Home: Message List - Banking Embezzlement - Motivation?

Re: Banking Embezzlement - Motivation?

Lighthouse24 — Sat, 08 Nov 2008 01:01:11 GMT

Chuck, I guess this is where our viewpoints may differ: "Many law abiding citizens, elected to take a path of fraud when Katrina hit . . . because the ‘opportunity' was right."

I don't quite believe that. If they committed a crime in the wake of Katrina, I'd bet they weren't law abiding citizens before it hit. Squeeze an orange, you get orange juice -- you never get tomato juice. Put a person under pressure and the essence of what's really inside always comes out.

I'm not sure that 1 in 9 Americans are "finding themselves incarcerated" (as in "Oops, what the . . . how did I end up here?"). They knowingly committed a criminal act (probably more than one time) and eventually got caught. Oops.

A contributing factor to that 1 in 9 statistic is that given a choice between spending time: (a) at home in their neighborhood, (b) at work in a job they can get with limited education and skills, (c) in the military or some other service occupation, or (d) in prison -- a sizeable number of people would (and do) opt for prison. They "do the crime" because "doing the time" is not all that bad in their case . . . but that's another debate altogether.

Re: Banking Embezzlement - Motivation?

NoBullFunding — Fri, 07 Nov 2008 22:13:26 GMT

I don't dispute that greed caused the mortgage crisis, but again, my comment was directed at your claim that the current mortgage crisss it was due to lacks of internal controls. Banks making the conscious decision to relax lending standards is VERY different than lacking internal controls.

As far as listening to a banker...it's not hard to look at your take home pay and figure out if you can afford a monthly payment. A bankers job is to approve loans that fit within THEIR criteria, not the borrowers budget. We are all big boys and girls, and should not blame others for our bad decisions.

I had a business and it failed miserably. I'm not asking for a "redo", I'm not asking for the debt to be forgiven, and I'm not blaming the landlord who rented me the space, despite the fact that the rent was not commensurate with my ability to generate revenue. This is no different than people who paid to much for homes and can afford them.

Re: Banking Embezzlement - Motivation?

chuckgallaghe — Fri, 07 Nov 2008 22:09:13 GMT

Don't take my comments as doom and gloom. They are not intended as such. I speak on business ethics and fraud prevention and just like with Katrina - when there is crisis the level of fraud rises. People, when faced with daunting situations, will do what "they feel" is necessary to survive. In many cases - perhaps that is the case with this posting - the person created the crisis, but to them it is a crisis nonetheless, hence it is often easier to take advantage of an "opportunity" than to do what they know in their heart is the right thing.

Many law abiding citizens, elected to take a path of fraud when Katrina hit - not in some cases because they had to, but because the "opportunity" was right. Those folks are the minority, but the level of fraud rose.

As a nation we will rise and do the right thing. But with 1 in 9 American's at some point in their lives finding themselves incarcerated, this time of economic crisis will be an open door for many to become what some call a "fraduster."

Re: Banking Embezzlement - Motivation?

Lighthouse24 — Fri, 07 Nov 2008 21:38:58 GMT

I appreciate the reply and compliment, Chuck. You noted that "with the current economic climate - the excessive debt and poor credit that many are currently experiencing will shift common sensibilities and fraud will increase." I really hope not.

Do you think it's possible that hard work and personal responsibility might increase instead -- and that the tough times will bring out the best in people rather than the worst?

I have no doubt that people who were inclined to be dishonest before the economic crisis will continue to be, but I'm thinking that most people who were truly honest and truly the victims of circumstance will have what it takes to climb back without resorting to criminal activity.

I recognize that there are a few honest people who are trying to climb back, but simply cannot because they are dealing with multiple crises at once (for instance, losing their jobs, insurance, and homes -- and then having a family member with a serious illness and no money for care or treatment). Yes, this person might "snap" and resort to an uncharacteristic action, but only if he/she is abandoned and has no other choice. That seems unlikely in this country, at least right now (after all, in spite of our economic difficulties, we're still paying rent and buying groceries for 112,000 Katrina evacuees, 39 months later -- if anything, we are more likely to help people who don't really need it than to abandon people who really do).

I hope we come out of this crisis better off as a nation, not worse.

Re: Banking Embezzlement - Motivation?

chuckgallaghe — Fri, 07 Nov 2008 20:33:00 GMT

LIGHTHOUSE...Excellent post.

A very thoughtful response that combines practical as well as emotional factors that contribute to fraud. In reality, there are two types of individuals who commit fraud. (A) people who are not "normal" in the clinical sense - i.e., their values do not hold with the norm - in other words predisposed to theft, etc.; and (B) those people whose Urgent Financial Needs out weigh their practical sensibilities. Those needs may come from: (1) Excessive Lifestyle; (2) Drugs, Gambling, etc.; (3) Excessive Debt, Poor Credit, etc.; and/or (4) Excess pressure from family or other outside forces.

