she had a psychological problem that compelled her to steal from the rich and give to the poor. It was pointed out that she sent much of the stolen funds to charities in the Philippines, where she was from. Perhaps. But she also happened to own expensive cars, homes in New Jersey, California, and Florida, real estate in the Philippines, and an entertainment and production company. So she was pretty charitable with herself.
ALL WORK AND NO PLAY
One of the weird things is, the harder someone works, the better the chance he could be an embezzler. Someone who never takes a vacation, stays late, comes in on weekends - that's the person you have to wonder about. It may not be devotion to the company. It may be devotion to an embezzlement scheme. Often these schemes need daily, or at least weekly, maintenance to keep them from being detected. Any number of scams have come unraveled when the crook got sick and couldn't get into work for several days. He can't very well call up someone else at the office and say, "I'm under the weather, could you do me a favor and take care of covering my embezzlement scheme?"
Most embezzlement cases begin small. Everyone in his or her life has a desperate situation, whether it's a child who's sick, or an investment that went bad, or a gambling debt, and they need money. So they say to themselves, "I can take this ten thousand, and they'll never know it. I'll put it back as soon as I can." But they never put it back, and ten becomes twenty, twenty becomes fifty, and fifty becomes a hundred thousand. Just like that, a small loss has snowballed into a large one. Greed and hunger change human character.
A common technique of embezzlers is known as "lapping" or check-kiting. It works like this: An employee with responsibility for recording payments will pocket a payment for an outstanding bill. He then covers the shortfall by applying part of a larger and later payment by a second customer to the incriminating invoice, thus "lapping" the two accounts. A payment from a third customer will then be used to cover the second account, and on and on. A skillfully done lapping scheme can keep the money flowing undetected for years, as long as the employee stays on top of it and doesn't take time off. I heard about one guy who succeeded in lapping receipts for twenty-nine years, quite possibly a lapping record. He was basically a career lapper. He rarely took a day off, and his scam was only discovered when he no longer came in at all. He had reached retirement age.
A recent study by the Association of Certified Fraud Examiners offers an interesting picture of embezzlers. It found that fraud committed by managers was sixteen times greater than fraud by rank-and-file employees. Fraud losses caused by men were four times those caused by women. People sixty and older committed twenty-eight times the fraud committed by people twenty-five and under. The losses from workers with post-graduate degrees were five times as great as those caused by high school graduates.
When you think about it, this picture starts to make sense. In order to steal a lot of money from a company, you've got to be in a position of some power and trust. Otherwise, you don't have access to the company's assets. So that's likely to be someone who's well-educated and in a
senior position. It's not often going to be some young person on a low rung.
ERODING ETHICS, GROWING ENTITLEMENT
It's obvious to me that one of the key reasons that employee theft has gotten so pervasive is that ethical standards have fallen to appalling lows.
Back in the 1960s, if a company found out that an employee had embezzled some money, say ten thousand or twenty thousand dollars, he would be called into the head office and confronted with the crime. Under questioning, he would eventually break down, apologize profusely, and explain that he stole the money because his kid needed a heart operation. He would promise to pay back every cent.
By 1980, a bold new ethic had taken hold. This time, when an employee was caught stealing company funds, he would again be ushered into the head office. But his response would be completely different. He would launch into a diatribe about how he was entitled to take the money. He actually deserved it, he would insist, because the company paid him poorly, offered a vile