Kevin McCarthy visits Fraud Busting. He unknowingly participated in a years-long stock fraud scheme and ended up in jail for it. Looking back he knows he rationalized away the red flags that said big trouble was coming. He had massive blind spots and developed a system so you can find yours too. You’ll learn how you can find the things you’re NOT seeing both to keep yourself out of trouble and be a more effective leader. You’re gonna want to make sure you get his book Blind Spots and take his complimentary online assessment to learn vital info about yourself and what you’re not seeing.
Here’s the Transcript
Traci Brown: Kevin, thank you so much for coming on Fraud Busting! It’s really neat to have you here today!
Kevin McCarthy: Yea, my pleasure. Thanks for having me.
Traci Brown: We’re both . . . a friend of ours introduced us. We’re both members of the National Speakers Association, and I just had never . . . I guess we just never bumped into each other there, so in a pandemic, I guess this is how we meet.
Kevin McCarthy: Yea, right. It certainly makes it easier.
Traci Brown: Yea, yea, for sure. Now, you got your CSP, you are a certified speaking professional, a couple years ago. I got mine last year.
Kevin McCarthy: Oh, congratulations.
Traci Brown: So, you got to walk across the stage at our conference, because that’s the highest earned designation a speaker can really get, and it takes a lot of peer review and customer reviews and video reviews and the whole thing.
Kevin McCarthy: Yea.
Traci Brown: High five for getting that.
Kevin McCarthy: Yea, likewise.
Traci Brown: I didn’t get to walk across the stage last year because there was no conference.
Kevin McCarthy: Right.
Traci Brown: But some friends sent a singing telegram to my house to celebrate, so I feel like I’m covered with the celebrations.
Kevin McCarthy: Nice, nice! That is nice.
Traci Brown: Yea, yea. Let’s talk, just a little bit of small talk about you. Where are you right now?
Kevin McCarthy: Scottsdale, Arizona.
Traci Brown: Oh, okay. Okay. It’s warmer there probably than here in Boulder. We got, what, eight inches of snow last night.
Kevin McCarthy: Oh my.
Traci Brown: Not too psyched about that.
Kevin McCarthy: Well, we had eight inches of sunshine.
Traci Brown: Ready for spring.
Kevin McCarthy: I don’t want to rub it in though.
Traci Brown: Oh yea. Well, thanks. What have you been . . . you have been off the road this year, probably like most speakers. What have you been doing with your time?
Kevin McCarthy: Well, you know, I looked at this pandemic as an opportunity to do some things that I’ve always wanted to do, like bucket list type items, so I started some of those projects.
Traci Brown: No, no, no. Wait, wait, wait. What are those?
Kevin McCarthy: Well, like . . . So, I started taking Spanish lessons.
Traci Brown: Oh!
Kevin McCarthy: I always wanted to take Spanish lessons. It just never was a priority for taking up time. I took golf lessons last summer, which has been wonderful. I’m just taking advantage of a little bit more time for exercise routines and self-care and personal care.
Traci Brown: Oh, I love it. Yea! I did a little more of that too. I did golf lessons as well.
Kevin McCarthy: Nice!
Traci Brown: We’ll have to go play the next time we meet up, me and you, let’s go.
Kevin McCarthy: Right. Yea. We’ll go hack up the greens really well.
Traci Brown: Yea, well. Let’s try to leave the greens intact. We can hack up the fairways.
Kevin McCarthy: I didn’t take putting lessons. I just took golf lessons.
Traci Brown: Okay. You can hack up the greens. Let’s talk a little bit about you. I’m so fascinated to know more about your story because you ended up getting kind of sucked into a fraud scheme that you didn’t know anything about. Then, there has been a lot of really cool work I think that you’ve done on the other side of that, like trying to understand things more deeply and how you didn’t really see what was coming. So, you want to take us into the story? And then we’ll talk about what you’ve been doing since then.
Kevin McCarthy: Yea, so where to start. It’s such a long story, and we’ve got such a short time together. Alright, so let me go back. I have been a self-employed entrepreneur most of my career. Starting one business, moving onto another business, I had a small number of successes in the past and more failures. Then I ended up owning the 13th largest Century 21 franchise in the country in Phoenix, Arizona.
Traci Brown: Wow.
Kevin McCarthy: It was pretty cool. One thing led to another. I ended up being on the board of directors for 31 of the different franchise owners in the Maricopa County area. That led to a speaking engagement back in 1994 with Century 21 so that’s when I officially got paid to start speaking. Of course, they overpaid me because I had no experience.
Traci Brown: Take the money and run kid! Take it!
Kevin McCarthy: I know. Right. It was great. I got in the speaking industry completely by accident. I spoke for Century 21 initially, all over the western states, and then branched out nationally. Then I started a dot com company. In 1995 I sold my real estate company and started this technology company, helping realtors get onto the internet. It was actually a precursor to realtor.com, and realtor.com actually tried to buy my company. I said no. That was really stupid.
Traci Brown: Uh-oh.
