The Fraud Examiner

All is Not Lost: Fraud Victims, Emotional Stress and the CFE

By Jaime deBlanc-Knowles

July 2015

“It’s devastating. It’s embarrassing. It’s heartbreaking,” said Penny Wasser, who, along with her husband Marv, lost her life savings to a con man. Her husband, remembering his feelings in the aftermath of the fraud, confessed: “You really wish you’d die.”

Richard Shapiro felt similarly shattered when he discovered he’d lost most of his fortune in the Bernie Madoff Ponzi scheme: “I know it sounds crazy, but it’s like when people come back from war — it was just so shocking and so deep and so out-of-the-blue unexpected.”

The depth and intensity of these fraud victims’ emotions highlight a striking reality about white-collar crime: Fraud victims go through much of the same emotional aftermath as victims of violent crime. Although victims of white-collar crime haven’t been physically violated, the psychological violation they experience can leave them significantly shaken.

In the wake of a fraud, victims can experience the following symptoms:

Loss of appetite


Persistent feelings of anxiety

Embarrassment and shame

Ongoing anger and resentment

Depression and even suicidal thoughts

Many studies have examined the financial impact of fraud, but far fewer have examined its emotional impact. “The psychology and sociology of it are never really discussed,” says Stephen Pedneault, CFE, principal of Forensic Accounting Services, LLC, a forensic accounting firm in Glastonbury, Connecticut.

In his practice, Pedneault deals with fraud victims on a daily basis and has become used to the emotional demands of the job. “Someone who is stable today could be very unstable tomorrow,” he says of his clients. In his 26 years as a forensic accountant, he has found it hard to ignore how central emotions are to his profession. “The first time somebody gets angry and looks like they’re going to pick up a chair and throw it at another party, it gets your attention pretty quickly.”

“When I’m not doing this, I’m also driving an ambulance on the weekends,” Pedneault says. “I’ve done that for the last 18 years. And we deal with the same thing [in the office]. Dealing with someone emotional on a medical call and dealing with someone emotional here — it’s not that different.”

“And it’s not taught,” he remarks. “There’s a ton of stuff out there on data analysis … and how do you find fraud and how to put together a good investigation and write a good report. But nothing that talks about how to deal with the emotions and how to deal with clients.”

So what does it take to sensitively and effectively work with highly emotional clients?

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