Bipolar Disorder Leads CEO to Embezzlement and Suicide Attempt

By · Tuesday, May 19th, 2009

Many men who once held discretion over financial accounts that exceeded hundreds of millions of dollars slept on steel prison racks beside me. They used to oversee the careers of thousands, though their imprisonment required them to submit to prison counselors who could assign them to jobs cleaning toilets, scrubbing showers, or raking rocks. Before confinement, they socialized with political leaders, mavens of industry, and other society patrons. As prisoners, they shared shower space with tattooed gang members and inveterate criminals.

What motivated the decisions that led those people who previously held positions of privilege and power into the clutches of the criminal justice system? For many, an inattention to an ethical code by which they professed to live began a slide into criminality. Others cited outside forces that influenced their decisions. In an effort to provide perspective from such prisoners for those who studied ethics, I spoke with former executives who served time for white collar crimes. When they agreed, I conducted more in-depth interviews and wrote their stories.

I told one such prisoner, whom I referred to as Robert, about this project on which I was working for Professor Jana Schrenkler. Professor Schrenkler taught ethics to students at Saint Mary’s University of Minnesota. Robert agreed to respond to her questions honestly on condition that I masked his identity. Robert’s case had attracted attention from the national business media and he didn’t want to confront those negative stories again. With hopes that his responses could provide some insight into the mind of a former CEO, I sat with Robert for several hours.

Robert had a patrician’s bearing and demeanor. He was lean, stood well over six-feet tall, and had a full head of white hair. His appearance suggested a lifelong devotion to asceticism and discipline. Each morning at six o’clock after the prison guards unlocked the housing units, I saw Robert heading out to begin his brisk walk around the track. At 64, he seemed vibrant and in excellent health.

After earning a master’s degree in economics from a prestigious university, Robert built his career in a Fortune 500 company and remained with that organization for 15 years. When he resigned in the early 1980s, Robert held the title of Executive Vice President and presided over a budget of $600 million. He resigned in order to launch his own company in financial services. It was a company that Robert owned individually, but that managed more than $350 million in institutional funds. As the founder and Chief Executive Officer of his company, Robert had cultivated a high level of trust with his clients, most of whom were officers in publicly traded corporations or large institutions.

Despite outward appearances of total control and self-mastery, Robert said that he suffered from mood swings since childhood. They became more severe as he matured. He described sinking into deep depressions for months, and also passing through several months of manic highs. Robert’s wife and children described him as eccentric, never considering that he could be suffering from a mental disorder.

As the CEO of his firm, Robert had more than 100 employees to whom he could delegate responsibilities. The power that came with his position included an ability to take extended periods of time off, and provided unfettered control over all financial accounts. To cope with what he characterized as depression, Robert said that he began diverting funds from customers to his personal accounts. Over a period of several years, Robert embezzled nearly $10 million. He had been successful in hiding those misappropriations, but when Robert concluded that the fraud had gone on for too long, and that he could not reverse the damages he had caused, he attempted to take his life.

He e-mailed a suicide note to his wife and to a friend, thinking they would not receive the note until after his death. Robert drove to a secluded estate where he liked to spend time alone. He brought a handgun to his chest and pulled the trigger. Caretakers of the estate discovered him. They called for emergency medical attention, and a helicopter transported Robert to a trauma center. The gunshot wound missed his heart, but Robert required several major surgeries and remained hospitalized for two months.

Upon regaining consciousness, Robert divulged all that he had done to his wife and children. His son, who was a lawyer, retained a criminal lawyer who came to speak with Robert while he was recuperating in a hospital bed. Robert insisted on notifying the authorities about his embezzlement and cooperating fully to assuage the feelings of guilt that were tormenting him.

While recuperating, Robert underwent treatment for the mental disorder that led to his attempted suicide. Those who treated Robert diagnosed him with a severe case of bipolar disorder. He had been suffering from a chemical imbalance that caused the depression and manic mood swings. Those imbalances, he concluded, led to an irrationality and were the root cause of his actions. His mental instability notwithstanding, Robert offered a complete confession to authorities and agreed to accept whatever sanction the court imposed. The judge sentenced Robert to serve nine years in prison, and the criminal proceedings resulted in the complete loss of a fortune that once exceeded several million dollars in value.

Robert had been incarcerated for one year when we spoke. His responses to Professor Schrenkler’s questions follow.

