Dishonor among thieves

If you believe Diana L. Farmer-Forston, since her early childhood life has been a struggle. But in many respects, her struggles are just beginning. Diana was recently sentenced to two years in prison for embezzling $567,000 from her employer, Bennett and Zydron, a Virginia Beach law firm. In an interesting twist, Diana ended up being scammed out of $300,000 of the fraud proceeds when she agreed to lend a co-worker money to cover expenses associated with their cancer treatment. Allegedly, Diana made her coworker sign a promissory note with a monthly interest rate of 4.5%. Thankfully, the coworker is cancer free. In fact, they never had cancer in the first place.

Hired by the law firm in 2005, Diana didn’t launch her fraud career until 2007. What happened between 2005 and 2007? Did Diana’s struggles from her childhood come back to haunt her? We do know from court filings that her husband of 25 years announced in 1999 that he had decided to undergo a sex change operation. Their marriage ended shortly thereafter. That revelation surely had an impact on Diana, but did it force her to commit fraud seven years later?

Here’s a hint: In many cases, you’ll never figured our exactly what drove an employee to commit fraud.

In Diana’s case, it would likely require extensive therapy to truly undercover the root cause. Diana’s attorney claims that she has struggled with depression and other undisclosed mental health issues since her childhood. He also states that Diana was also around physical, sexual and emotional abuse while growing up. She has apparently had a very difficult journey to date, but her struggles started long before she joined the law firm.

As an employer, you have to focus on what you can control. Certainly, before hiring a new employee, perform background checks, conduct a rigorous interview process and call references. Whether the employee experienced abuse as Diana apparently did it is legally, ethically and morally out of scope during the interview process. Remember, you can’t control what has already happened…

You can control what happens once the employee sets foot in the office. Once they join the organization, make sure that you don’t send messages that help the new employee rationalize that committing fraud is “ok”. Fraud prevention essentially begins during the interview process and continues throughout the employee’s tenure. Assuming that you have not hired an employee that is already an accomplished fraudster, your company has ample opportunity to prevent from fraud happening. I’ll detail many of the tactics you can use to build a culture that prevents fraud in my next post. This post hopefully lays the groundwork.

Bottom line: You can prevent fraud if you focus on what you can directly control. The employee already has ‘baggage’ that they bring to the table. You can’t control how much, or what it contains. You can control how your organization is positioned to prevent and detect fraud. There are no “fool-proof” approaches, but you have far more power than you realize

Learn more about Diana’s case here

Need a writer that understands fraud? When you hire me to write an article, blog post, newsletter or white paper you get an accomplished writer that is also an expert in fraud.

paul@mccormackwrites.com


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About Paul McCormack
I have over 20 years of experience in corporate fraud and intellectual theft prevention, detection and investigation. Unlike many fraud experts, I have both industry and professional services experience. To date, I have conducted over 800 interrogations of fraud suspects including numerous senior corporate executives. As a freelance writer, I have written over 1,000 articles on a broad range of topics. My areas of expertise include: • Asset Misappropriation • Big Data • Bribery, Corruption, and Collusion • Check, Wire, ACH, and Credit Card Fraud • Consumer Fraud • Corporate Security • Cybersecurity • Data privacy (Europe, Brazil, Russia, India, and China) • Drug Trafficking • Embezzlement • Employee Fraud • Executive Protection • Fintech • Financial Statement Fraud • FCPA • Healthcare fraud • Identity Theft • Intellectual Property Theft • Internal Audit • Interrogation Tactics • Loss Prevention • Mobile Fraud • Money Laundering • Operational Excellence • Organized Crime • Payments Fraud • PCI Compliance • Retail Fraud • Risk Management • Terrorism and Counterterrorism • UK Bribery Act • Workplace Violence

3 Responses to Dishonor among thieves

  1. Robert W. Randolph says:

    Right on target! I have long advised management that pre-employment screening only tells you somewhat of what has happened before. Once hired, it is management’s duty to maintain solid operational controls, audits, and do not OVER TRUST. I have lost count of how many law firms have come to me, when I was in charge of investigations at major banks, and reported that a key employee had embezzled from them. Lawyers should know that you never over trust. All they have to remember is my acronym NORA….Need + Opportunity+ Rationalization = Attempt. Out of this formula we can really only control the Opportunity. People’s needs and rationalizations frequently change. We can have excellent Human Resources benefits and quality management to try and control the Need and the Rationalization but really must look to good controls to reduce the opportunity.

  2. Thanks Robert! Love the acronym! I plan to use it in the future… with credit of course…

    I completely agree with your comment regarding controls and the opportunity to commit fraud. From my experience, large companies most often ignore or fail to oversee controls correctly, then act surprised when fraud happens.

    Thanks for reading and commenting.

  3. Pingback: $2.7 million embezzled from Arizona National Guard « Fraud Happens

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