One thing that will be true, with the current economic climate - the excessive debt and poor credit that many are currently experiencing will shift common sensibilities and fraud will increase.

Again...GREAT POST! Thank You!

Re: Banking Embezzlement - Motivation?

Lighthouse24 — Fri, 07 Nov 2008 18:41:50 GMT

"Normal" people (clinical term, not mine) make choices with their hearts, minds, and spirits. Every single thing we do is done to fulfill a combination of emotional, intellectual, and behavioral needs -- and is guided by a set of personal values. The more "basic" the need, the broader the set of values that we will apply (for example, I'd consider it okay to use physical force against someone if he was holding my head underwater trying to deprive me of air, but not if he was a competitor who did something sneaky to deprive me a potential new client).

So all human behavior is situational. Although not everyone will make the same decision or take the same action in a given situation, a "normal" person (again, that's a clinical term, not mine) will tend to make the same decisions and take the same types of action when facing similar situations. In other words, behavior in normal people is relatively predictable -- which is why employment interviews, background checks, reference checks, pre-hire testing, etc. are relatively reliable indicators of future job performance if done properly. A normal person doesn't commit fraud out of the blue -- there will be a history of having lied, cheated, deceived, etc. to fulfill personal needs (perhaps not on such a grand scale as embezzlement, but lots of smaller incidents).

Beyond that, mental illness, drug or alcohol problems, etc. can cause a person to misperceive or misinterpret the emotional, intellectual, and spiritual aspects of a situation -- and therefore behave abnormally and unpredictably.

Likewise, a "significant emotional event" can induce someone to radically modify his/her set of values -- and behave abnormally and unpredictably. (That one is a favorite movie theme -- perfect husband and non-violent gentleman becomes a stone cold vigilante executioner when criminals take his family from him).

Chuck, you noted that you only saw "black and white" in Diva's posts, yet the dichotomies that stood out most to me in all the dialogue above were in your comments regarding a "good" person and a "bad" choice. There are just people and choices -- "good" and "bad" are situational. Fraud, on the other hand, is against the law -- and that seems very black and white.

Regarding controls (or lack of), controls on the banking industry overall, and controls at the branch level to prevent or reveal fiduciary fraud, are completely different issues. In my experience with banking clients, there were about 160 investigations into suspected fraud -- that turned out NOT to be fraud -- for every one case that actually was. How many of us run our businesses that well? Do you have a certified third party that double checks and verifies the work of all your employees and contractors -- and not only catches and reports the things they occasionally do wrong, but monitors them closely enough to catch and report 160 things they MIGHT have done wrong (but actually did right) for each one thing they do wrong? I certainly don't.

Re: Banking Embezzlement - Motivation?

chuckgallaghe — Fri, 07 Nov 2008 16:18:36 GMT

Boy that DIVA part of your name really comes through in your posts.

I know what it means to me...I was just trying to establish some dialogue since you seemed to be inclined to avoid the question posted on this thread. The question at hand is - about fraud and motivation. Have you had any experience with fraud? Would you care to comment on Motivation for fraud? A bank was embezzled from by a human...is it just "bad seed" black and white or are there possibilities where a good person can make a bad choice and end up with a conviction?

Stay focused on the topic...as, in my opinion, your first post today was far from topic based.

Re: Banking Embezzlement - Motivation?

DomainDiva — Fri, 07 Nov 2008 16:00:01 GMT

What does a "do unto others world" mean to you?

Not what it means to me, but what it really means in day to day life and dealing with other people.

If you do not know what it means, then all of my explanations will only be met with more questions.

Re: Banking Embezzlement - Motivation?

chuckgallaghe — Fri, 07 Nov 2008 15:02:35 GMT

What does a "do unto others world" mean to you?

I still see only black and white in your posts. But, perhaps I am missing something. How does your latest post contribute to the question about fraud and motivation?

Re: Banking Embezzlement - Motivation?

DomainDiva — Fri, 07 Nov 2008 14:49:17 GMT

When there is a grey area, I deal with it. As in a previous post in another thread you made some terrible untrue assumptions about me then. These you had tyo quickly apologize AFTER you did some due diligence. This is another one of your untrue assumptions. The 'my dear' diminuitive answers are not appreciated. You may disagree with me but personalizing those disagreements is uncalled for.

I believe it is a do unto others world so maybe you may want to consider that phrase the next time you have a situational ethics problem.