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Keeping up with economic crime

The state of Florida and its economic crime fighters have made inroads since the days of basic antitrust work and investigations of small-fry -- local used-car dealers for poor disclosure and low-rent telemarketers for false advertising.

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By ROBERT TRIGAUX, Times Business Columnist

© St. Petersburg Times
published March 17, 2002


In fighting the past decade of economic crime in Florida, state prosecutors probably suffered recurring dreams of at least one of the following:

-- Looking out over a vast field of hay, wondering how to cut it with a pair of scissors.

-- Kicking repeatedly to the surface of a lake for breath, while holding a good-size rock.

-- Trying to extinguish a gas-fueled house fire with an eyedropper.

Such was the growing volume of economic crime -- and the limited resources on hand to attack it at the Florida Attorney General's Office.

So many shady deals, so few hours in the day. That's how Les Garringer recalls his dozen years as an assistant attorney general heading the economic crimes division under Florida Attorney General Bob Butterworth.

In the humble -- no, let's say naive -- days of 1989, Garringer and his legal staff spent much of their time doing basic antitrust work and chasing small-fry, local used-car dealers for poor disclosure, or low-rent telemarketers for false advertising.

Suddenly, it hit Garringer and his peers. We're not making an impact. We're not really stopping economic crime. That used-car dealer? He'll be fined all of $500. That telemarketer? He'll reincorporate under another name in no time.

What followed almost smacks of a Florida version of Mr. Smith Goes To Washington

, the 1939 Jimmy Stewart movie in which a young idealist politician learns the nasty facts of how laws are really made in the nation's capital.

Garringer's revelation coincided with his agency's decision to pursue the formidable Southern Bell (now BellSouth) for failing to compensate businesses that let the company place pay phones on their premises.

To get Southern Bell's attention, the state opted to use the Racketeer Influenced and Corrupt Organizations law, known as RICO, against the company. RICO, which allows a prosector to seek triple damages against a defendant, is a powerful legal weapon that had been targeted mainly at Florida drug dealers. Using it against a business was new territory in Florida.

The Southern Bell case empowered Garringer and his crew and started a tougher era of business oversight in the state.

"We realized, "Hey, wait a minute! We don't have to worry about every Mom and Pop car dealer. There are some big businesses hosing people out there in Florida,' " Garringer recalls. "So we changed our focus to what corporate America was doing in Florida."

Thus began a decade of high-profile economic crime cases in the state against some of the country's biggest corporations.

* * *

In October, after 30 years of public service, Garringer left his job as assistant deputy attorney general. He opened a Tallahassee law office as a partner with St. Petersburg's James, Hoyer, Newcomer & Smiljanich, a successful law firm that mostly represents consumers and whistle-blowers in class actions against businesses.

For Garringer, the new job seems to fit like a glove. His intense focus for so long on business scams and fraud, and plain old corporate shortcuts made at the expense of Floridians has left him with a simple mantra.

Too many scams, too little time.

"All the companies we pursued had some way of hurting consumers," he says. "The companies liked to call it "sharp business practices' but, in fact, they were stealing from consumers."

Before working for the state attorney general, Garringer was an assistant state attorney, and an elected court judge for Monroe County in the Florida Keys. He graduated in 1967 from Old Dominion College in Virginia, then served a tour in the Army in Vietnam. He received a law degree from Florida State University. Married with three kids, he's known to pick a mean Gibson Mastertone banjo.

* * *

With Garringer charging ahead on economic crimes, the 1990s proved a mother lode of business scandals for the Florida Attorney General's Office.

Sears, Roebuck & Co. was investigated repeatedly and may have set a modern record in the state for being charged with scamming its customers in so many different ways. Car repairs that were never done. Used car batteries sold as new. Pressuring customers who already had declared bankruptcy to pay Sears for charge card debts. Selling bogus termite treatments to homeowners. The list went on.

Most of the charges resulted in Sears denying wrongdoing, but agreeing to make hefty refunds to customers and change its practices.

Then came the wave of fraud in the 1990s by the giants of the insurance industry. MetLife, John Hancock and Prudential were among the insurers charged with churning, a tactic used by insurance agents to get customers to swap their existing policy for new and more expensive coverage. Again, the state exacted expensive settlement agreements from the insurance companies, as well as commitments to police themselves internally.

The crackdown on economic scams became a source of humor among Garringer's staff.

"We used to kid that by the mid-'90s, nobody felt that they could buy anything from Sears or fly on an airplane," Garringer says.

Other major companies also felt the bite of Garringer's staff. Humana settled after charges it was deceiving people into joining the company's HMO.

Last year, in the Ford Explorer-Bridgestone/Firestone tire scandal, Garringer was one of seven attorneys and investigators to examine more than 1-million corporate documents and question witnesses before preparing lawsuits against both companies. (Firestone settled. Ford remains under investigation.) "For us, it was not a matter of working these big cases because that was all we had," Garringer says. "We worked the big cases because it was all we could handle."

Too often, corporate CEOs would come to state investigators and admit they had no idea the company was engaged in any wrongdoing. Too often, the state attorneys would find companies with no compliance and no internal controls.

Such a heavy dose of economic chicanery has clearly made Garringer no fan of corporate America.

He says any sense of consumer responsibility by the business community seemed to fade in the 1970s. He blames the country's culture of economic expansion at all costs.

"It became obvious by the cases we worked that the consumer was at the bottom of the pole," Garringer says. Many companies investigated were so awash in questionable activities that Garringer's group purposely kept their inquiries tightly focused. Otherwise, he suggests, the state investigation never would have stopped.

At times, Garringer sounds like the doctor who's seen too many messy surgeries. Or the bank's loan collector who thinks most borrowers are deadbeats.

Then again, he's been privy to business practices in Florida that we might rather not know about.

Says Garringer: "It's a bad time to be a consumer."

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