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CORPORATE FRAUD HANDBOOK

These methods he generalized as “rationalizations.” In his studies, Cressey discovered that “in cases of trust violation encountered, significant rationalizations were always present before the criminal act took place, or at least at the time it took place, and, in fact, after the act had taken place the rationalization often was abandoned.”22 That is, of course, because of the nature of us all: The first time we do something contrary to our morals, it bothers us. As we repeat the act, it becomes easier. One hallmark of occupa- tional fraud and abuse offenders is that once the line is crossed, the illegal acts become more or less continuous.

One of the simplest ways to justify unacceptable conduct and avoid guilt feelings is to invent a good reason for embezzling—one sanctioned in the social group as a greater good. Thus, the trust violator’s self-image, should she be discovered, must be explain- able to herself and others around her.

Offender Types For further analysis, Cressey divided the subjects into three groups:

  • 1.

    Independent businessmen

  • 2.

    Long-term violators

  • 3.

    Absconders

He discovered that each group had its own types of rationalizations.

INDEPENDENT BUSINESSMEN Businessmen, for example, used one of two common excuses: (1) They were “borrow- ing” the money that they converted, or (2) the funds entrusted to them were really theirs—you cannot steal from yourself. Cressey found the “borrowing” rationalization was the most frequently used. Many independent businessmen also expressed the belief that their practices were the rule of the day for other businesses. Nearly universally, the business owners felt their illegal actions were predicated by an “unusual situation,” which Cressey perceived to be in reality an unsharable financial problem.

LONG-TERM VIOLATORS The long-term violators Cressey studied also generally preferred the “borrowing” ra- tionalization. Other rationalizations of long-term violators were described, too:

  • 1.

    They were embezzling to keep their families from shame, disgrace, or poverty.

  • 2.

    Theirs was a case of “necessity”; their employers were cheating them financially.

  • 3.

    Their employers were dishonest toward others and deserved to be fleeced.

Some even pointed out that it was more difficult to return the funds than to steal them in the first place, and claimed they did not pay back their “borrowings” out of fear of detection. A few in the study actually kept track of their thefts, but most did so only at first. Later, as the embezzlements escalate, it is assumed that offenders would

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