When a worker decides to commit workplace fraud, it can generally be explained with the Fraud Triangle, developed by American criminologist Donald Cressey:
- Pressure side
- Opportunity side
- Rationalization side
Judy had been a bank teller for a regional financial institution for 14 years - since her senior year in high school. Over time, she became a respected authority in her area, and bank managers and employees saw her as a good person. Her value increased when the bank promoted her to a supervisory position when she was 30.
Though she was finding success in her job, her husband was spending too much time at his work, and she turned to gambling to ease her loneliness. She soon got into significant debt, but she didn't tell her husband. She also didn't tell her family or seek mental health or financial counseling. Instead, (surprise) Judy chose to steal money from bank customers.
Judy had a problem of physical and emotional isolation - a secret to hide from everyone. She felt inhibited to talk through her situation with anybody and work on solutions. In his classic book, "Other People's Money: A study in the social psychology of embezzlement," (Montclair: Patterson Smith, 1973), Dr. Donald Cressey called this a "non-shareable problem." In this case, it was the pressure side of the Fraud Triangle.
So, she used her position of trust, responsibility and the technical skills as an experienced teller and supervisor to commit the fraud - opportunity, the second side of the Fraud Triangle. She identified obscure accounts and believed that:
- No one would miss the funds.
- The stolen funds were small portions of the accounts.
- The bank wasn't paying attention.
- The victims could afford these small amounts.
- Insurance would cover the bank and victims.
Her gambling addiction, in turn, "greatly contributed" to her crime. Judy rationalized - the third side of the Fraud Triangle - she committed her crimes because of family factors she couldn't control that then heightened her gambling problem. Classic rationalizations." (emphasis added)
Contributed by John David Gardiner.
Please join presenter John Gardiner on Tuesday March 13, 2018 at 10:00am for the "How to Prevent Employee Theft, Embezzlement & Fraud" webinar as he addresses head on case studies like the above, as well as defines and details the five categories of embezzlement, best practices to avoid the threat (significant) / likelihood of embezzlement occurring and details how to best address suspected employee embezzlement.