 You're watching FJTN, the Federal Judicial Television Network, coming up on Court to Court. I think that everyone in my class thought it was one of the best things they've ever seen and it really hit home. No one else is doing this and if you don't reach that one kid, no one will. Capone was stunned a few weeks later when Wilkerson rejected the recommendation stating, it's time for somebody to impress upon the defendant that it is utterly impossible to bargain with a federal court. This is Court to Court, your connection to what's happening in the federal courts around the country, providing information and ideas that will enhance your job and how the courts function. Now with today's program, Michael Burney. Welcome to Court to Court, the Federal Judicial Center's educational magazine program for all court employees. Today we'll learn about a public outreach program aimed at keeping young people out of bankruptcy court. We'll hear from several participants in the center's federal court leadership program and we'll learn about the trial that sent the notorious gangster Al Capone to prison. The number of bankruptcy filings has been rising steadily, reaching more than 1.6 million in 2003. That's a 98% increase in the past 10 years. Perhaps even more striking is that bankruptcy filings among those who are 25 and younger have shown about the same increase. Some people believe that financial literacy, or lack thereof, plays a big part in these numbers. Many in the bankruptcy court community are working to improve financial literacy, especially among young people. Recent studies indicate that just over half of all in-store financial transactions in the United States are now handled without paper. It's going to be 1731. As cash and checks give way to plastic debit and credit cards, consumer debt has more than doubled in the past 10 years. And mainstream media is paying attention. At the same time, Americans with credit card balances are carrying a record amount of debt. How much credit card debt is the average American family carrying? About $8,000. Debt is an American epidemic. More people are maxed out on their credit cards, going bankrupt or being foreclosed on than ever before. I sense a ground swell of support sweeping the country for financial literacy. It's the one part of education that probably is not a fundamental in every curriculum. It's the one thing that most of us, every one of us, deals with every single day. So why wouldn't we want to provide an educational foundation for our young people in that regard? Despite the obvious answer, Frieding says that young people don't seem to get much information about dealing wisely with the money they will earn during their lives. Plenty of people give us ideas on where to spend it, and not many people give us ideas on how to manage it. Who's there with credit cards? Among those who are giving young people information to increase their financial literacy is bankruptcy court Chief Judge John Ninfo in Rochester, New York. Over the years, many people he has seen in his courtroom are there because, by their own admission, they were overspenders and credit abusers. And when I've talked to them and interviewed them, it's very clear that in many cases they just did not know the basics of finances. Things like budgeting, the difference between wants versus needs, the true cost of credit, the addictiveness of overspending. And so many of them really said to me as I interviewed them, you know, if only somebody had come into my high school and told me the things that you're talking about, maybe I wouldn't be here today. And I took that to heart. So he began going into his community's high schools and speaking to students. But there were more young people than he could reach alone, so he asked the County Bar Association's Bankruptcy Committee for help. And in November 2002, the Credit Abuse Resistance Education Program, CARE, was launched. I really believe that the unique knowledge and experience that we have in the bankruptcy community can be of great benefit to young people today. Perspective employers, landlords, automobile dealers and so forth like we talk about in the brochure are pulling credit checks. And if they don't like what they see on those credit reports, they're turning people down for jobs. Student loans, like you saw, admission to graduate school, higher insurance rates. The CARE program teaches high school seniors and students entering college about budgeting, about the true cost of credit, about wants versus needs, that just maintaining debt does not mean being able to afford it, and about the many consequences of financial problems for young people. But if you've got to go into debt for that Armani coat, just because you want it, you're going to be the one paying the 56,000, you're going to be the one in bankruptcy court, you're going to be the one turned down for a job, you're going to be the one who isn't going to get into graduate school. The judge admits that presenters can't teach everything in 45 minutes or an hour, but they can lead students to awareness. The purpose of the presentation is to sensitize them to the fact that there are advantages to living a debt-free life as opposed to a debt-filled life, and that there are