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Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerThe news came following reports that several public companies had executives whose biographies listed college degrees they didn't earn. The University of Southern California had no record of Lanni's degree.
MGM Mirage became aware of the situation after someone from USC contacted the company to warn it about inquiries regarding the degree from the Wall Street Journal and fraud investigator Barry Minkow. Lannni says that his sudden resignation has nothing to do with the credentials issue, and that this move was based on his desire to live with his wife again, who has been living in California.
It's hard to believe Lanni. Like other gaming companies, MGM Mirage is struggling because of the economy. This is no time for the resignation of the CEO with no warning or notice. Adding to the unbelievability factor is Lanni's explanation. Like other executives caught fabricating their credentials, he came up with a silly (and untrue) story to cover the deception: He says that he took MBA classes and never finished the degree, but was awarded an honorary MBA from the school in the 1970s.
USC said that only five honorary MBAs have been awarded in their history, with the last one in 1933. It's bad enough getting caught lying about your credentials. It's even worse when the story you use to cover up for the lie is found to be a lie as well. Unfortunately, it's not as much about the degree itself as it is about the lies and the cover-up. Those types of behaviors out of upper level executives tend to set the tone for the rest of the company. Fraud in the upper echelons sends a message to the rest of the employees that dishonesty is tolerated and condoned, which is never a good precedent to set.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.
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