Kevin McCarthy: They went public. I had no idea what that really meant back then. Then HomeSeekers.com bought my company. I became a paper millionaire for a brief moment. That was pretty amazing, pretty awesome feeling. Yea, that was huge. All of this is really important to the story because after I sold my company with HomeSeekers and then the dotcom bubble burst, and I lost my portfolio because of my stupid choices on margining it. Then I met a buddy from church who said he had an investment opportunity, so I close to the last $10,000 I had in savings at that point after the dotcom bubble burst and invested it into a startup company. Well, the company had actually been in business for six years at that point, but they were getting ready to go public themselves, and so I became a stockholder in this up and coming preventative healthcare company. Then a few months into that position as a stockholder, my same friend said the CEO wanted to talk to me about a consulting position. He had heard about my biz/dev background. Now, flash forward, I am a stockholder, and now I am a consultant directly to the CEO of this up and coming IPO. I’m pretty stoked.
Traci Brown: Okay. It sounds good. Yea.
Kevin McCarthy: Yea. And my head is pretty big, and my ego is super inflated. It was ridiculous. But because my mindset and my ego and my growth in entrepreneurship, there were a lot of blind spots that I didn’t know where there, and they were about to become known. So, what I didn’t realize is that this boss, who I had become a consultant for, and worked, it was supposed to be 30 to 90 days, I ended up with him 15 months of his seven-year run. It turns out he was running the largest stock fraud in the history of the state of Washington.
Traci Brown: Oh, boy.
Kevin McCarthy: So, for seven years, he took $91+ million dollars from over 5,000 investors.
Traci Brown: Wow! Was it a Ponzi scheme kind of situation?
Kevin McCarthy: Not a Ponzi scheme. A Ponzi scheme is more like taking investors’ money and paying other investors dividends, so it is just a shifting of money. He was just straight up selling a dream, and people by the droves were buying into the dream. He was selling stock illegally because he didn’t register properly and do all the things that the SEC would normally require.
Traci Brown: It’s the out of the trunk of his car? That’s what I’m hearing. Selling stock . . .
Kevin McCarthy: No, no, no. I mean, that could be the conjured-up image. He had a legitimate brick and mortar business.
Traci Brown: Okay.
Kevin McCarthy: He had a really great story and a really great front and a beautiful prospectus. He just wasn’t doing things the way he should have been doing them legally, as far as registering with the SEC or the state at the time. So people were buying stock, and people kept on buying stock. They would invest once, and then multitudes of people would buy more. Some of the stockholders had been investing and buying stock with him for five of the seven years. He was just brilliant at what the FBI later called kernels of truth stuffed with a lie.
Traci Brown: There you go. Alternative facts. That’s what that sounds like.
Kevin McCarthy: The what?
Traci Brown: I said it sounds like alternative facts.
Kevin McCarthy: Yea. Yea. Yea. He had a great façade. I mean, he had famous people supposedly on his board. John Elway was supposed to be a member of the board. Trent Dilfer actually wore the Zynetics company baseball cap on national television the year that they won the Super Bowl and during interviews. How did he arrange that? He just probably paid for that spot on the top of his head with the cap.
Traci Brown: Oh, yea. Absolutely.
Kevin McCarthy: He bought that kind of publicity. He had Shaquille O’Neal and Kobe Bryant, the late Kobe Bryant, had purchased – well, allegedly, I never did find out if this was true, but I actually met Kobe Bryant and Shaquille O’Neal at a birthday party thrown by the boss on their behalf. He flew several of us to LA, picked us up in limos, brought us to this birthday party, all of this façade, we had no idea because it all looked real and it all felt real. You meet a celebrity who’s endorsing the company, wearing the product, you are like, oh, this is awesome.
Traci Brown: Yea, totally.
Kevin McCarthy: Yea, yea. Again, what I realized in hindsight is because of the super inflated ego that I had and having grown to a point where I sold my company, I was largely oblivious to what was going on. I was so wrapped up in the ego of being part of another up and coming multibillion-dollar IPO.
Traci Brown: Wow! Okay. Then what happened?
Kevin McCarthy: So, here I am working away. A long, long story, in fact, the story is entirely in my book, by the way.
Traci Brown: Blind Spots. Yes.
Kevin McCarthy: Blind Spots: Why Good People Make Bad Choices. It became a best seller in August of 2017.
Traci Brown: I love that cover. It’s really cool.
Kevin McCarthy: Yea, thanks. So, I won’t give you all the details just because it’s in the book and it’s too much, but he was supposed to take the company public. I became a consultant in September of 2000, and the company was supposed to go public shortly thereafter. And then there was the hanging chad election. I mean, there was just one story after another as to why the delay of the IPO, and so for 15 months that I worked with him there was just a delay, delay, delay, and there was always a great story behind it. And we bought into it, hook, line, and sinker, 34 employees, all but one pretty much stayed close to the end. Yea. There were a lot of red flags but the story was always so great, and there were always kernels of truth, so when we would investigate the red flags, we would find those kernels and be like: Oh, there it is, that is exactly what he said, so it has got to be true.
