In The News

What drives an honest person to do something despicable? To commit acts a trusted person knows is illegal, immoral, and unethical?

A criminologist named Donald Cressy researched that issue by interviewing 200 people who were in prison for embezzlement. Cressy focused on embezzlers who had been highly trusted and were considered to be honest; he ignored those who took a job with the intent to steal.

Cressy determined that there are three elements that drive honest people to steal:

1. A financial need they can’t or won’t share with anyone,
2. The perception they can steal with little risk of being caught, and
3. A way to rationalize an act they know is wrong.

If someone has a financial problem and the person sees a risk free opportunity to resolve it, it’s easy to find a way to rationalize it. The would-be fraudster “borrows” the money, or takes it to even the score because he or she has been treated unfairly.

I was reminded of Cressy’s theory when I interviewed several Idaho women in prison for embezzlement. Two agreed to talk to me about their crimes. One pleaded guilty to stealing over $100,000 from her employer; the other pleaded to smaller thefts from two employers. Both women were in their mid-thirties, college educated, bright and articulate.

When I asked, “Why?” their responses were nearly identical. “I was depressed and it made me feel better.” “It gave me a kind of high when I spent money, but the high didn’t last long so I had to keep stealing.”

Is there such a thing as an addiction to shopping as a means to ease depression? Possibly. One of the embezzlers described it this way:

It’s a high when you have that money in your hands and you go and spend it. And it really doesn’t matter what it is, because I would put it in the back of my closet and leave it. But it’s that rush of having that cash and then getting something. And the adrenaline just pumps through you and then it’s over and you’re better for a minute until you have to increase it because the little high doesn’t work anymore. 

It was the act of buying something they couldn’t afford that gave them the “rush” that drove them to steal again and again. They brushed aside questions from curious, concerned friends and family by making up stories about retirement funds from former employers, birthday gifts, and lottery winnings.

Business owners don’t know what’s going on in their employees’ personal lives and the employees are not about to offer information about their financial pressures. Depressed or not, they will come to work with a smile and a nod, and abuse their bosses’ trust to ease their inner pain.

What can business owners do about it? Here are some tips:

As much as you would like to treat your employees as family, they are not your family. You can be fair, generous and friendly, but you’re the boss and it’s your responsibility to hold people accountable.

Develop transparency in your financial flows, check the bank statement, and spot check detailed financial records. If you don’t have time to do so, have a forensic accountant do it for you.

Independent unscheduled reviews of accounting records are excellent deterrents. Your accounting staff know someone who can’t easily be fooled will take an in depth look at their work; they don’t know when the accountant is coming or what records will be reviewed, and this gives them an incentive to keep accurate records and find a way other than stealing to ease their financial pressures.

Trust. But verify.