Would you play Russian Roulette if it involved a really big revolver, say one with a hundred cylinders, and only one of them was loaded?  Not me, but again, I'm only an accountant.

My friend Tom just called, and it seems like he has (metaphorically) decided to spin the cylinder, place the gun to his head and squeeze the trigger.  For years he has been buying houses from the city that have been boarded up or are being lived in by dope dealers, squatters, etc.  He re-habs those houses, then rents or sells them.  But now he is being investigated criminally.  If you believe what you read in the newspaper, he buys houses for $15,000 and talks people into buying them for $100,000, profiteering off low-income minorities.  The newspaper ignores the cost and value of the rehab in the middle, which makes for a much more interesting (one-sided) read.  Ouch.

Tom groans that the $300k it would take to make this all go away (a small part of his net worth) would "hurt him".  But he feels he is right, so will insist on fighting, not realizing that "right" is something that a judge will decide.  Plus, his ornery personality will not serve him well in court.  I shudder at what will happen when a judge dares to lecture and point a paternal finger at him.

The odds of winning are in Tom's favor, but he's almost sixty, and if he loses, his life really changes.  We are going round and round on this one.  Part of our last conversation was:

"Tom!  Assume you have to go through this trial a hundred times and that in ninety of them the judge says just what he should, namely, "Wow, you were right; the court apologizes for inconveniencing you".  But in ten of them the judge isn't paying attention, or is a buddy of the prosecuting attorney and he spanks you with six months of free room and board, courtesy of the State.  How much would you (one of the winning Toms) pay to keep you (one of the losing Toms) out of jail?  Isn't $300k reasonable?"  (note: so far it hasn't worked -- any ideas?)

There are many things that he could have done to structure his transactions and set up his business systems and procedures that most likely would have kept  this issue from ever coming up.  But perhaps his biggest mistake was not realizing the potential political/legal fallout of doing so much buying and selling in poor neighborhoods.  One person I know (in the same business) has greatly reduced his risk by serving on various community committees and helping pro-business candidates get elected.  He is known locally as a benefactor who restores entire neighborhoods rather than as a slumlord profiteer.

The principle in warfare is that you don't take a superior enemy head-on.  Tom can't see that the state is a superior enemy (more guns).  This is only at the beginning stages, so there is still time to get through to him.  Click.  Click.  Click....... (all clicks so far, but "Bang" is a bummer).