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    16 Replies Latest reply on Nov 7, 2008 10:05 PM by Lighthouse24

    Banking Embezzlement - Motivation?

    chuckgallaghe Wayfarer
      What would cause someone to become a fraudster? Read this and comments are welcome!

      http://chuckgallagher.wordpress.com/2008/11/04/banking-embezzlement-what-motivated-rebecca-dawn-long-to-commit-fraud/
        • Re: Banking Embezzlement - Motivation?
          DomainDiva Ranger
          The end justifies the means.

          "Now I doubt that the bank will admit to their role in the fraud scheme, but insufficient internal controls creates "opportunity."

          So lets see are you saying that by a lack of internal control that the bank is at fault because she stole money from them? It does not matter what her need was. Stealing is wrong. If she was in that much trouble financially she needed to ask for help. I could care less what her motivation was she took what was not hers. How is anyone supposed to identify her need based on your post? How is anyone supposed to define her rationalization or the loopholes in bank procedures? Who cares? All you have done is give her more publicity while asking for their privacy to heal. If you were really concerned about her privacy and her healing you would have used a psudonym and described the situation.

          I am having a really hard time believing that you are an 'ethics' coach/speaker. You seem to make decisions based on whatever 'could' be wrong or right at the time. Thats called 'situational ethics' and obviously I do not subscribe to that nonesense. Lets see I can steal from this big bank or whatever but I'll take back the 2.00 notepad that ended up in my bag by mistake.

          Thieving is wrong.. believe it or not this is a 'do to others as you would have them do to you world'. If more people behaved like that we could eliminate a lot of crime in this country.

          Just because my car is parked out front and unlocked with the keys in the ignition does not mean you are supposed to get in and drive away.

          For-ev-er-more.

          (Obviously I have no patience with foolishness).
            • Re: Banking Embezzlement - Motivation?
              chuckgallaghe Wayfarer
              In the world of fraud...good people sometimes take advantage of situations. Perhaps from your comments you don't subscribe to the possibility that good folks can make poor choices.

              In order to commit fraud, like it or not, it takes the three components. Any one involved with fraud prevention will tell you that internal controls or the threat of getting caught is one means of keeping people honest.

              In my post, I am seeking contributions or comments from those who may be close to the situation - who may have an inside track on the motivation.

              I am beginning to think that you see things as black and white. My dear...the world is full of grey. Theft is wrong - no mistake. But, theft cannot take place without the right ingredients. There must have been an internal control wrong or lacking somewhere or she would not have been able to effect her theft.

              Frankly, the lack of controls is, in large part, why we have the banking - financial mess we have today. I suppose you would blame the borrowers for the problem. Obviously they borrowed more than they could legitimately pay back. I guess it is there fault. Or would you agree that financial institutions, in their push for more and better quarterly profits, encouraged people to borrow money that realistically 15 years ago they would never have qualified for? Peoples fault of banks - or perhaps both.

              In the case of the entry...I suspect it was both. Strong internal controls eliminate opportunity and without opportunity there can be no fraud.
                • Re: Banking Embezzlement - Motivation?
                  DomainDiva Ranger
                  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.
                    • Re: Banking Embezzlement - Motivation?
                      chuckgallaghe Wayfarer
                      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 Ranger
                          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 Wayfarer
                              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?
                                  Lighthouse24 Ranger

                                  "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 Wayfarer
                                      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 Ranger

                                          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 Wayfarer
                                              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 Ranger

                                                  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?
                                Lighthouse24 Ranger

                                People are motivated for their own reasons -- so she is the only one who can really answer that question. A related question, however, is what made her think she'd get away with it?

                                One theory: Bring together a group of 1,000 people at random, allow them to interact for a few hours, and all but about 35 of them will think they are smarter than the "average person" there (says a University College London study). Only one of them can actually be THE smartest person there, yet the study found that 122 of them will THINK they are (or might be).

                                The vast majority of those 122 will be men, but most of those men will believe that everyone else there sees them as being smart, too. In contrast, the women who believe that they are the smartest person in the group also tend to feel that others in the group are not recognizing how intelligent they are or giving them their due. So, if criminally-motivated, one of those women might be inclined to believe that she was not only smart enough to pull off a crime undetected, but also underestimated enough by those around her to divert any real suspicion until it was too late if the crime was discovered.

                                In every one of the groups studied, there was at least one person who responded that he/she was, or might be, the smartest person in the group of 1,000 -- but who actually tested as being somewhere among the 26 least intelligent. That person gets caught, I'm guessing.
                                • Re: Banking Embezzlement - Motivation?
                                  NoBullFunding Scout
                                  Welcome Chuck. While you are clearly trying to drive traffic to your site by posting these thought provoking questions, its a nice break from the "Who wants to borrower a million dollars by tomorrow with bad credit" posts.

                                  You seem to like pointing the finger at the big bad bank whenever possible. As noted in other responses, just because I don't lock my car doesn't give you the right to take it. If you really think the bank is somehow responsible, that sounds like ambulance chaser logic.

                                  Expand that to the mortgage crisis (which by the way had nothing to do with internal controls): I am very tired of hearing about the poor consumer, who got swindled by the evil bankers. Since when is it the responsibility of a bank to tell the customer what they can afford? If you don't understand your own budget, you shouldn't be borrowing. The only people I feel for are those who lost their jobs which led to foreclosure, as that was out of their control. Everyone else over extended themselves, plain and simple. The world would be a better place if people could take responsibility for their actions, and stop blaming everyone else for the results of their poor decisions.

                                  I wanted a house but prices in my area made it unaffordable, so I did a novel thing, I DIDN'T BUY.
                                    • Re: Banking Embezzlement - Motivation?
                                      chuckgallaghe Wayfarer
                                      Thanks for the comments. Found this community and thought I'd try it out.

                                      Your comments strike a chord. But, I have to disagree on one point, those banks who maintained conservative lending practices (perhaps missing some loan opportunities) are doing just fine now - even in an economic down turn.

                                      Take Wachovia - it used to be a very conservative NC bank - solid as a rock. Then it, in its question for size and might in the big corporate world, bought a bank out West. That was Wachovia's undoing. In fact, a Senior Mgr. who will remain nameless said to me at a recent event where I was speaking on the mortgage and banking crisis, said the following: "We became to greedy. We wanted to increase our earnings and felt that we could push the envelop by sub-prime lending. There's a reason it's called 'sub-prime' and we just shouldn't have done it."

                                      If a mortgage broker or banker says to me, Chuck based on your income you can afford this - you know I might just believe him/her. All too often in the past few years that is exactly what happened. Even Greenspan warned that we needed tighter controls.

                                      Oh well...I'm 51 and have seen this before (perhaps not at this magnitute) and after the blood is shed, jobs are lost and value disappears - it will return to normal. Meanwhile, the fact is - where there is financial pain (regardless of who caused it) there will be increased fraud. Why - INCREASED NEED!
                                        • Re: Banking Embezzlement - Motivation?
                                          NoBullFunding Scout
                                          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.