Management and Consulting Services

Perps on the Podium

8/15/2011

Fraud is a very active crime.

It includes premeditation, planning, collusion, orchestration, mindful execution, “book-cooking.” All of these require conscious thought, motive, choices and actions by the perpetrators.  The “perps” choose to lie, cheat, steal, hide, misrepresent, obstruct justice, obfuscate the truth, story-tell and exaggerate.  At times fraud does not stop with the initial crime.

The victims are the companies, institutions and employees who absorb the direct costs—be those monetary losses, diminished marketplace reputation, professional impacts, “clean-up” requirements, and/or personal sacrifices.

From my experiences, I believe that what we have “to do” is to teach more purposefully in our homes, schools, universities and business organizations.  Aristotle had it right, we learn by imitation and practice; “we become just by doing just acts, temperate by doing temperate acts, brave by doing brave acts.”  You cannot be ethical and do unethical deeds.  Educating young people how to effectively evaluate, interpret, prevent and detect fraud must stem from active, ethical principles which are to be modeled, practiced and executed consistently, all with the expectation of “doing the right thing.”

Let’s keep this simple: the “environment” does not make anyone do fraud.  The “perps” made their choices…and they got caught.  For a “perp” to finish his jail sentence and then bring concocted stories—books, articles, presentations, etc., that provide no lesson other than the message, “I committed fraud, so don’t do what I did…but the environment made me do it,” are useless and value-less—and simply defy practical wisdom and logic.  Of particular egregiousness is the attitude that some professors of well-known colleges and universities publicly espouse, and how they rationalize bringing in perps to speak in their classrooms, or with administrators of accounting and other organizations who (many times) pay perps to present to their audiences.  The rationalization has been framed up to me as, “well Jim, circumstances can occur where ANYONE CAN BE FORCED to commit fraud.”  Such statements are vocalized in the classroom, and are totally false.

What lessons-learned can we really gain from fraudsters?  If they were so smart, why’d they get caught?

From my vantage point, it is clear that character-laden people thrive in American business.  More examples of fraud are being exposed because principled managers are doing their jobs, which include ferreting out the “fraudsters.”  Said another way, the “good guys simply outnumber the bad.”  Unfortunately, you just do not hear from the media about the many “fraud-busting” successes in business, as “the bad guys” continue to strangely appeal to a mistaken but empathetic press with their fetchingly-glamorous stories.  Furthermore, because of little (if ANY) due diligence being performed, some of the “perps” write their books and end up persuading these professors and ethics organizations to  unwittingly grant them the podium to audiences and classrooms…to air their bad behavior.  And, as I have seen, some of those “perps” get paid to do it, thereby continuing their fraud, just in a different form!

Talk about a misguided version of “American Idol!”