Traci Brown: Wow. Okay, okay.
Kevin McCarthy: Yea.
Traci Brown: So then, how did it come crashing down? Because eventually it did, right?
Kevin McCarthy: Yea, yea. Eventually it came crashing down. He was under investigation for a couple of years. We had no idea. The investors starting getting too restless, and then there was a cease and desist that came out from the state of Washington in April of 2001. The cease and desist basically said, stop selling stock, you are in violation. So the story to that was he had violated securities rules and was going to be slapped with huge fines, but don’t worry about it because at the federal level they are just waiting for the state to finalize the process so at the federal level they can go public. He had Jim Sargent on his legal team, who was the former head of the SEC, and all the big boys behind closed doors, one of those conspiracy theories . . .
Traci Brown: Right, right.
Kevin McCarthy: . . . were going to push through the paperwork. Well, that story was validated to some degree. There was a Jim Sargent. He was a former head, and he was an actual attorney on the payroll with us.
Traci Brown: Oh.
Kevin McCarthy: Yea. He had Christopher Warren’s legal team in California on payroll. It was fascinating what this guy did to create those kernels of truth. Many of us, most of us, stayed through the cease and desist. In fact, the prosecutor said if I had quit at that moment, I would not have been wrapped up into this whole web, but I stayed, true believers. Finally, in January of 2002, the FBI came knocking at my door, did a raid on all like, 12 employees of the 34, including the offices. They came in with search warrants looking for anything they could get their hands on related to the boss and the company. That is when I realized something was dreadfully wrong. There were some other red flags we can talk about, but that was like the icing on the cake. I still didn’t know that he was a criminal. I figured something was wrong, dreadfully wrong, but I had no idea that he was a criminal. I thought that maybe it was a conspiracy trying to shut down the business because that is what he wanted us to believe. But at that point, I hired an attorney and through a long and short process, ended realizing that yea, I was wrapped up in something way beyond me. I agreed to plead guilt to my part in the conspiracy. I pled guilty to conspiracy to commit securities fraud, wire fraud, money laundering, and mail fraud.
Traci Brown: Oh boy.
Kevin McCarthy: Yea.
Traci Brown: What a shock that day must have been.
Kevin McCarthy: Oh, it was the worst day of my life.
Traci Brown: Yea, yea. It seems like you had like a transformation process in prison. Is that an accurate statement? There was some soul searching I think that went on there. Do you want to get into that a little bit, or maybe there is another gap to this story you want to fill in there?
Kevin McCarthy: That is a good lead into prison. The transformation started when I was working with my public defender. The government seized everything that we had so they assigned a public defender to me. I was fortunate to get the number two in the Federal Public Defender’s office. She turned out to be a great attorney. But for a month, the first month we were meeting on a regular basis several times a week, I couldn’t stand her and every time I would leave her office I would be crying because she would be accusing me of being the kingpin or being a fraudster. She was badgering me horribly.
Traci Brown: Oh my goodness. Your own lawyer?
Kevin McCarthy: My own lawyer. I mean, even telling me that my friends were rolling over on me, confirming with them that I am the bad guy. I found out about a month into it, I realized this is part of the game that she had to play because she was testing my resolve. She had to find out what was truth.
Traci Brown: Oh, wow.
Kevin McCarthy: And what wasn’t.
Traci Brown: Okay. Okay.
Kevin McCarthy: We were in her office at one point, just never even sat down. She turned basically and she said, listen. She goes, you need to sign this plea bargain. They wanted me to sign a 10-year plea, agreeing to serve 10 years for a crime I did not believe I did. So, I wasn’t willing to do it. I was arguing with her the whole month, and that particular day I continued to argue. I was like, I am not signing it. We are going to trial.
Traci Brown: Uh-huh.
Kevin McCarthy: Because I didn’t know he was committing a crime. I had seen enough Law & Order to know.
Traci Brown: Because we’re all proud now that we watch Law & Order.
Kevin McCarthy: Right, yea, yea, yea.
Traci Brown: And CSI. That too.
Kevin McCarthy: You have to have intent to commit a fraud. That is my thinking, and I had no intent. But then she finally turned to me, and this is where the transformation and now we can lead toward the next step of this conversation you asked about, but the transformation started in this very moment, this ah-ha moment where she said, I finally get it. She goes, I understand why we are not seeing eye to eye here. You are seeing this through a moral perspective. I am seeing it through a legal perspective.
Traci Brown: Yea.
Kevin McCarthy: She goes, morally, I believe you. She goes, in fact, I know I could convince the jury that you had no idea that you were helping him with a fraud. She goes, but legally it does not matter. She said, because basically all it takes is one person in the conspiracy to know a crime is being committed. Anybody else can be swept up in the conspiracy under the very loose conspiracy laws. So, that for me was the ah-ha moment that changed forever the course of my thinking, and I began to realize why two people can witness the same event and not have the same perspective or the same understanding of what just happened. That began my quest for what was I thinking and why was I thinking it, and how could I avoid that in the future, you know, those blind spots.
