Best defense is a good offense

Fraud is happening all the time and at every organization. In our experience, many organizations think they’re immune to fraud. They might say, “We’ve hired good people and have very strong internal controls, so fraud isn’t a problem here.” It’s probably not news to you, but the fraud problem is normally bigger than organizations think. One organization we worked with found this out the hard way. A well-respected senior leader had been caught embezzling in excess of $1 million over more than 10 years. It started with his perceived need for extra money to pay bills that were piling up, but once he started, he couldn’t stop. Through the investigation, the organization found that many employees had seen behavioral red flags — like living beyond his means — for years but hadn’t reported it because they believed it was impossible that this well-respected leader was doing anything nefarious. This example and many others like it showcase the bottom line: Good people do bad things, and controls fail.