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Who's more susceptible to fraud?



We know how the Fraud Triangle helps explain the conditions that lead people to commit fraud. But what about the factors that could cause some to be predisposed to fraud? Here are some practical principles to consider when you’re working with fraud victims.

In the mid-’90s, when I was working for a global high-tech firm, I received a call from a fast-talking stockbroker with an unmistakable Brooklyn accent representing a company I never heard of — Stratton Oakmont. “Are you looking for a unique investment opportunity?” he asked. I told him I already had a financial advisor, but he was persistent to the point of being irritating. He schmoozed me with questions that led me down a path where I found myself agreeing with his assertions.

He called back every day for almost a week and left messages on my office phone, such as, “Someone in your position probably has a couple hundred thousand dollars just waiting for the right investment.” I laughed out loud because I had nowhere near that kind of nest egg, so I finally told him not to contact me further because I had no interest in his penny-stock opportunities.

Two years later, the feds broke up Stratton Oakmont, a Long Island-based boiler-room trading operation. A rep from the firm was the pest who kept calling me. Its founder, Jordan Belfort, was later indicted on money laundering and securities fraud charges. His high-pressure operation led to investor losses of nearly $200 million. The Leonardo DiCaprio movie, “The Wolf of Wall Street,” was based on Belfort’s outrageous escapades and others who worked at Stratton Oakmont. (See 10 Exciting Details from Wall Street’s Next Huge Film: The Wolf of Wall Street, by Julia La Roche and Linette Lopez, Business Insider, April 23, 2012.)

Was it Jordan Belfort who called me from the firm? Likely not, but every time I recall the incident, I breathe a sigh of relief that I wasn’t talked into parting with even a fraction of our investment capital. I thought I was too smart for that kind of scam.



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