It Pays To Check Your Financial Statements

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DAVID GREENE, host:

Bernard Madoff will be sentenced today. In March, he pleaded guilty to a Ponzi scheme that defrauded investors of $65 billion. Earlier this month, another investment advisor named Matthew Weitzman was arrested and charged with stealing $6 million from his clients. Now that doesn't compare to Bernie Madoff's haul, but Ron Lieber finds the Weitzman scandal more insidious.

He writes a personal finance column for The New York Times. So he covers topics like this. But he was also one of Weitzman's clients. He spoke to us about his near miss with becoming a fraud victim. Ron, tell us what happened.

Mr. RON LIEBER (Columnist, The New York Times): Well, I originally found Matt - it was about five or six years ago when I was working for the Wall Street Journal and we were doing that story about financial planners and how to get advice. And my wife and I actually liked Matt a lot. He gave us some very good advice. And then a couple of months ago, we come home from vacation and there is this letter from Charles Schwab saying that there are, quote, "irregularities" in some of the accounts associated with Matt's firm.

GREENE: Never what you want to hear.

Mr. LIEBER: Well, I said words that are unlistenable on radio and I knew at that point I was in some real trouble.

GREENE: So Matt was actually giving you some good advice before he became charged with stealing a lot of money.

Mr. LIEBER: You know, he was a certified financial planner. He had gotten his MBA at Columbia. We had checked his records before we signed up with him and they were all clean.

GREENE: You actually were not part of the scam. Weitzman did not steal from you.

Mr. LIEBER: We did not lose any money in this alleged scam. I spent, you know, several hours gathering every last paper statement we could get our hands on to go line by line through everything. But by then I'd already figured out that what appeared to be going on was wire transfers out of accounts that had not happened with us and we were not victimized.

GREENE: You've written about how you feel that this case is even scarier than the Bernie Madoff fraud case. Why is that?

Mr. LIEBER: Well, the situation with the Madoff case is that he was really only dealing with the rich and the connected, but all of us can go see a certified financial planner and pay $100 an hour - if they have a little more money, maybe one percent of their assets. We all are potential victims here and the scary thing here is that Matt Weitzman looked so good on paper and now he's accused of these horrible crimes.

GREENE: And just briefly, how big were these chunks of money that Weitzman took or is accused of taking?

Mr. LIEBER: The government accuses Matt of taking $3 million from his father-in-law. There was one woman I spoke to who says that they went to see Matt when her husband was dying and he said all I want is for my wife to be taken care of and she's accused Matt of stealing from him while he was dying, and then from her after he was dead. He appears to have gone after the weak, the vulnerable, the distracted, the ignorant and not people like me who read their statements carefully.

GREENE: And Ron, I understand that you've taken some heat from other financial planners who say that you might be really hammering away at this story not as a columnist for The New York Times but because you had some personal experience with this guy. What have you - how have you responded to that?

Mr. LIEBER: Well, the basic allegation doesn't make any sense to me, because I didn't lose any money. What they're really upset about is that they're not used to being under the hot lights for the very first time. And they say well, you know, why don't you go pick on stockbrokers who are robbing people blind all the time.

And that's been going on for years. But this is really the, you know, one of the first times that we've seen a cluster of people who held themselves out as the good guys stealing or being accused of stealing from their clients.

GREENE: And so what is your advice to people, I mean, if they're looking for a new financial planner or if they have one that they seemed to like. Are there questions you think they should be asking?

Mr. LIEBER: I think it's completely fair to go to your financial planner or your stockbroker and to say point blank, how do I know for sure that you're not stealing from me? Prove it. There are certain kinds of frauds, certain kinds of theft that you can't always prevent. If somebody is forging your signature on wire transfer forms, you may not be able to stop that. But you can read every word of every statement and make sure that nothing bad is happening. Another thing that people might consider is not allowing their financial advisors the ability to trade on their accounts.

You know, advisors want the ability to sort of make a move without having to ask for permission. But if you're the sort of person who has the discipline to make the move yourself when your advisor calls or emails and suggests it, then keeping control of your accounts is not half bad idea.

GREENE: We've been talking to Ron Lieber. He writes a personal finance column for The New York Times. Ron, thanks for talking to us.

Mr. LIEBER: Thanks for having me.

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