Why successful people commit fraud?

nirav modi

It was a weekend; Me and my friends (all above 50) were enjoying our weekly tipple. The beauty of the weekend tipple meets with friends is that it makes us philosophical (of course, age plays a part too….).

We were discussing our retirement plans and do we have enough (read money) to last out our remaining life. It’s funny, on one side, we all want to live longer but on the other side; we get concerned when Doctors say that the life spans have increased….Some rough calculations later, we all felt that we can stop bothering because we all can.

Suddenly, the topic behind us, it became peaceful and quite……one of our friends, looking deep inside his glass, made a comment which triggered a massive conversation….don’t know if he found the inspiration in his glass, in the tipple in his stomach or in his brain….he said:

Have you ever wondered why people who have everything going for them commit fraud?

We were clear enough in our minds, to understand that he was talking about the poster boys of India in the last few years, Mallaya, Choksi, Neerav Modi and the latest to join the list Ms. Kochar….
(A disclaimer here: The charges are not yet proven on all of them but you know where I am going with this)

Don’t you wonder sometimes also that while most of us have just enough to get by (some not even that), but then these people had or have everything going for them…Money, Prestige, respect then why did they did it, WHY?

I got curious and later next day, I decided to do some research and find out about it. What I saw was interesting and boring at same time but in any case you may like to see the summary of what various researches have shown as to why people who are rich, powerful, famous commit fraud. So read on and get surprised…..

⦁ They do simply because they Can
It is all about the ego. All the respect, high social standings, educated background, money, power Is not enough for them. They want to feel more ahead of their game, like they are somehow better than others. Typically, they enjoy bending other people to their will and have no problem using their specialized skills and knowledge to get what they want.

⦁ It Is Not Really That Bad
Some well-intended fraudsters (pun-intended) believe that they can somehow repay the money before their deceit would be discovered. Because they don’t really mean to take the money, they rationalize their behaviour because they believe that it is for a good purpose.

⦁ I Have to Do It
Some people really do think that they are acting in a legitimate manner. Some of them even believe that their ‘brave’ actions are what are needed for their organization’s survival. They somehow view themselves as martyrs or heroes willing to do the dirty work to save everyone else. Former Enron chief financial officer Andrew Fastow told that if he didn’t do what he did, someone else will; that’s why he felt the need to go ahead and do what he thinks needs to be done.

⦁ Opportunity
Nothing would happen if not presented with an opportunity. In fact, normally honest individuals can be seduced to commit fraud if there is an opportunity. Such people take advantage of weak internal controls, low likelihood of detection, poor security, and lack of clear policy enforcement to abuse or use their position of trust to get some personal gain. All it takes is one weak moment and opportunity!

⦁ Motivation or Incentive
Greed and need are the most common motivations for committing fraud. The temptation becomes too great when an opportunity presents itself as well.

⦁ Rationalization or Attitude
Yes, even ‘nice’ people can commit fraud! It all boils down to what they tell themselves to be able to excuse such as act as ‘acceptable’.

⦁ They deserve more
They feel that the world has not given them enough. Since they deserve more, and the world will not give them, they take it….

Now, let me connect some dots for you, when I started this write up, I had wondered (like most of us do) as follows:

Don’t you wonder sometimes also that while most of us have just enough to get by (some not even that), but then these big people have everything going for them…Money, Prestige, respect then why did they did it, WHY?

Have you got the answer, it is for none of the reasons we thought of. It’s not about money, power or prestige…

It boils down to this, give a very intelligent, capable individual who is sitting in the right place at the right time….and don’t have enough and proper controls and even if you have them you don’t exercise them….fraud can and WILL happen.

In fact, you can apply the same above to any profession, same has been found to be true for any profession (I won’t name them but I am sure you all have experienced them in your life). It’s just that because the amount is so large and visible that big people become media’s darlings…(read TRP enhancers).

My point, do talk about it, do be concerned about it, BUT please remember there are lots of people amongst us who will do the same if they had the brains, capability and opportunity….

Are you shocked? I am…


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