Traci Brown: Wow. Okay. You’re sitting in jail, I suppose. I am just going to make it up. You tell me what really happened. You’re sitting in jail and you start studying, right. Is it internally, how can I improve, or is it, how do I see this so I don’t let this happen again? What is the thought process that had you jump so deeply into this body of knowledge?
Kevin McCarthy: Well, it started with this concept of how can I believe anything anymore?
Traci Brown: Oh, wow. Okay.
Kevin McCarthy: What is really wrong with my thinking so much that I could believe that this guy was a good guy doing good things, when in fact he was a con artist, stealing people’s money for seven years?
Traci Brown: Yea.
Kevin McCarthy: So, I questioned, I challenged everything. I was just like, I am not sure what I believe anymore. I don’t know if my Christianity is even real. I don’t know any of it.
Traci Brown: Wow.
Kevin McCarthy: So, it really began this really deep soul searching and then understanding, like I need to understand the process. I realized then that I had never learned about critical thinking. I couldn’t think back to any school that taught me it or read any books about it specifically. I have always been a book reader, but yea, I never really understood the thinking process, and I had to understand, what was I thinking so I can learn how to think better and not fall prey, not just a façade or a fraud, but really just make better decisions in general.
Traci Brown: Wow.
Kevin McCarthy: So, I started learning. I got my hands on any book I could get my hands on. I had a lot of books sent in over time and over the course of 33 months that I spent in the federal prison. That’s what I did. I spent a lot of alone time in the chapel library just where it was quiet, just reading and studying and literally sketching things out and trying to map out this process. What drives our behavior? It was all for me. It was just because I wanted to be in charge of better behavior.
Traci Brown: Right.
Kevin McCarthy: Better behavior. Better decisions.
Traci Brown: Wow.
Kevin McCarthy: Then it morphed over the 33 months. I began to see a dramatic change in the way I viewed the world. My worldview was shifting. I was beginning to challenge all my perceptions and my beliefs, so my mindset was improving and shifting, very much more positive. Then it became a passion. This is like eye opening so much that I’ve got to share this message with anybody and everybody who will every listen. Having been a speaker prior, back in the 1990s, I thought, well I am going to jump back into the speaking business because what better way to change the world is one audience at a time?
Traci Brown: Oh, yea. Oh, I love it. Okay. Do you want to get into the framework or do you want to talk . . . because I took your assessment this morning, which I thought was fantastic, and it nailed me, just like, boom, got it. Do you want to talk about the framework and then . . . how do you want to talk about the really cool findings and how you are delivering those out?
Kevin McCarthy: Yea. We can talk about all of that. There is more to the story. The story is fascinating. The book actually reads like a novel, although it is a fact-filled book and it is full of blind spot lessons. Anybody who is listening and wants to get the rest of the details, and there are a lot more details, and I want to say this right now, Traci, I am not innocent. I didn’t know my boss was committing a crime, but I totally owned the fact that I was participating in that conspiracy even though I was unaware. The smoking gun, if you will, there is always a smoking gun. The smoking gun details are in the book as well. There are no holds barred. Everything is out there.
Traci Brown: Oooh, I’m going to dig deep into that. I can’t wait.
Kevin McCarthy: I don’t know when this is going to publish, but today, my Kindle version is actually on Amazon at no charge.
Traci Brown: Oh, cool. Yea. Today’s April 20th, just so we know.
Kevin McCarthy: And anybody, after today, because I know this will publish at a later date, but after April 20th people can actually get a complimentary Kindle copy of my book if they just go to my website KevinMcCarthy.com/free book.
Traci Brown: Oh cool. Okay.
Kevin McCarthy: Yea, super easy. That said, leaving the story now behind, the assessment you took is the Blind Spot Assessment, also on my website. KevinMcCarthy.com/BSA for Blind Spot Assessment. That assessment is based on science, the human behavior science of DISC. It was intended to be short and sweet and at the same time very actionable. So, as you said, it pretty much nailed you for the most part.
Traci Brown: Yea.
Kevin McCarthy: It has about an 86% to 92% accuracy rate. What is happening now is I have got companies all over the world that are using that assessment, and I had no idea it was going to happen. I mean, I didn’t build it for this reason. It’s complimentary. It’s on my website. I find I get testimonials. I get feedback from people that leaders are using it, so we are now actually being deliberate with this and we’re teaching leaders how to take this and create blind spot conversations with their teams. I am working with a lady who is a manager of a big insurance company. The feedback she got immediately from having this discussion with her team was we want more, and the vulnerability that comes out of that. This is the impact that is now happening as a result of I guess me going to prison.
Traci Brown: Oh man.
Kevin McCarthy: I don’t want to sound like a martyr. I didn’t take the bullet for everybody intentionally.
Traci Brown: Silver linings, right.
Kevin McCarthy: Yea. It’s like I’ve got to share this. We can change the world if we can change the way we think.