1. Do you feel you had a good understanding of your personal core values? How did those core values guide your decisions while on the job?

When I asked Robert this question, he expressed a total commitment to personal core values such as honesty, integrity, loyalty, and the virtues that others associate with good citizenship. He married in 1968. Together with his wife, Robert reared two children, both of whom graduated from law school and now work as attorneys. He was a man of faith and considered the contributions he made to his community an integral part of his identity.

Those core values guided Robert’s decisions with regard to his family life, his professional life, and his social life. The bipolar mental disorder that afflicted him, however, influenced his behavior. Without prior diagnosis or treatment, he said that he sometimes lived with delusions that rules did not apply to him. During the times of depression, Robert said the unmedicated bipolar disorder caused him to lose track of those core values. It was during such times he converted funds from client accounts for his own use. He inappropriately used a portion of those funds for venture capital projects and also to purchase unnecessary luxury items. Such expenditures, he said, were made to pull him from the depression. He needed to feel invincible and with access to deep pools of client money, Robert could live as if rules didn’t apply to him.

2. What was the most important aspect of a career in business for you? What motivated you the most?

Robert said that from the time his career began, he derived a great sense of satisfaction from creating efficiencies and solving complex problems. While working his way up the hierarchy of the Fortune-500 company where Robert began his career, he said that the corporation rewarded him with large bonuses for bringing projects in ahead of schedule and under budget. Although he appreciated the financial recognition, he felt motivated most in organizing a team and a system to accomplish a task well.

Once he launched his own venture, Robert said the most important aspect of his career was building relationships with leaders of great American businesses and providing them with excellent service. Cultivating their friendship and trust motivated him, he said, when he was thinking clearly. Robert cried when discussing those relationships, as he recognized that there was nothing he could do to make amends for the losses people incurred as a consequence of his actions.

3. Who do you think is responsible for the ethics of a company?

Robert recognized that leadership within the company must set the ethical code. He understood that he had a responsibility of lending by example, and his position allowed him to manifest that leadership outwardly. Internally, however, he said that he felt deficient and knew that he was not living up to his own code of ethics. Robert said that the symptoms of his disorder were more powerful than his ability to lead. He was trying to survive the lows, the depression. The response he chose resulted in lies, cover-ups, and an endless struggle with internal conflict. In retrospect, Robert said that he was amazed he had survived as long as he did.

4. Did you have a written code of ethics and did you base your decisions around those codes?

While in the earlier stages of Robert’s career, when he worked within the executive ranks of the Fortune-500 company, he said that all decisions were supposed to be made in accordance with a strict, written ethical code. As a senior executive, Robert evaluated subordinates in accordance with their compliance with the ethical code. He said that he abided by the code to the letter and that he identified personally with every virtue expressed in the code.

In leading his own company, Robert said that he did not write a code of ethics. The services he offered required a well-educated and highly trained workforce. They had a personal code of honesty that Robert said he respected. He did not feel the need to write out an ethical code, as the office was less formal than the large corporation where he had begun his career.

5. Did you believe your business decisions followed your company’s core values?

Robert said that he absolutely lived by a core set of values in his lie and that he made all business decisions in accordance with those core values while he was in control of his senses. As Robert grew into his 50s, however, he said the symptoms of his bipolar disorder caused him to deviate from those principles. That was when he began converting client assets to his own account. Through profligate spending, Robert made futile efforts to lift his depression. Those decisions resulted in millions of dollars worth of losses, including the forfeiture of Robert’s total net worth.

6. Did you think that, given your position as CEO, you should have been held to a higher ethical standard?

Robert acknowledged that he should have been held to the highest ethical standard. Ultimately, however, he was the only person who could judge his conduct. With an undiagnosed and unmedicated mental disorder, he was incapable of living up to the ethical principles that he held of high value.

7. Do you feel your employees were equipped to recognize ethical dilemmas?

The employees in Robert’s company were well equipped to recognize ethical dilemmas as they were highly educated professionals. They only had degrees of access to information, however, and could not judge Robert’s actions. He was able to cover-up the fraud as the CEO of a privately held company. Toward the end, however, some of Robert’s key employees recognized discrepancies. They resigned from the firm and Robert could tell that he had begun to lose respect as a leader.

8. Explain the corporate culture within your company during your involvement.

Robert said that he created a familiar rather than stuffy corporate culture. He did not socialize with employees, but he treated everyone with respect. He provided first-rate offices, computer equipment, chairs, and work stations. On Fridays, provided the work had been done, Robert permitted employees to leave in the early afternoon. People enjoyed their careers, and Robert said he took pride in treating them well.

