Former stockbroker shares missteps that landed him in prison

Kuhse, now 53, told a group of about 100 at an April 25 Leadership Springfield luncheon that his unethical detour can be traced back to eight critical-thinking errors that led him to abandon the moral values of his rural Iowa upbringing. They are entitlement, super-optimism, affection disconnection, seemingly unimportant decisions, situational ethics, rationalization, laziness and “victimitis.”

Kuhse’s life changed significantly after high school, when he made a beeline for the sunny Southwest. He enrolled at Arizona State University and joined a fraternity.

“That fraternity … changed everything in my life; I changed my major from finance to socialization,” Kuhse said during his presentation at University Plaza. “I set out to have a good time, and boy, did I succeed.”

At 18, Kuhse said he experienced a “dramatic values shift” and became fixated on money, power and possessions – things that seemed to propel his growing sense of entitlement, which he has labeled the “queen mother” of critical-thinking errors.

The dean personally booted Kuhse for poor academic performance after three years at Arizona State, so he moved to San Diego. After working some retail jobs, Kuhse decided to pursue a career as a financial planner and began applying at Wall Street firms.

Kuhse’s break came in 1980 when one firm invited him to interview and spend a day on the floor of the New York Stock Exchange, an experience he found exhilarating.

“All these people do is talk about making money – 24-7, money, money, money,” he said. “This is my crowd. This is the group that I want to be a part of,” he thought at the time.

Rise and fall

Kuhse worked with two securities firms in the early 1980s and earned his certified financial planner designation in 1986. The next year, he became co-owner and principal at San Diego-based Planners Independent Management, which was one of 10 firms used by the Oklahoma State Treasurer’s Office to invest the state’s money.

Not long after he began working with Oklahoma in 1990, Kuhse and one of his colleagues at Planners began skimming money off the top of trades and funneling a portion of the proceeds to friend Patricia Whitehead, the deputy state treasurer working directly with the brokerage houses.

As Kuhse’s checking account balance swelled to $1 million, his wife and mother both questioned the legality of his actions. But he kept rationalizing his actions – until Whitehead fired an employee who, in turn, reported her long-held suspicions to the FBI. That happened almost two years after the scam began, Kuhse said, noting that fraud, on average, is detected within 23 months.

Federal authorities investigated Kuhse and his co-conspirators for a grueling 20 months as rumors of an indictment mounted. After visiting with his attorney in Oklahoma City in November 1993, Kuhse returned home to a phone message from TV newsman Ted Koppel, who said “Nightline” was running a story about the investigation.

Two nights later, after Kuhse sent his wife to bed, he watched the story as it aired on national TV. When she later confronted him about the report, Kuhse owned up to the allegations and told her that he had to leave the country.

Kuhse, his wife and their two young sons drove across the Mexican border and took a midnight flight from Mexico City to Costa Rica.

Seven months later, the FBI discovered Kuhse had fled and indicted him on 32 counts of conspiracy, bribery, fraud and money laundering.

Kuhse’s wife eventually moved back to San Diego with his sons, but Kuhse – hoping he would never have to face the consequences of his actions – remained in Central America. He was so determined to escape that he slipped out the back door of his home when four Interpol agents came to arrest him.

After four years as a fugitive, an exhausted Kuhse turned himself in to the U.S. Embassy in Costa Rica, where he was held in an overcrowded local jail with dirt floors. Despite being surrounded by hardened criminals, Kuhse was at peace.

“It was like I was in the eye of the hurricane,” he said.

Combating unethical business

Kuhse later pleaded guilty to 17 counts and was sentenced to six years in prison and $4 million in restitution. He also was forever barred from financial planning, placed on probation and ordered to perform 200 hours of community service, which he parlayed into a professional speaking career.

After being released from prison in 2001, Kuhse went to live with parents in Arizona, where he drove a truck for $8 an hour. He later founded his own company, Speaking of Ethics.

Much of his income goes toward restitution, which still stands at about $3.2 million.

“I plan on paying it off before I die,” he said.

Kuhse said an unethical undercurrent in the business world and on college campuses must be countered by reinforcing the difference between right and wrong. When he polls college students, about 80 percent think business is corrupt and the same percentage think they will be asked to violate their personal code of ethics within two years of employment. About two-thirds indicate they will oblige, Kuhse added.

“This is the talent pool we are drawing on in the professions we represent,” he said. “That’s not good.”

Businesspeople who attended Kuhse’s presentation said they were impressed by his engaging speaking style and thought-provoking talking points.

“I think he’s working on that very fundamental mindset that we have, the defense mechanism we have, which is … that doesn’t apply to me,” said Crista Hogan, executive director of the Springfield Metropolitan Bar Association. “He’s trying very hard to show how it does.”

Anne Brown, the director of budget management at CoxHealth, said Kuhse’s message is one that shouldn’t be ignored.

“I think we need to realize that those kinds of things can happen,” Brown said. “It’s just a fact of life. People get greedy. … You can’t bury your head in the sand.”[[In-content Ad]]