Traci Brown: Oh, exactly. I came out as a competitor, but you have, what? Six or eight different?
Kevin McCarthy: There are eight different styles. Yea.
Traci Brown: Oh, what are the styles?
Kevin McCarthy: There are four primary styles. Competitor, motivator, peacemaker, and analyzer. Then there are four blended styles, and that is a combination of two different styles, as the word would say. Typically, this assessment will lead people into one of those eight styles. It is going to be fairly accurate. Not everybody agrees with every bullet point, but largely.
Traci Brown: It was good. I thought it was good.
Kevin McCarthy: Then it opens up the conversation because it is a third-party tool that helps conversations become more vulnerability because we can say, so tell me about those blind spots and you are referring to the report. You are not asking somebody to be sharing something transparent that has never been revealed. Let’s just talk about the report.
Traci Brown: Yea, or that you’re going to get in trouble for with your boss or feel like you’re being, I don’t know, picked on or people know too much about you or something. It seemed really . . . it was kind of perfect because it was just like, you know here is how you kind of operate and if you have got flaws, here is a list of where you maybe can improve, right. Mine was, it was a competitor. It was just what you would think. It’s like, you like to win and sometimes it goes off the rails because you like to win too much, which is the big summary. Right.
Kevin McCarthy: Yea.
Traci Brown: So my job is to pay attention more to people around me and make sure I’m getting differing opinions and seeing the big picture, instead of just one goal, which is win.
Kevin McCarthy: Yea.
Traci Brown: What are some of the other ones? Can you describe them a little bit?
Kevin McCarthy: You just tapped into the word win. That’s what is called the driving need for the competitor.
Traci Brown: Oh, I love to win. Yea.
Kevin McCarthy: Yea. Me too. I’m an energizer so I’m the blend between the competitor and the motivator. Where the motivator is the charismatic, sort of life of the party, let’s have fun, oh, squirrel, wow! Just constantly distracted. Winning is okay, but relationships are more important, and they want lots of relationships. It doesn’t matter how deep they are. They want a lot of people around them because they are motivators. They love to be the center of attention. Right. So I am that energizer right between, but I lean towards the competitor side, which is I also have that drive to want to win.
Traci Brown: Yea.
Kevin McCarthy: Our driving needs, according to Dr. Mark Scullard, who is a psychologist in human behavior, he says that we, somewhere between the ages of around three to seven years old, we look at the world in the way the world impacts us, and we do this subconsciously, and then we develop this driving need. For us competitors, we may have looked at the world and went, oh my gosh, this place is a scary place. I mean, it’s a tough place out here, and if I’m going to survive in this world, I am going to have to own it and just make my way. We develop this drive to just be on top, to win, to control our own destiny. That’s a driving need. So the driving need for a motivator is expression. If I’m going to survive, I’ve got to tell stories. I’ve got to interact. I’ve got to have a lot of social interaction with people. That is part of how their personality and behavioral style develops. The driving needs are really important to learn and to understand. Now, for a competitor the polar opposites are super important to understand too. If you are on a team and you are a competitor, and you are working with a peacemaker, then you are naturally, if left unaware, and that’s a real key here, if left unaware, which is where I was up until prison, if left unaware, you and the peacemaker are what I like to warmly refer to as arch enemies.
Traci Brown: It’s not peaceful.
Kevin McCarthy: Yea. Just naturally you will clash because the peacemaker, their driving need as a peacemaker is harmony, in fact, to the point where one of their blind spots as a peacemaker is they want harmony so much that they’ll throw themselves under the bus. They’ll take the blame just to keep the peace because they don’t like conflict. They want the team to be in harmony. They want all the relationships around them to be in harmony. Even if it’s not their fault, they’ll just accept it so that there is no conflict.
Traci Brown: Oh boy.
Kevin McCarthy: That’s the blind spot they have to work on as a peacemaker. But a competitor who is not aware about the person they are dealing with who happens to be a peacemaker, you and I, if left to ourselves, unaware, will start barking orders or just be real short and concise, and we will give them bullet points and punch lines. Here is what I need you to do, do it now, get it done.
Traci Brown: Yea, that’s how I am. Yea.
Kevin McCarthy: And we move on. We think we’re being efficient.
Traci Brown: Exactly.
Kevin McCarthy: The whole time the peacemaker is going, whoa, whoa, slow down. I need more details. I want some relationship here. You’re all task oriented. I’m people oriented.
Traci Brown: I can feel this coming up in me right now. Oh my god, these people.
Kevin McCarthy: This is way most leaders are because most people are unaware. They are not as aware as we think we are. Tasha Eurich studies self-awareness as an occupational psychologist, and she wrote a book called Insight, which I highly recommend. A summary of that would be 90% to 95% of us think we’re aware, but she’ll say only 10% to 15% of us actually are.
Traci Brown: Oh yea, if that. Yea.
