Wanted: Fraudsters

The Association of Certified Fraud Examiners (ACFE) has been interviewing convicted fraudsters since its inception. Our founder, Dr. Joseph T. Wells, CFE, CPA, has always believed that to catch criminals, you must understand how they think and act. In fact, the first fraudster interview I ever saw was one that Dr. Wells conducted with Barry Minkow, who was in prison at the time.

Minkow committed one of the first high-profile financial statement frauds back in 1987. In 1982, when he was only 16, he started the ZZZZ Best carpet cleaning company. He took the company public in 1986, but rather than earning money by cleaning carpets, he found it easier to make money by lying to his investors. Ultimately, his investors lost more than $100 million. He was convicted on 57 counts of fraud and served more than seven years in prison.

During his interview with Dr. Wells, Minkow spoke candidly about how addicted he became to the money and the extravagant lifestyle. While I watched the interview, two things stood out to me. The first was what a likable guy he seemed to be. He was intelligent, handsome and charming. The second thing was how little empathy he seemed to have for his victims. He said he was sorry, but those words didn’t ring true to me.

I’ve conducted similar interviews over the years with convicted fraudsters. When I interview them, I’m listening for insights into why they first started contemplating fraud, how they were able to perpetrate it and what they told themselves to justify their crimes. If that sounds familiar, it should. These items — motivation, pressure and rationalization — make up Dr. Donald Cressey’s famous Fraud Triangle.

To catch fraudsters and get them to confess once they’re caught, it helps enormously to understand their motivations and rationalizations for committing fraud. To prevent fraud, it’s essential to understand where the vulnerabilities are that allow fraud to happen. Where was the breakdown in internal controls, technology and oversight? Convicted fraudsters can provide us with those answers, which is why the ACFE interviews them. We’re currently on the lookout for new fraudsters we can learn from.

If you’ve worked an interesting case and you think the perpetrator might be willing to talk, please let me know. There are two ways you can do this. Provide us with a name, a short description of the fraud and any contact information you have, and we can contact the individual. Just send the information to me at President@ACFE.com. Alternatively, if you’re in contact with the fraudster, you may direct them to fill out our online form at ACFE.com/call-for-fraudsters.

Please note that the ACFE doesn’t pay these individuals for interviews. If there’s any travel required for them to participate in the interview or to speak at one of our events, we’ll pay for or reimburse their travel expenses. But we don’t pay them to speak with us.

As you know, people commit fraud. It’s an intentional act. Interviewing people who crossed that line and decided to steal from their employers, lie to their investors or cheat their customers helps us gain valuable information that we can use to catch the next batch of bad actors.

Thank you for your help!

John D. Gill, J.D., CFE, is president of the ACFE. Contact him at President@ACFE.com.