lessons, tactics and techniques that we can teach them to start them on the road to being financially literate and improving their financial IQ. Judge Ninfo says there's no single formula for a successful educational program. The key is committed people with knowledge and experience. Those committed people are the judges, the trustees, the assistant United States trustees and the private attorneys who see the problems of overspending and credit abuse every day. One of the questions I ask is, how did you get here? When we look at someone who has credit card debt in excess of their income, it's what happened. Attorney Lucian Moran has been making presentations with the CARE program since it began. And I believe the court will find that the local members of the bar and even attorneys who are not formal members of the bar, very receptive on doing these type of presentations. And you're going to be the one who can't help your kids go to college someday, just like both of those couples. I mean that boy who's now, you know, that lacrosse playing, I'm sure they're not helping him go to college, they're in my court. Of course one doesn't just walk into a high school or college and start talking to students. Clerk of the bankruptcy court Paul Warren, himself an attorney, also has been involved with CARE since the beginning. You need to be realistic going in to understand that the schools aren't going to throw their doors open without some level of education and discussion. Principles are pretty overwhelmed across the country with the challenges on their plate. Helen Wall is the new principal of Athena High School in the Rochester suburb of Greece. And something like this could sort of get in a pile if it just sort of breezes through the mail and comes as sort of like an invitational letter. And we probably get several of those a day. He actually made an appointment to see me and came in. I think you need to have somebody from your organization go out and actually sit down with that principal, sit down with that teacher, that guidance counselor, that superintendent, whoever it is at that school or school district. From my point of view, having a judge gets the bell rung almost every time because they're federal judges and doors will open to them that will open more slowly for the rest of us. When he left he had sold me not only the idea but I was very excited about getting the teachers together and making it a connection with what they teach. This is a very important topic and something that I believe is easily marketable by simply letting people know and showing the parallels and the connections to the learning standards that districts already have. The state education department standards in the area of career development and also the social studies standards. And I had two teachers in my office, one an economics teacher and one a life skills teacher and also a business law teacher. And they are very excited about the pre-teaching they will do before the presentation, about the articles they'll have the students read, about the website. The CARE website provides material not only for students but also for anyone wishing to create this kind of outreach program. Anyone can download anything from the website. Because the lessons, tactics and techniques that are in those materials they're applicable to everybody, adult groups, senior citizen groups, realtors, whatever. The presentations can be 45 minutes to more than an hour depending on a school's schedule. Most presenters combine the lecture format with visuals or even a video. I'm only 18 years old and in college I didn't even make that much in the year. I had 0% interest for 12 months and then it set up to 23%. I think across America school districts are really open to the concept of having experts in various fields come in and help us to prepare our students. But if you're not a teacher... It sometimes can be problematic of how do I talk to a high school group or how do I talk to a college group. I think a lot of lawyers have the impression that if they're in an auditorium full of kids someone's going to embarrass you. Having done 20 or 30 of these presentations it's not that bad. Everything you have to say to them is brand new. They've never heard it before. They're going to listen. It might be a little foreign to them. But once you start bringing in real stories, you connect it to students their age, you connect it to parents, grandparents, and you make it very familiar. A couple, your parents age, living in a suburb of Rochester just like you do, living the suburban life, doing the things that everyone does, supporting their children, all those things. They had $40,000 of credit card debt. The message is uneducated use of credit cards and unrestrained use of credit cards will be bad for you and let us tell you some of the things that we've observed in our professional lives have happened to other people and we'd like not to see that happen to you. Last weekend for the football game outside the stadium every 25 feet there was a kiosk people hawking credit cards to the students and they were giving away the neatest looking Penn State towel you've ever seen and the kids were lined up 25 deep. The judge's message surprised some of these Athena seniors. I can't