'Meta-model of fraud'

The Fraud Triangle is tried and true, but we might need more to understand our cases. The authors describe a “meta-model of fraud” that combines the “why-based” Fraud Triangle with the “what-based” Triangle of Fraud Action to better explain fraud cases. We might never know exactly why fraudsters commit crimes, but we can always gather facts and evidence to help prevent and deter fraud.

Meridian Fleetware Inc., a multinational private organization headquartered in Warrington, Pennsylvania, began operations in 2001. It now has more than 2,000 employees, with offices in 20 cities in the U.S. and 10 countries around the world.

In response to declining sales, Meridian’s vice president of sales and marketing, Jake, reviews the forecast. Over a series of meetings, he implements a plan to enhance revenue, which includes providing the sales team with rich incentives. (Meridian Fleetware is a fictitious company name, and all players’ names are changed.)

Jake, during an all-hands-on-deck meeting with the global sales team, describes a new go-to-market strategy plus a new sales incentive called “Bull Rush.” After the meeting, he sends the sales team an email that outlines the strategy with a closing quote he modified from the 2000 movie, “Boiler Room”:

“There is no such thing as a no-sale call. A sale is made on every call you make. Either you sell the client our products and services or he sells you a reason he can’t. Either way, a sale is made; the only question is who is gonna close? You or him?”

The compliance officer, Susan, gets wind of the call and reads Jake’s email. She has a face-to-face meeting with Jake and reminds him about the risks of aggressive sales tactics. Susan also reviews Meridian Fleetware’s policies on bribery, revenue and expenses recognition, and the importance of  collection of  payments from customers after sales are made.