What Makes a Fraudster Tick?


Andi McNeal, CFE, CPA
ACFE Research Director

Ever wonder what makes some people commit fraud while others would never conceive of crossing that ethical line? What causes one person facing financial hardships to steal from his employer and another to find a more honest way to pay his bills? And what goes through the mind of individuals as they’re making that choice—that first decision—to become a fraudster? How do they continue to justify their actions to themselves as they carry out their schemes?

These are all questions we’ve been asked countless times over the years and, frankly, they are questions we’ve often asked ourselves. To many people, especially to those of us who spend our lives fighting fraud, the concept of “what makes a fraudster tick?” is fascinating. So we recently set about compiling and comparing fraudsters’ stories, looking for common threads and clues. The results are examined in the workbook and video for our new self-study course, Inside the Fraudster’s Mind.

As part of our research for this project, we combed through the volumes of video footage we’ve acquired of convicted fraudsters telling their stories in their own words. Each story is interesting in its own right, but when combined, they revealed several common thought patterns displayed by these perpetrators before and while they committed their crimes. We also delved into different theories offered by experts—both past and present—about what causes some people to resort to a life of crime. And we explored some of their common motivations and rationalizations, as well as some of the statistical trends in who is known to commit fraud. The resulting compilation provides a captivating psychological study of fraud perpetrators and a valuable source of knowledge for anti-fraud professionals.

One word of caution that merits mentioning, though, is that the common characteristics we found among fraudsters are also found in many people who do not choose a path of crime. Understanding and watching for the psychological signs of fraudsters can be immensely valuable in investigating a suspected perpetrator or even in identifying potential warning signs that merit further examination. But while observing for such behavioral and lifestyle red flags, we must always make sure that we don’t accuse anyone of criminal activity based solely on such circumstantial observations. Even with this mindful warning, however, we hope that our findings are helpful in understanding fraudsters’ common traits and useful in preventing and detecting their fraudulent activities.

Read more about Inside the Fraudster's Mind.