The Fraud Examiner

The Psychology and Motivations of White-Collar Criminals
 

Michael Greelis, PhD, LPC, LMFT, and Michael Pocalyko, CFE, MPA, MBA, PI, CA

 

Why do people commit financial fraud against the businesses that employ them? Do they lack the resources to fund their lifestyles? Are they under pressure to meet revenue targets that result in executive bonuses? Is there an underlying hostility toward the corporation or the government entity? The motivations giving rise to these questions may be present in a major portion of fraud; however, all of them fail to address the underlying mechanism that enables almost all white-collar crime.

 

White-collar crime as we understand it today is a type of fraud that is materially different from organizational fraud. Both types of fraud are in the same dominion — they take place in the office environment and involve schemes manipulating accounting and finance systems. However, white-collar crime can often differ in the driving motivations of its perpetrators, the character of these fraudsters, the entitlement that they inherently exhibit and in the underlying psychopathology of the white-collar criminal. When present, all of these characteristics contrast with the opportunistic, rationalizing and often guilt-ridden-when-caught fraudsters of “regular” occupational fraud.

 

The need for a new underlying theory to identify fraudsters predisposed to white-collar crime

 

Are there fundamental underlying traits of personality and character that provide additional methods of identifying white-collar criminals? We propose that two psychiatric diagnoses are frequently present in white-collar criminals and make those individuals highly vulnerable to the pressure, opportunity and rationalization described by Cressey. In addition to self-generated “pressure,” we propose that those driven by narcissistic and antisocial personality disorders engage in white-collar crime without any real or perceived financial pressure at all. The empirically based system found in the American Psychiatric Association’s Diagnostic and Statistical Manual, Fifth Edition (DSM-5) allows us to draw a bright line around the types of white-collar criminals who are most likely to commit fraud.



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