Although Robert did not socialize with employees, he did make friends with clients. He expressed great sadness in acknowledging that those friendships with his former clients had been lost.

9. Is it possible to have a very aggressive corporate culture yet foster an ethical environment?

Without question, Robert said, a strong leader can foster an ethical environment in a very aggressive corporate culture. In his business, which earned revenues based on the number of employees within each client’s organization, Robert considered it crucial to earn customer trust through offering outstanding service. Robert’s employees earned a fixed salary plus bonuses, though the bonuses were tied to customer service. Every individual who worked with Robert had a motivation to nurture customer relationships, as the corporate revenues were tied in a fixed way to employee headcounts for customers, not commissions. The fraud that occurred resulted from Robert’s mental disorder, not an aggressive corporate culture.

10. If you could choose to redo anything, what would it be?

Robert regrets that he lacked the insight to have recognized the symptoms of his mental health disorder. He understands that he was highly educated, as was his wife. Nevertheless, Robert never sought psychiatric counseling or any type of treatment for his disorder. Instead, he said that he sought to even out the mood swings by spending money in reckless ways. With access to tens of millions in client accounts, that decision sank him into deeper problems.

Robert expressed deep regret at having made decisions that cost others significant amounts of money. He regrets the humiliation and financial ruin his actions have brought to his own family. He regrets that he put those who love him through turmoil during the ordeal that followed his attempted suicide.

11. Did anything good come out of this?

Although Robert expressed sadness that his actions caused financial losses for people he cares about, he said that upon his recovery from the suicide attempt, a healing began that enabled his family to grow closer together. As a consequence of the publicity that surrounded his case, both of his children had to move from California to the East Coast. They were lawyers and the media coverage of Robert’s crime harmed their careers. Robert’s wife of more than 40 years had to return to work as all of the family assets were liquidated to help cover the loss. Despite the pain that Robert’s actions caused to so many, he said that once he began the medical treatment for his mental disorder, he received medication and therapy that helped balance his moods. Over time, that treatment allowed his family to grow closer together.

12. What is your biggest regret?

Robert said his biggest regret was that he had made decisions that caused irreparable harm to many people. The financial losses were significant, and he understood that although his own family suffered the most loss of all, others had also lost in ways that he could not make whole. This regret, he said, caused an internal grief that was far worse than the justice department or imprisonment could inflict.

13. What roadblocks do you expect to encounter upon release?

Robert said that his sentence will keep him in prison until he turns 71. Despite the age, he will have to find some kind of viable employment. The felony precludes a return to the corporate sector. Robert expects that he will support himself by making some kind of use from his extensive knowledge of computer networks, though it likely will be through small business as an independent contractor.

14. What advice would you provide a business student?

Robert said that the most important advice he could offer a business student would be to value the virtue of honesty. A successful businessperson had to feel truth within himself. That meant looking in the mirror and knowing that he or she was true to the principles of truth. The pain that comes from deceit extends far beyond the individual, and in some cases, it has no end. Robert said that valuing honesty and truth would be the best advice he could give to a student.

15. How do you feel about a business ethics class questioning you on ethics?

Robert said that after he healed from the surgeries that followed his suicide attempt, and after he was released from the psychiatric hospital that diagnosed his mental disorder, he revealed everything that he had done to the FBI. Law enforcement had not known about the fraud, so Robert walked through every aspect, and provided the FBI agents with records of every transaction. He voluntarily liquidated all of his assets in an effort to recompense losses. That total cooperation, he said, brought a catharsis. Responding to the questions of a business ethics class continued the slow process of cognitive therapy.


In speaking with Robert for this project, he broke down in tears several times. I was surprised, as I did not know about his suicide attempt, his bipolar disorder, or much of anything about his case. To me, he was simply another prisoner whose demeanor and image fit that of a successful CEO. We have many such men who now serve time in prison.

I asked Robert whether he had apologized to the victims who suffered financially from his crime. He said that he could not find the strength to reach out. Part of the therapy, he said, was trying to keep his mood swings from elevating. It was a constant struggle and one that he had not yet mastered. It was the reason that he asked me to conceal his identity. The past still haunted him, tormented him with shame and guilt. As a defensive mechanism, he said that he had to protect his mental health, at least for now.

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