Pinpointing Fraud Offenders

5 Tips to help you pinpoint fraudsters
By Dorothy Riggs, CFE

What is fraud?

According to the legal dictionary, fraud is typically understood as dishonesty enacted for unwarranted advantage. The legal definition is A false representation of a matter of fact—whether by words or by conduct, by false or misleading allegations, or by concealment of what should have been disclosed—that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury.

What kind of people commit fraud?

Although fraud is a criminal offense in most cases, offenders don’t always gel into the stereotypical molds that are commonly reserved for delinquents. Fraudsters are often those who are least expected. The aptitude to commit fraud is not relegated to any specific group of people based on social status, intelligence, race, age or gender. Offenders can look like you and me.  Many are friends, family, rich, poor, parents, grandparents, employed, unemployed, uneducated, PHD’s, janitors, CEO’s, religious and anything in between. Actually some fraudsters are able to commit offenses for extended periods of time because of their backgrounds of perceived trustworthiness and status classification.  But, at some point those who had once proven to be upright seemed to go rouge in order to relieve the burden of unshareable pressure.

The composite sketch of a fraudster

When seeking to identify subjects investigators often turn to composite sketches.  A composite sketch is an illustration used to reconstruct components related to a person of interest. Most sketch artists develop visual renderings of offenders from eyewitness descriptions of facial features.  However, in instances of fraud it may be more beneficial to start a composite sketch based on the elements of Donald Cressey’s fraud triangle.  Those elements are pressure, opportunity and rationalization. When strong evidence doesn’t immediately point to a specific individual, identifiable eyes, mouth, ears, jaw structure, nose and eyebrows can often be discovered by investigating potential participants to see if the following factors exist:

·         Pressure – Is there an element of unshared pressure in existence in an individual’s life? Examples would be financial issues related to gambling, medical expenses, household or other bills.
·         Opportunity – Was an opportunity available to allow an individual to commit fraud offenses? What possible methods could the individual have used to exploit his or her opportunity or position to commit fraud?
·         Rationalization – Most bad actors justify their offenses.  For example:
1.       I’m just borrowing right now and I’ll repay it later.
2.      I deserve this.  After all, I’m underpaid.  They owe me.
3.      My child needs this operation.  I’m doing this for a good cause.
4.      Everybody does it.
Determining likely scenarios of why, how and when can lead you closer to pinpointing exactly who.


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