OTHER PEOPLE'S MONEY: The Rise and Fall of OPM Leasing Services by Stephen Fenichell

OTHER PEOPLE'S MONEY: The Rise and Fall of OPM Leasing Services

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KIRKUS REVIEW

The massive OPM Leasing fraud--in which corporate clients and lenders were bilked out of $228 million or so over a 10-year period--reprised in an abundance of fascinating detail. The rogues-to-riches story began in 1971 when two 23-year-old Brooklyn College grads--Myron Goodman and Mordecai Weissman--joined forces to launch OPM (named for the Onassis adage that the best way to get rich was off other people's money) and soon entered the computer leasing field. While even routine leasing deals can incorporate complex terms, the industry is a relatively simple proposition from a business standpoint. Third-party concerns like OPM secure title to EDP hardware, which they lease to users at rates below those obtainable from manufacturers. Lessors typically rely on lessees' credit to borrow most of the funds needed to acquire equipment. Perhaps their biggest risk is that the residual values of systems off lease will be negligible, owing to technological advances. The shoestring operators at OPM (whose heyday came during a period when IBM introduced new generations of ever more powerful processors every three years or so) introduced some new wrinkles to the emergent trade. Early on, they forged acceptance documents (on behalf of balky clients) to get their hands on bank funds. From this base, it was but a short step to more sophisticated ploys like double dipping, i.e., borrowing funds on a single machine from more than one source. Eventually, Goodman (a devout Orthodox Jew) and Weissman (the partnership's promotional soul) moved into mass subornation--notably, of employees and insiders at client companies. As a practical matter, the author observes, all too many vital role players (including attorneys, auditors, investment bankers, and lenders) did not have to be brought into the conspiracy. Wittingly or not, the likes of Chase Manhattan, Goldman Sachs and Lehman Brothers accepted virtually all OPM's representations at face value, thereby permitting the odd couple to keep the pyramiding scheme going for the better part of a decade. The beginning of the end came late in 1980 when an Iowa institution notified Rockwell International (whose contribution to OPM coffers aggregated close to $190 million) it was in default on a half-dozen lease agreements covering non-existent equipment. Just prior to exposure, Fenichell reports, the gravely ill (sarcoidosis) and drug-dependent Goodman expressed the hope his firm could be kept afloat long enough ""to beat the [Robert] Vesco record"" ($200 million). Goodman got his wish, but he lost his freedom and, to the best of anyone's knowledge, didn't earn much from his crimes. All told, six OPM plotters--none of whom seems to have gained much personal profit--are now serving time in federal prisons. They may not be much worse off than the estimable enterprises whose failure to exercise due diligence has sentenced them to unravel the handiwork of OPM's errant principals. Fenichell's account of the long-running seam has the excitement of a caper novel and a cast of uncommon, if less than sympathetic, characters. Sure-fire reading for anyone interested in the business of business.

Pub Date: June 1st, 1985
Publisher: Anchor/Doubleday