O.P.M. Leasing Services
| Company type | Private |
|---|---|
| Industry | Computer leasing |
| Founded | 1970 in Brooklyn, New York, United States |
| Founder | Mordecai Weissman, Myron Goodman |
| Defunct | 1981 |
| Headquarters | Manhattan, New York City , United States |
Area served | United States |
| Products | Computer leasing services |
O.P.M. Leasing Services, Inc. was a computer leasing company that became embroiled in a significant corporate fraud case, ultimately declaring bankruptcy in 1981 amid allegations exceeding $200 million.
Established in 1970 in Brooklyn by Mordecai Weissman and Myron Goodman, O.P.M. (an acronym for Other People's Money) later relocated its main office to Manhattan. It grew to rank among the top five computer leasing firms nationwide.
The company financed its acquisition of computers—leased to business clients—by borrowing money secured against the computers and their lease agreements. The repayments from these leases were used to service the loans. Its lenders comprised banks, savings institutions, insurance firms, and pension funds. Notable customers included Merrill Lynch, Xerox, American Express, and General Motors, with Rockwell International representing its largest client. O.P.M.’s swift expansion was largely attributed to providing lease conditions more favorable than those of its competitors.
Fraudulent activities commenced in 1972, involving counterfeit and modified lease documents, reusing the same leases as collateral for multiple loans, fabricating leases for non-existent equipment, and exaggerating the amounts of lease payments.
The downfall unfolded in February 1981 after detection of a forged signature on a lease involving Rockwell International. The company filed for bankruptcy protection the following month. Goodman was sentenced to 12 years imprisonment and Weissman to 10 years; an additional five employees also received prison terms. In 1978, Goodman and Weissman had gained control over the First National Bank of Jefferson Parish in Louisiana, which they exploited for check kiting schemes benefiting O.P.M. The firm pleaded guilty to this misconduct in March 1980 and was penalized with a $110,000 fine.
A report by the bankruptcy trustee condemned O.P.M.’s auditor (Fox & Company), investment bank (Lehman Brothers Kuhn Loeb), legal counsel (Singer Hutner Levine & Seeman), and Rockwell International for serious negligence. Some involved parties had knowledge of the fraudulent activities but failed to disclose or actively facilitated them.
Further reading
- Fenichell, Stephen Other People's Money: The Rise and Fall of OPM Leasing Services. Anchor Books. 1985
- Gandossy, Robert P. Bad Business: The OPM Scandal and the Seduction of the Establishment. Basic Books. 1985