Kevin McCarthy: Right. So we need to become more self-aware and more others aware, which is also the foundation of emotional intelligence. That is part of the core dimensions of emotional intelligence. There is so much. Blind spots, that’s my thing, right. Blind Spots covers all these different dimensions. It covers emotional intelligence, diversity, inclusion, ethics, decision making, personality and behavioral styles. It covers a lot of these different areas because all of these different facets of human behavior create blind spots, and we don’t know it.
Traci Brown: Right.
Kevin McCarthy: Because we don’t know what we don’t know.
Traci Brown: Let’s talk about this. A lot of fraud happens right under our noses. I think we do a lot of justification to that. Whenever I talk to a fraud, let’s say, a victim, they can always look back and see the signs, right. What are your tips for in the moment, like starting to realize, like wait a minute, something’s not going right here and seeing it objectively instead of rationalizing things away? What’s your tip on that? You can even run that through your filters of your assessment if you want.
Kevin McCarthy: Yea. There are so many things that really need to be in play if you want to be protected against becoming a victim of fraud or being susceptible to becoming as I did, an unwitting accomplice, to a fraud, like your boss. I would venture to say, I don’t have the data to back this up, so just bear in mind, a gut feel here, but just from all the studies, I would venture to say there is a lot more acquiescing of employees to employers where the employers are doing things wrong, whether they are unethical or whether they cross the line to illegal. That is a gray area to discuss in a whole different setting. But how often are you seeing or feeling that there is something wrong, but you are going along with it because you’re rationalizing, you’re justifying, or you’re in fear. Most Americans live paycheck to paycheck.
Traci Brown: It’s true. Yea.
Kevin McCarthy: Yea. I don’t like what my boss is doing, but I can’t afford to lose my paycheck right now. I can’t afford to speak up. I’ve talked to people in my audiences. I do a lot of work with internal auditors and fraud examiners.
Traci Brown: Yea, yea. Me too. Yea, yea.
Kevin McCarthy: A lot of financial people. I’ve had stories where it’s like, yea. This one lady comes to mind where she saw her boss. She turned in her internal audit. The boss and the board challenged her and wanted her to make some adjustments to it because her audit was truthful, and they didn’t want it all in black and white. They wanted it to be gray intentionally.
Traci Brown: Yea, yea.
Kevin McCarthy: She was like, I’m not doing that. I’m speaking the truth, and this report stands. So, she ended up losing her job.
Traci Brown: Oh, wow.
Kevin McCarthy: Yea. But she spoke the truth and she is so at peace with it and so happy about it. Life moved on and worked out for her, but that fear of losing your paycheck. I say all that to say, one of the ways you can challenge yourself is slow down and question what you’re feeling, and most of us don’t do that.
Traci Brown: Oh yea. No, we don’t do that.
Kevin McCarthy: No. Our emotions drive our behaviors and yet we don’t challenge our emotions before we behave.
Traci Brown: Right.
Kevin McCarthy: Right. Here is a really classic and simple and somewhat silly example that I think everybody will get it. When is the last time you got up from your coach at home or your desk in your home office or wherever and you walked over to the refrigerator and you opened the door and just stood there and though, hmm, I’m hungry. What can I eat? As you are gazing at each of the shelves, and you are looking around for something to eat, maybe you found something, maybe you didn’t, but my challenge to you is, are you really hungry?
Traci Brown: You’re bad, because I am thinking about what snack I’m going to have right now.
Kevin McCarthy: Uh-huh.
Traci Brown: It’s true. On that note, which is semi unrelated, I’ve had clients go to where they have the meetings. It’s not AA, but it’s like Snackers Anonymous or something along those lines.
Kevin McCarthy: Oh sure. Overeaters type place.
Traci Brown: Overeaters Anonymous. She said, you know what? They never ask us in there if we’re hungry or not. They never asked, are you hungry? Or we haven’t asked ourselves that. Yea. Very insightful. But anyway, go on.
Kevin McCarthy: Yea, no. As simple as that sounds, we don’t challenge our emotions, and frankly, most of us don’t even know the full gamut of our emotions. There are four primary emotions, or six or eight, depending on the psychology you look into.
Traci Brown: Yea, whichever one you like. Yea.
Kevin McCarthy: But there are so many more emotions and there are different degrees of emotions, and so, we don’t even know how to classify what we are feeling often. Anyway, so my point is when you feel something, our gut instinct, some call it intuition, whatever you want to call it, that intuition sometimes can save your life. Not always, because our intuition, we can’t just say, I go with my gut, and call that good, because that is a mantra that we stick to and it allows us to have cognitive laziness. That mantra just allows us to shut off our brains, and our gut is not always right.
Traci Brown: That’s true too.
Kevin McCarthy: Yea. I’m going to push back because some people listening, they are probably going, mine is, I always go with my gut, and I live a great life like that. It’s like, okay, that’s great. But if you really rationally think through every single gut check, they are not always right, simply. Alright. We can get into the whole psychology of thin slicing, all kinds of fun stuff.
Traci Brown: Oh yea.
