John Gill, J.D., CFE
ACFE VP of Education
It is an unfortunate truth that fraud exists in every country and in every industry. One of the most challenging parts of this continuing fight is understanding what goes on in the mind of someone who commits fraud. What causes one person facing financial hardships to steal from his employer while another finds a more honest way to pay his bills? And what goes through the mind of individuals as they are 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?
As an anti-fraud professional, it’s important to look for the answers to those questions. You cannot effectively deter fraud unless you have a full and complete grasp of the different motivations and tipping points that might affect a fraudster. I have found that interviewing fraudsters is one of the best tools to truly enter their minds. Each story is interesting in its own right, but when combined, you begin to see the common thought patterns displayed by these perpetrators before, during and after the crime. It is also important to examine different theories offered by experts — both past and present about what causes some people to turn to fraud.
One thing that has always stood out to me while trying to understand fraudsters is that the Fraud Triangle is alive and well. Every so often, someone argues that the triangle is no longer relevant or needs to be revised. But based on the interviews the ACFE has conducted over just the last four or five years,it is just as relevant now as it was back in Dr. Donald Cressey’s day. His basic theory still holds up: fraud is likely to occur if the subject has some kind of unshareable financial pressure, a perceived opportunity to relieve that pressure, and the ability to rationalize his or her conduct so that there is a lessening of guilt or a feeling of justification.
I am excited to announce that the ACFE has developed a new 1-day class, Understanding the Mindset of a Fraudster. We will also be offering a 4-hour version of the class as a Pre-Conference session at this year’s 27th Annual ACFE Global Fraud Conference. The seminar will examine fraudsters’ behaviors and motivations, as well as the pressures, opportunities and rationalizations for their frauds. Through discussions about human behavior, video interviews with convicted fraudsters and interactive problem-solving, you will gain a deeper understanding of mindsets and personality traits common to many fraudsters.
A good fisherman understands how a fish reacts to different types of lures and water conditions. A good fraud examiner understands how individuals react to different interview techniques and workplace controls. Understanding more about the mindset of a fraudster will better prepare you to catch those people who travel outside the lines to enrich themselves at someone else’s expense.
Read John's full article and find more training resources in the ACFE's latest Resource Guide.
