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In the words of the embezzlers

Greed and opportunity can drive people to commit egregious acts – like embezzling from an unsuspecting employer. What drives an honest person to do something so despicable–to commit acts a trusted person knows are illegal, immoral, and unethical?

Criminologist Donald Cressy researched that issue by interviewing 200 people who were in prison for embezzlement. Cressy focused on embezzlers who had been highly trusted and were considered to be honest; he ignored those who took jobs with the intent to steal.

Cressy identified three elements that drive honest people to steal: a financial need they can’t or won’t share with anyone, a perception that they can steal with little risk of being caught, and a way to rationalize an act they know is wrong. If a person has a financial problem and sees a risk-free opportunity to resolve it, it’s easy to find a way to rationalize it. The individual “borrows” the money or takes it to even the score because—in her opinion—she hasn’t been treated fairly.

I was recently reminded of Cressy’s theory when I interviewed several Idaho women in prison for embezzlement, two of who agreed to speak on camera. One woman pleaded guilty to stealing $150,000 from her employer. Another pleaded to smaller thefts from two employers. Both women are in their mid-thirties, college educated, bright and articulate.

When I asked why they committed these crimes, their responses were nearly identical: “I was depressed and it made me feel better.” “I had a tragedy in my life. The only thing that soothed me was money.” “It was my way of fixing myself. I was depressed. I was having relationship issues.”

The women I interviewed (Denise and Mary) told me they often gave away their purchases, or stuck them in the back of the closet, price tags intact. It was the act of buying something they couldn’t afford that gave them the “rush” that drove them to steal again and again. Denise explained it this way: “It’s a high when you have that money in your hands and you go and spend it. And the adrenaline just pumps through you and then it’s over and you’re better for a minute until you have to increase it because the little high doesn’t work anymore.”

Denise’s comments reminded me of a Twin Falls physicians group whose trusted office manager embezzled over $400,000 over four years. She claimed she started stealing to help family members, but later lavished herself with gifts to ease her depression and feed her shopping addiction.

But this addiction doesn’t come without a personal cost to the perpetrator, even before they’re caught. Denise reflected, “I would do it and just cry for hours. I knew I was wrong but it was almost like I couldn’t stop.” These women became moody and defensive; they brushed aside questions from concerned friends and family by making up stories–about retirement funds from former employers, birthday gifts, and lottery winnings.

And even “normal” life was affected: “I withdrew in our community [from] events and things I would be out there doing with my kids because it’s always, ‘you’re waiting for the police to come’ and you are constantly looking over your shoulder.”

Treasure Valley financial crime detectives also have noticed the trend of stealing to ease depression. It’s not an official study, but the pattern of behavior is obvious. What can business owners do about it?

Recognize that as much as you would like to treat your employees as family, they are not your family. You can be fair, generous and friendly, but you’re the boss and it’s your responsibility to hold employees accountable. You don’t know what’s going on in their personal lives and they aren’t going to tell you. They’ll come to work smiling, even when they feel depressed.

Protect your organization – and your employees – by developing transparency in the financial workflows and holding people accountable.

Trust, but verify.

Denise McClure, CPA, CFE is a forensic accountant and the owner of Averti Fraud Solutions, LLC in Boise. She is a frequent author, speaker and trainer on preventing and deterring embezzlement and fraud. Her ideas on fraud risk management have helped organizations improve efficiency, profitability and security. For more information, visit www.AvertiFraudSolutions.com or e-mail Denise@AvertiFraudSolutions.com.




About Denise McClure