Kevin McCarthy: But the point is this. The point is check your gut, check your emotions. What are you really feeling? There is a mantra. I’m not huge into clichés and all that, but the one that everybody knows, if it sounds too good to be true, it’s what?
Traci Brown: Probably is.
Kevin McCarthy: Probably not true. Right.
Traci Brown: Yea.
Kevin McCarthy: If you are in a situation that seems like it could be too good to be true, you might want to take that a step further and start investigating, and you can’t always do it yourself. I thought I could handle all the red flags and I ended up justifying and rationalizing away these red flags. In hindsight now, I have got a half a dozen people that are very close to me, my closest sphere of influence who I can run things by, no matter how ludicrous, crazy, or whatever, and get some honest perspective.
Traci Brown: Oh, that’s good.
Kevin McCarthy: And they have permission, this is another tool, give those close people to you permission to smack you figuratively upside the face, upside the head.
Traci Brown: I have people that do that.
Kevin McCarthy: People that say, listen Kevin, I don’t care what you’re thinking right now. We’re telling you it’s not right. There is something amiss. Here’s a classic example. I am also a certified international referee for the World Billiard’s Championship.
Traci Brown: Really? Okay, okay. Wait a minute. I have a question. Do you know the Black Widow?
Kevin McCarthy: I actually have met the Black Widow. She’s not healthy, Jeanette Lee, sadly.
Traci Brown: Oh no.
Kevin McCarthy: Yea. Put some good thoughts out there in the universe or pray for her.
Traci Brown: I will.
Kevin McCarthy: Yea, she is battling some health issues. She lives in Florida. Yea, I know Jeanette Lee. I’ve got a picture with her.
Traci Brown: I rode an elevator with her once.
Kevin McCarthy: Is that right? She’s the Black Widow but she is a sweetheart of a lady.
Traci Brown: Is she? Yea, okay. Okay.
Kevin McCarthy: I also play amateur pool here in the Phoenix area, and I was playing a league play last week. There was a potential for a foul when my opponent was shooting. I won’t go into too many details here. But the perspective, here is the example, because there was a potential before he shot, we agreed, let’s go call a referee to come watch the shot and make the judgment call. In the rules of pool, the referee’s word stands. It doesn’t matter what you think. Not every referee is perfect, but for the most part, whatever the ref says. So, three people watched the shot, the referee, a nearby high-level skilled player, and myself, and we all said the same thing: That was a foul, a bad hit. The player said it wasn’t a bad hit. I’m telling you right now, I have the best perspective standing over the ball. I saw the shot and it’s not a bad hit. I’m like, wait a minute. This is the same thing that goes for, back to the story of have people around you that will tell you the truth because that person started rationalizing and justifying why it was not a bad hit. Three other eyewitnesses all saw it from three different angles, a bad hit. Sometimes I have to tell my friends, listen, I could get in my own head again and start rationalizing something. I need you to confirm and to force me, be strong with me, and let me know that Kevin, you have run this by three or four or five of us, and we are all telling you it is not a good decision. You need to listen. I need to then own the blind spots. I need to own the idea that I’ve got blind spots and be humble enough to go, you know what, okay, you’re right, I am probably just justifying again.
Traci Brown: Wow. And you know what, it takes some bravery to do that, because we all want to hear what we want to hear.
Kevin McCarthy: Right.
Traci Brown: Because I have friends that will tell me the truth as well, and I don’t always . . . like that’s our deal, but I don’t always like it.
Kevin McCarthy: Yea.
Traci Brown: Wow. I have just got to know. What would a foul on a pool shot be? Do they hop the ball or have it go around?
Kevin McCarthy: Alright, for all of you pool players, and I know there are lots of you.
Traci Brown: I’m a competitor! I’m a competitor! Kevin, I have to know!
Kevin McCarthy: I don’t know pool balls right here in front of me. I’ve got some in my pool table around the corner. But, when you have the white ball and another ball this close together, where they literally maybe an inch apart, half an inch apart, and you’re getting ready to hit the white ball into the other ball, when they are that close apart, you hit the stick into the white ball, the white ball is going to hit that ball and it’s going to bounce back. It has to, and it is going to bounce back into the stick. When you hit that stick twice on the white ball it’s a foul. Now, if you are playing in a pool hall, nobody really thinks like that. This is professional or amateur league type regulations.
Traci Brown: Sure.
Kevin McCarthy: That’s just one, one of many.
Traci Brown: Oh wow. Okay. I learned something. Who knew?
Kevin McCarthy: Well, there you go.
Traci Brown: Yea.
Kevin McCarthy: One of these days I’m going to actually do a whole video course on leadership principles around a pool table.
Traci Brown: Oh, fun.
Kevin McCarthy: There are so many facets of pool that actually apply to leading teams and running business.
Traci Brown: Oh yea. That’s with a lot of sports. You know, I used to be a professional bike racer, so I could probably do the same thing, but I’m going to talk about fraud and lie detection instead.
Kevin McCarthy: There you go.