believe how the credit cards pretty much scheme like they show up at football games and stuff. A normal family like mine has over $40,000 in debt. That's kind of surprising. I was surprised at how debt could affect so many other aspects of your life. I can't imagine my parents not helping me with college. When we come back, we'll hear how these students plan to change their financial behavior. We'll learn some guidelines for making a public outreach program such as this successful and we'll meet Athena high school graduate Jessica now in her first year at college. I think in college after hearing his presentation I've realized that his stories are true. The administrative office has developed a prepackaged educational program for high school seniors to make them aware of what filing for bankruptcy protection entails and the consequences of doing so. It's called staying out of bankruptcy court. It's available on the JNET site and soon will be promoted as a national event. To learn more, contact Rebecca Fanning in the Office of Public Affairs. The care program format has been adopted by a number of bankruptcy courts, including those in Cleveland, Kansas City, Missouri, Reno, San Diego and Vermont. As it continues to expand, care relies on the knowledge and experience of those in the bankruptcy community. In the second part of our report, we'll learn more practical techniques that help make an impact on young people. Now a first-year college student, Jessica graduated from Breece Athena High School outside Rochester, New York, where she heard Judge Ninfo's credit abuse resistance education presentation. I think in college after hearing his presentation I've realized that his stories are true. Credit card companies would do anything to get people to sign up. There was a day where there was a free six-inch sub and everyone's like, oh we're going, we're going but you didn't know that you would sign up for credit cards. My friends had no idea that this credit card meant anything. They were like, oh no, no, we're not going to use it. And I said, well it still makes a difference. If they had been to Judge Ninfo's presentation, they would realize that that credit card is going to be open for the rest of their life until they close it. It's that kind of awareness and knowledge that those involved in the care program hope to achieve in the short time available for a presentation. They think they can afford the debt just because they can pay the minimum payment of $15. They can just keep paying it and borrowing more. As a tangible reinforcement, each student at a care presentation gets the brochure, which covers the points presenters hope to make, including one of the judge's favorites. If you can eat it or drink it, don't charge it. It's like 12 bucks, can you afford that? Sure, don't worry about it. I've got my credit card. For the presentations, sometimes it's more effective to work in teams. If I miss something, someone picks it up, or if we have a question, perhaps one of the panel members that are there are best or better able to answer that question from their own life experiences. Regardless of technique, Judge Ninfo believes the bankruptcy community makes an impact. They will listen to what you say because you have that firsthand experience. If that's what you need to do, yes. Do you have the money to pay when it comes in? Well, if you do, then... No, do you have the money to pay? No. See, that's the number one question. Since I've heard Judge Ninfo's presentation, I've definitely changed my spending habits. I now don't charge anything under $10. Actually, I have a new rule. I don't charge anything under $20. Because that way, I always know how much I'm spending, and I can see the cash, and I can compare it to how much I'm working. I can say, okay, this is two hours of work, this is three hours of work. With a credit card, it's no hours of work because you don't physically see what you're spending. I think I'm going to get this. All right. How are you going to pay? Cash, credit. Credit. Credit card. If you're seeing how much money you're giving, you're not going to want to spend as much money. So if you're buying a pair of $100 pants, if you're going to hand over $5.20, you might think you want to buy some cheaper pants. Judge Ninfo believes it's important to set realistic goals when developing an outreach program, and not expect initially to make presentations at a large number of schools. And you do one high school, and you reach one student who otherwise wouldn't have this information. Your program has already been successful because no one else is doing this. No one else is doing this. And if you don't reach that one kid, no one will. I think that everyone in my class thought it was one of the best things they've ever seen and it really hit home. Actually, my friend raised her hand and she said, this is the best thing I've ever seen! And she wasn't kidding. The U.S. Trustees Program, which makes available an educational brochure at 341 meetings of debtors and creditors, encourages programs such as CARE. So what we're doing at the U.S. Trustee Program is reaching out to others to partner up and make available to high school and young folks and college bound folks as well, a financial education