First Person: Barnett Helzberg Jr., BBA ’56
BY BARNETT HELZBERG JR., BBA '56
During 39 enjoyable years at Helzberg Diamonds, the company enjoyed many successes. We expanded from 15 stores in 1962 to 142 stores in 23 states by 1995, making it the third largest jewelry retailer in the country. In 1967, I conceived the “I Am Loved®” campaign, inspired by my great love and future engagement to Shirley Bush. These three little words from the heart became a worldwide movement, appearing on 50 million buttons and counting. The company still enjoys using it.
After selling Helzberg Diamonds in 1995 to Berkshire Hathaway (Warren Buffett), I sought to take the lessons from my business career as well as my mentoring relationship to empower future generations of entrepreneurs and help existing organizations work smarter.
It started at a conference in Pebble Beach, Calif., where I had the privilege of meeting Ewing Kauffman, founder of Marion Laboratories and then-owner of the Kansas City Royals. After sharing a drink, he invited me to come by his office back in our home state of Missouri one day, and from there a 23-year mentoring relationship was born.
“You’ll help someone someday,” he once said when I thanked him for his support. His kindness and those words inspired the founding of the Helzberg Entrepreneurial Mentoring Program (HEMP) in 1995, an initiative that matches experienced business leaders with rising entrepreneurs.
HEMP members receiveone-on-one mentoring relationships, monthly networking opportunities to discuss business issues with fellow mentees and seasoned entrepreneurs, educational sessions, and an annual retreat (this year’s keynote speaker is Steve Wozniak, co-founder of Apple). Now in our 20th year, it’s a joy to know that HEMP has benefited so many wonderful Kansas City entrepreneurs.
In addition to HEMP, in 2011 I founded PhonyVendorCheck.com. When signing checks at Helzberg Diamonds, I encountered an invoice for “White Pages” that had been authorized for payment by a manager but looked questionable to me. When I asked the manager about it, he said, “I thought it was for the telephone book.”
Years later, our research found that publishing giant Condé Nast had paid a $7.9 million phony printing bill, and Best Buy had paid a $900,000 phony merchandise bill. The U.S. Postal Service reports that millions, and potentially billions, are paid to fraudulent invoice schemes rendered for fictitious services like Yellow Pages listings and trademark registrations.
Phony Invoices is designed to protect businesses from falling victim to these scams, and to put the scammers out of business. We back-test against a database of known schemes to determine if the company has made prior payments to scammers, and then we run a series of tests that replicate scam tactics, address breakdowns in client systems, install controls, and enter the client into a system that helps them avoid new threats.
Our database includes 70,000 fraudsters. Currently we’re offering free scans to government and medical organizations. I am proud to share my past experience to help protect our clients from these criminals who seek to steal their profits.
The slogan I wrote back in the '60s was “I Am Loved®,” but reflecting on my career and seeing where I am now, I can also say I am blessed. Not only did I reach great heights in my traditional career in business, but now in this second act of my career I am fulfilled by sharing knowledge and experience to inspire and guide others.
Barnett Helzberg Jr. is the author of Entrepreneurs + Mentors = Success: 22 Convincing Stories (Rockhill Books), which offers a look at the mentees and mentors of HEMP, and What I Learned Before I Sold to Warren Buffett: An Entrepreneur's Guide to Developing a Highly Successful Company (Wiley).
Five Tips to Spot Phony Invoices
According to the U.S. Postal Service, every year businesses pay out millions, and potentially billions, to phony invoice schemes. Some of these scams continue for months, or even years, before victims discover the problem. While this issue most often affects small and medium-sized businesses with less robust accounting methods and practices, it has also cost major organizations a lot of money. For example, mass media giant Condé Nast paid $7.9 million to a bogus printer, and Best Buy fell victim to a fraudulent $900,000 merchandise bill. As chairman of Helzberg Diamonds, Barnett Helzberg Jr. got wise to these practices, and after retiring from the major jewelry retailer he founded PhonyVendorCheck.com to help businesses protect themselves and their profits.
Here, he shares some basic guidelines to help you avoid losing money to phony invoice peddlers:
Don’t pay the bill! Phony invoices often include the advisory “This is not an invoice” in small type at the bottom of the page. Regardless, many of these are paid every year. One company that billed fake “Yellow Pages” invoices received more than $400 million in revenue and was unable to be stopped because of this statement.
Look out for minor invoice changes. Changes in business name (especially a different spelling), address, or phone number may reveal charges you should not pay. Condé Nast paid nearly $8 million in false charges to a scammer who billed them under the guise of a vendor similar in name to the publishing house’s printer.
Before you pay a renewal, confirm it. Phony invoices posing as service renewals can lead you to believe that it’s a legitimate, previously paid charge.
Learn where to spot fraudsters. The most common invoice scams include Yellow Pages, online directory listings, patent and trademark services, labor law posters, magazine subscription renewals, ink and toner supplies, and other office supply vendors.
- Be mindful of unknown vendors. Carefully check invoices where purchase orders are not available, such as freight bills and utility bills. Foreign addresses are a common red flag of phony billings.