From time to time, it’s helpful to take a step back from day-to-day investigative work and consider how some of the more significant criminology theories should impact decision-making. One of the more established theories in fraud investigations is the Fraud Triangle. According to this theory, there are three things which must be present to precipitate a fraud: Pressure, Perceived Opportunity, and Rationalization.
First, a person must have a pressure they need to solve. This pressure is often, but not always, financial. It could also be a time constraint, or a health need.
Second, they need to believe that they have an opportunity – an illegal act that can solve their problem.
Third, they have to find a way to rationalize their act, possibly admitting it’s illegal in their head but refusing to believe it’s wrong.
If one of these three elements aren’t present, it’s difficult to commit the fraud. Since the one that is most easily controlled by an agency is the “opportunity” element, controls are put into place to ensure that people can’t find an opportunity to defraud the taxpayer – or that if they do it will be immediately obvious and the fraud can be corrected quickly.
While removing the opportunity for fraud is vital, rationalization can also be addressed. Agencies can educate employees before they consider fraud – especially on the most common rationalization, and why it never works out in the end.
I’m not stealing the money – I’m just borrowing it.
First and foremost, it’s important for agencies to promote an ethical and fair workplace – one where employees feel like breaking such an obvious law as stealing would make them a clear outlier, rather than ‘just another employee taking advantage of the system’. Rationalization is much easier if employees believe that everyone around them is also doing the same thing.
It’s also helpful to remind government employees that their employer is ultimately the taxpayer. This means that, when “borrowing” money from the agency, they’re actually stealing from many people who are far worse off than themselves. In addition to having their money stolen, those citizens will receive fewer services from that employee’s agency.
Finally, educate employees on the elements of fraud, and let them know that the agency has erected safeguards to prevent its money being taken by anyone. Above all, warn them not to fall into the trap of rationalizing their own fraud: borrowing without permission is not borrowing, it is theft, plain and simple. The more stridently this view is held by everyone within an organization, the more difficult this rationalization will be.
To learn more about CMTS, and how it can help your agency prevent fraud, waste and abuse, call us at (919) 600-5102 or email email@example.com.