces. It was pure profit.

We might speculate, though speculation is always dangerous.

We do know that neither the husband nor friend has been charged. The retailers, writing checks on the stolen goods have not been charged either, and that provides us with a highly disturbing pattern of behavior. She lied.

Both the New York Daily News and the Associated Press have indicated that she piled on lie after lie after a store-wide inventory could not locate the missing pieces. Is it possible that she was so over-taken with greed that she was willing to throw away her husband, friend, career and reputation? It would appear to be so.

How, I wonder, did she convince everyone to essentially “fence” these pieces? Did she tell her husband that these were discontinued items that she could buy for dimes on the dollar? Did she convince her husband and friend that she could pay for the pieces “on-time,” and give Tiffany & Company back the money when they were sold?

Greed is insidious, but more than that, it usually doesn’t happen in a vacuum. Was she angry at Tiffany & Company because she felt she should have been paid more? Did she desire higher status? Was she disrespected and wanted to “get back” at someone? Outside of work, did she and her husband have financial problems? Were drugs or other illicit activities at play?

Or was it simply an opportunity to “make a killing” because she convinced herself she was smarter and brighter than everyone else?

20 Years – A Long Time

As we immerse ourselves in the culture of any employment situation we get increasingly comfortable with our environment and they get comfortable with us. We work hard and over time there is a level of trust.

But can there be too much trust?

What did Tiffany & Company do in terms of giving her the opportunity to facilitate her ability to feed her need? Is there a shared ethical responsibility here? It is the employee’s fault that she was a thief. No matter how it may be packaged by her attorneys, this employee, educated at the finest of colleges, and living in a beautiful area of Connecticut, is a common thief.

To that end, are people in such positions of trust ever reviewed as to their security status? Is there ever a routine review by an independent agency as to all security systems in place?

I put in a lot of air miles each year, but I am pretty sure that Delta Airlines isn’t about to let me walk onto an empty plane, let me sit for a while, and then allow me to fly it to Tahiti. I know it’s a silly example, but why should an employee at a prestigious jewelry company be allowed to check out pretty much whatever she wanted? Further, if the employee checks out a ring or pin or bracelet, why wasn’t there a procedure in place for returning the piece within a day, or a week or even a month later?

I also understand that a company such as Tiffany & Co. handles millions, hundreds of millions of dollars of inventory every day across its operations. Perhaps a $10,000 piece has relatively little value, but what of 165 or more pieces? Using perhaps another silly illustration, my bank handles hundreds of millions of transactions each week, but would they not notice if $10,000 disappeared each day for 165 days? Of course they would.

So why, I might ask would there not be all kinds of alarms set off when 165 pieces are not returned?

There was opportunity for Ingrid Lederhaas-Okun borne out of familiarity and some type of need, but Tiffany & Co. desperately needed to reign in a relaxed set of procedures that enabled this employee to walk off with a treasure.

The glitter is sometimes not all that it’s cracked up to be.

While there will be more to this story as it unfolds (check out http://chuckgallagher.com/blog)…YOUR COMMENTS ARE WELCOME NOW!

 

Posted by Chuck Gallagher in Business and Personal Ethics, business ethics, white collar crime, You Gotta Be Kidding and tagged , , , , , .

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