program so that they can acquire the skills that they need to get through life. It's something that has nowhere else taught, and it's stuff that I'm so glad I knew when I came to college. And that will start accruing interest at 15%. So now I'm paying interest on interest. Every single time I walked out of there as a public servant, I made a difference to some or all of those kids. Probably never apply for more than one credit card at once. I'm going to make sure I do that so I don't get caught up and just make sure I'm not buying anything I don't need. If we can assist people in making a life choice, and they remember the charges mantra of wants and needs, perhaps they won't find themselves before a bankruptcy trustee or before a bankruptcy judge. I'm going to try to set up a budget because I think it would be a good habit to get into. When I go out to the store with my mom, I won't say, Mom, can I get this? Because it's not something I necessarily need, but it's something that I want. It's about the kids. Reach one kid and you're already a success. If you want to learn more about the CARE program, contact Chief Judge John Ninfo at the email address or phone number on the screen. To learn about other financial literacy programs, contact the Executive Office of the U.S. Trustees Program or the Administrative Office of the U.S. Courts at the numbers on the screen. One result of our country's experiment with prohibition in the 1920s was the rise of criminal gangs. Among the most infamous and violent was Al Capone's. While he avoided prosecution for the many murders and other crimes he and his gang committed, he was eventually prosecuted for what today is called white collar crime. Here with that story is my colleague Bob Fagan. During the late 1920s, law enforcement agencies struggled to convict Al Capone, notorious head of the Chicago underworld, for countless murders and other illegal activities. Named Public Enemy Number One by the Chicago Crime Commission, Capone easily evaded prosecution through bribery and intimidation. By 1928, it was estimated that Capone's organization made over $100 million from various illicit rackets, including bootlegging, gambling and prostitution. In Washington, D.C., frustration with the failure to convict America's number one gangster mounted after the election of President Herbert Hoover. Have you got that fellow Capone yet? Became Hoover's daily refrain. The federal government couldn't go after Capone for murder or other state crimes, but income tax evasion was a federal offense. A group of special internal revenue agents was put on the case to dig up information proving that Capone had knowingly and willfully evaded paying his income taxes. On learning of the investigation, Capone was overheard to say, the income tax law is a lot of bunk. The government can't collect legal taxes from illegal money, and he would have been right a few years earlier. But in 1928, the U.S. Supreme Court ruled against a bootleger who had not filed tax returns for that reason. The court could find no reason why the fact that a business is unlawful should exempt it from paying taxes that, if lawful, it would have to pay. Because of that ruling, Al Capone could be prosecuted for tax evasion. After more than two years of hard digging and promises of protection for witnesses, in June 1931, the Internal Revenue Unit presented enough evidence to get a grand jury in the northern district of Illinois to indict Capone. The indictment charged that he owed $219,000 in back taxes for the years 1924 to 1929. Facing a possible 34 years in prison, Capone offered to plead guilty in exchange for a light sentence. U.S. Attorney George E. Q. Johnson recommended a sentence of two and a half years and a fine of several hundred thousand dollars to U.S. District Judge James Wilkerson. Capone was stunned a few weeks later when Wilkerson rejected the recommendation, stating, it's time for somebody to impress upon the defendant that it is utterly impossible to bargain with a federal court. He permitted Capone to withdraw his guilty plea and set trial for two months later. During those months, the mob boss managed to get a list of jury panel members for his case and set out to bribe or intimidate them. But Capone was in for another surprise. The prosecution found out about the jury tampering and told Judge Wilkerson, the judge assured a worried Johnson, bring your case into court as planned, leave the rest to me. On October 6, 1931, crowds of spectators gathered to see Capone as he arrived for trial exuding confidence. He soon realized, however, that the judge had foiled him by switching jury panels with another judge at the last minute. The twelve jurors selected that day were from a rural area. They included three grocers, a hardware merchant, and a farmer. The jury was sequestered to protect members from any tampering. The government had to prove that Capone had earned taxable income during at least one of the years named in the indictment. The prosecutors called dozens of witnesses to testify about the huge sums of money the gangsters spent. Finally, the government presented a letter written by Capone's lawyer seeking a compromise of the income tax claims. It admitted that he had income of more than $200,000 during the relevant period and had paid no tax on it. His attorneys argued strenuously that the letter couldn't be used as evidence against the defendant, but in a devastating blow, the judge ruled against them. The only defense left to Capone was to argue that he had gambled all his money away at the racetrack. In closing argument, the defense counsel contended that the prosecution had only proved that Capone was a spendthrift. After less than nine hours of deliberation, the jury delivered its verdict. Capone was guilty on five of the 23 counts. Judge Wilkerson sentenced him to 11 years imprisonment and a fine of $50,000. Prosecutor Johnson credited the absolute unreachability of the federal courts for his success. I cannot too emphatically praise the high caliber of the federal judges, he said. Capone was among the first group of inmates sent to Alcatraz, the new maximum security federal prison in San Francisco Bay. He was released in 1939, a sick and broken man. In 1947, the brutal mob boss who violently murdered so many of his rivals died quietly at his home with his family around him. He was 48 years old. That's a moment in court history. I'll be back with another in a future court to court. The FJC's federal court leadership program completed its fourth class last year. Among the requirements for each participant is a project that includes a temporary duty assignment. Many of these projects focus on techniques and practices that other court units may find useful. When the class was here for its final meeting, we spoke with several participants about their projects. We have what is called a step child syndrome. Smaller divisions tend to feel like they get left out. Division manager Catherine Bacon looked at problems common to court divisions and bank branch offices. And they tried to deal with that by communicating to the other branches. Whether the communication dealt with them or not. They felt like including them in everything made them a part of the team. And it was the power of positive relationships. To better understand motivating others, Hank Greer spent time with his local high schools cross country coach who in 16 years has had 12 state champions. I knew that that school district didn't have a monopoly on the fastest kids in the state. And so there had to be something that he was doing to bring the best out. He was always positive about how well he did and the effort that they made. And he always showed his appreciation for that. Greer says the same techniques are important for supervising court staff. Letting them know that they are important to you and that you appreciate that the work that they do. And in turn trying to bring out the best in them. Helping them set goals and ensuring they have goals to reach and guiding them along that way. To help determine if a similar public service area would be advisable and how to staff it. Operations manager Karen Moore visited a state court self-help center for pro se litigants. Their emotions are extremely high at that time. But I found that they felt comfortable coming to a center that was designated solely for their reasons. The people that would be in the public self-help center wouldn't necessarily be court staff. During the conversations that we've had in the clerk's office with our bar association, there are agreement with a public health center where they would staff people. Training specialist Ruben Amaro wanted to know the techniques of a national retailer noted for always putting the customer first and how that could be applied in a court setting. One of the things that I noticed in the visit was just how individuals were really recognized by not only their managers but by their peers on how they provide exceptional customer service. All of us provide something to the court and by acknowledging the efforts of each employee, they could make sure that each employee recognizes that they do provide something to the courts. And I think employees would feel good about their role and want to do even more to make sure that their court is providing the best possible service. Melissa Romero spent several days at a nationally recognized medical center. I wanted to learn about the organization and the quality of service that they provide to the community. I focused on their leadership style. Well, I learned that everybody in the organization has a role to play. My role as a supervisor is to create a culture and it's so important to create that culture of shared values. Every task that we perform should be aligned with the court's mission and vision. You can soon access a list of all the recent federal court leadership projects at our website on the DCM. You'll find the link by clicking on court staff education and then on multi-phase programs. If you find a project you'd like to know more about, please contact Fran Tolar here at the center. That's our program for today. We'd like to hear your comments and get your ideas for future topics. Please email me at the address on the screen. Our next court to court will feature an easy to use property management system and look at the work environment in smaller divisional offices. We hope you'll join us. On behalf of everyone at the Federal Judicial Center, thank you for watching today.