Traci Brown: Alright, I know we’ve got to get you back to your day. If you could leave people with one tip, besides the ones that you’ve given, which were blown away, fantastic, what have you got?
Kevin McCarthy: The most important letters in the alphabet, six letters, write them down, put them on the screen.
Traci Brown: I’m ready.
Kevin McCarthy: STPCAP. STPCAP.
Traci Brown: Okay.
Kevin McCarthy: Okay. Stop cap is a way to say that, just adding an extra O in there. STP is stop and put on your thinking cap. It’s a good way to remember those letters. STP for stop or STP is when we are in a situation where we perceive whatever stimulus comes through our sense and it creates any kind of an emotion or requires any kind of reaction. Like you can be walking down the hallway when we all get back to work in buildings, you catch somebody’s eye and the look on their face just gives you this sort of visceral reaction, like what the heck was that look for? Any time you sense any kind of reaction, put in STP caps. Stop and put on your thinking cap. STP means to stop temporarily, think deeply, so we have to get out of this automatic thinking. It’s called system 1, according to Daniel Kahneman. System 1 is our automatic processing, where we just react automatically. Like driving, we don’t think about left hand over right hand, we just turn.
Traci Brown: Right.
Kevin McCarthy: That’s the automation. We have to kick ourselves out of that into system 2 which is our rational thinking process. So, before the visceral reaction takes root, stop temporarily, think deeply, and then proceed deliberately. Now, you can proceed rationally instead of irrationally. You can act, instead of react. When you’re thinking deeply, now you’re going to employ CAP. CAP is simply context, assumptions, perspective. What context am I missing here? What assumptions am I making? And what perspectives are available. It is a critical thinking model. It’s a way to kick into the rational thinking, bring in other perspectives, understand the context of what’s truly going on, and challenge our own assumptions about what assumptions we’re making.
Traci Brown: Oh wow. Oh, I love that. Check in with yourself. That’s what it is. It’s check in with yourself. We’re not taught to do that, but man, when you do, you get some pretty interesting realities. Not all are easy to swallow, however, they’re all valuable.
Kevin McCarthy: We teach this to team leaders, anybody leading organizational teams. Anytime you’re having a meeting, and there is any kind of discussion and decisions that have to be made, you use the same thing. Okay, let’s stop and think about this. Let’s think deeply. Ask the team, what context are we missing? What assumptions are we all making? What other perspectives are available to us?
Traci Brown: That’s awesome. That’s cool as a group too, I think really, really valuable.
Kevin McCarthy: Totally.
Traci Brown: Okay. How can people get a hold of you? Because people are going to want to get a hold of you. We know that your book is going to be, well today, is on Kindle, right, for free, but obviously a hard copy is going to be better, or paperback. But then it’s going to be on your website as well. Because people are going to want you to come in and speak and realign their teams and their results. So, how do they get a hold of you?
Kevin McCarthy: BlindSpots.com is my primary corporate website. There are all kinds of assessments there, not just the complimentary Blind Spot Assessment, lots of information, but go to BlindSpots.com. If you want to look for me as a speaker, then click on the speaking link. I’ve got a nine-minute video there that will give you more insight into my story that we haven’t really touched on too much today. Then, what else would I say? During COVID, as a pivot, because as a keynoter, my stage time has been diminished, I have done a lot more virtual stuff obviously. I have actually been doing virtual presentations since 2010, but I also partnered up with another Blind Spot person in Canada and now we have created Blind Spots Global together, and we’re doing a lot of teamwork programs. We have got a full year of programming that we can bring to teams virtually and it helps create a more cohesive team and a greater trust culture through this Blind Spot venture that we are setting forth on. It’s really pretty awesome. I say that because when you go to BlindSpots.com, and you find the Blind Spot Assessment, which is again BlindSpots.com/BSA, if you do that, and you take the assessment, you’ll be invited to our Thursday morning Blind Spots Thursday. We call it BS Thursdays. BS stands for Blind Spots. You can have it stand for whatever you want.
Traci Brown: Whatever you want today. Yea.
Kevin McCarthy: But BS Thursdays. We have teams of companies coming to this, just off and on. It’s free. It’s every Thursday morning at 8:00 PST. It’s via Zoom. You can take the assessment and you can get signed up and jump in anytime. But then you’ll get to ask questions. We have all kinds of various teamwork and culture and lots of different topics that come up, and it’s an open discussion.
Traci Brown: Oh, that would be super valuable. I love that.
Kevin McCarthy: Yea. A lot of ways to get value out of BlindSpots.com and become part of the tribe and part of the community and ways to reach us and have you bring us in.
Traci Brown: Yea, yea, for sure. They need to bring you, for sure.
Kevin McCarthy: Yea.
Traci Brown: Alright. I’ll tell you what, thank you so much for coming on Fraud Busting!
Kevin McCarthy: Well, hey, it’s been a pleasure. I love what you’re doing. Keep it up because yea, everybody needs help staying away from the fraudsters and not getting wrapped up in it accidently or becoming a victim of it.