Don’t become a victim of the ‘Streisand Effect’   

The Streisand effect is the phenomenon whereby an attempt to hide, remove, or censor a piece of information has the unintended consequence of publicizing the information more widely, usually facilitated by the Internet. 

It is named after American entertainer Barbra Streisand, whose 2003 attempt to suppress photographs of her residence in Malibu, California, inadvertently drew further public attention to it.  

Streisand unsuccessfully sued photographer Kenneth Adelman and Pictopia.com for violation of privacy.  The US$50 million lawsuit attempted  to remove an aerial photograph of Streisand's mansion from the publicly available collection of 12,000 California coastline photographs.  Adelman photographed the beachfront property to document coastal erosion as part of the California Coastal Records Project, which was intended to influence government policymakers.  

Before Streisand filed her lawsuit, "Image 3850" had been downloaded from Adelman's website only six times; two of those downloads were by Streisand's attorneys.  As a result of the case, public knowledge of the picture increased substantially; more than 420,000 people visited the site over the following month.  

This is exactly what happened when a Dallas (USA) real estate firm (DFW Advisors Ltd. Co.)  sued its ex-bookkeeper, Jacqueline Ervin, for embezzling approximately $400,000 over a four-year period by writing checks to phony vendors and all the usual tricks. She generally denied the allegations, and apparently the parties didn’t do much discovery, so they went to trial without knowing what the other side would say. 

The CEO, Jim Falvo, got up on the stand and, as one would expect,  patiently went over the books, explaining to the judge all the dishonest things that Jacqueline had supposedly done. It didn’t look good for Jacqueline. 

After Jim was finished, Jacqueline was called to the stand. 

Jacqueline testified, “Sure, I was writing checks to phony vendors and paying myself. You know why? Because Jim made me give him ‘sexual favours’ and told me he’d pay for it by letting me write checks to phony vendors and pay myself. Every phony payment I made was with Jim’s knowledge and permission, and he’s the CEO, so I didn’t embezzle a nickel.” 

The judge believed Jacqueline, finding in her favour on all issues. 

Before, only Jacqueline and Jim knew of the affair. After the case, the whole world knew, including you and me, and no doubt we are having a little chuckle at Jim’s expense. 

OK. Bad idea for Jim to have sued Jacqueline in the first place, if that’s what was really going on. Bad day in court for Jim and his attorney. And a terrible, horrible, no-good, really bad day for Jim’s wife. But then, sh*t happens.  

So what did Jim do?  He asked the judge to put his findings in writing!  

The judge put in writing his ruling that Jim had a four-year sexual relationship with Jacqueline, and that Jim told Jacqueline to pay herself through company funds so that Jim’s wife wouldn’t find out. 

But if you think that it could not get any worse, just wait for the taxation authority to get wind of the false invoicing and charge the real estate company back taxes. Even in America I doubt that sexual favours would be considered a valid tax deduction. 

If he booked it as stress relief, would it pass a tax audit?  

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