Magazine article Risk Management

Profile of an Embezzler

Magazine article Risk Management

Profile of an Embezzler

Article excerpt

Embezzlement is as much a violation of trust as it is a crime. Employers are often left shocked, embarrassed and disheartened when they realize they have been deceived. But there are warning signs.

Average Joe?

There is no one characteristic that singles out the perpetrators, but there are several corroborating circumstances that can lead employees astray. They must hold a position of confidence within the organization, be able to recognize an opportunity for fraud, and possess the technical skills necessary for misappropriation.

For example, teenagers working part-time jobs can not pilfer as much as adults in entry-level positions, and these workers certainly do not have the ability to embezzle as much as a vice-president. The amount that can be stolen is directly proportionate to the amount of power, responsibility and trust associated with a specific position.

Personal financial need and the ability to rationalize appropriating company funds to meet that need feed the urge to embezzle. Examples include:

* living beyond means

* high personal debt

* high medical bills

* poor credit

* personal financial loss

* unexpected financial needs

* costly addictions

* extramarital affairs

The most common cause of embezzlement, though, tends to be greed. Often, an employee feels increasing pressure to boost his or her income to match an increasingly upscale lifestyle. The first major purchase is usually a new vehicle, but home renovations, boats, exotic vacations and even second homes may follow. Financial appetites become insatiable. Keeping up the facade becomes paramount, as violators value their newfound wealth, status and reputation above all else. They feel they are deserving of it, which allows them to perpetrate their crimes. Like Publilius once wrote, "Poverty wants much, but avarice--everything."

In some cases, would-be offenders already possess the requisite technical knowledge before they are hired by an organization. For example, accountants are taught in school how to detect embezzlement; the criminals simply apply this knowledge. More often than not, though, experience is all the practical training they need. …

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