Ex-con Justin Paperny has simple advice for future business executives: “If you come across someone in business who is dishonest, unethical and cunning, don’t try to help them. Just run.”
In September, Dr. Lynne Andersson invited Paperny, a former investment banker who served an 18-month prison sentence for a fraud conviction, to her Business, Society & Ethics class.
Paperny, who lost both his banking and real estate licenses as a result of his conviction, tours the country speaking to business students and professionals about his experiences in hopes that they will avoid similar fates.
Paperny’s presentation to Andersson’s class took students through his life story, beginning with, “I was raised perfectly.” He shared how he became entangled in fraud, how he got caught, how he whittled his sentence from seven years to just a year and a half, and how he lost $1 million in the process.
“I invited Justin to our class so that students could begin to understand the significance and impact of white-collar crime,” Andersson said. “I wanted them to understand the values of individualism and competition inherent in a competitive corporate culture such as investment banking and see how easily individual employees can be affected by these values.”
Paperny explained the complexity of his story and how the corporate atmosphere can get under the skin of new executives. He shared how early on he began withholding his colleagues’ commission out of vengeance when his work was not recognized.
“The paycheck wasn’t enough,” he said. “I needed to be told I’d done well. I needed the kudos.”
Paperny told students just how glamorous and high rolling his lifestyle had been – more than $150 million under his management, irresistible transfer deals from major investment firms, cars, relationships, exotic vacations.
He explained that when he saw a client lying to other potential investors, he made the mistakes that landed him in prison, stripping him of his glory. While working for UBS, Paperny had a client who was charged with repeatedly telling other investors his hedge fund, the GLT Venture Fund, L.P., which raised $14.1 million, was yielding higher returns than it was. When that client was indicted, he mentioned Paperny’s name, and in 2008, Paperny was charged with conspiracy. By cooperating with prosecutors, he shaved more than five years off of his initial prison sentence and reduced his restitution.
“I thought by keeping my mouth shut I was protecting my client,” he said. “All I was doing was imperiling my future.”
Paperny told students that his presentation benefits him as much as it does anyone else. Paperny said he retells his story because, though it means reliving his biggest failures, he gets value and fulfillment from doing so. And in a world where, according to Paperny, three-quarters of new executives will witness something illegal or unethical within their first year, he believes his insight may prevent others from falling into similar traps.