Who commits business fraud? It is a question I am asked all of the time as an experienced business ethics keynote speaker, business ethics consultant and business ethics book author. Unfortunately, the seemingly simple question has “one-thousand” answers.
The person who may be committing fraud in your organization has no race, religion, gender, personality type or age. The fraudster has created themself or the company has helped to create their opportunity. The fraudster may have been born in the most rural or rural areas or in the heart of a major city.
Thinking about Baytown
Baytown, Texas is a diverse, middle-class city, neither rural nor a metropolis of about 83,000 people. It is a commercial city, an oil refining city and an All-American city. It is where Judy M. Green is from, and that is where part of today’s business ethics story begins.
Judy Green was employed by a successful building and maintenance supply business. The business might have been even more successful, had not account manager Judy M. Green been committing wire fraud for the past 10+ years. The “trusted employee” stole in excess of $3 million while seemingly, no one noticed.
According to the U.S. Attorney’s office:
“As part of the [fraud] scheme, she submitted fraudulent invoices to induce payment from the company and pocketed the funds for personal expenses. Ultimately, the scheme was uncovered when one of the business owners noticed a large payment to an unknown credit card company in the summer of 2022. An audit revealed the fraud had been ongoing since 2012.”
The former account manager is scheduled for sentencing in August 2023. She is facing fines of up to $250,000 and 20 years in prison.
For close to a decade, Judy Green went about her business, largely unnoticed. She was as prominent for the potted plants and the old desks. For a while, she undoubtedly lived well, skimming off just enough. It worked for her, and who knows how much longer she might have gotten away with it, had not the business owners finally discovered an errant credit card payment.
Behind the potted plant
Behind that “potted plant,” or wherever the fraud took place, the fact that no one noticed, no one tracked expenses and no one cared enough to provide oversite is not just the fraudster’s fault. As a business ethics keynote speaker, business ethics consultant and ethics book author, this particular scandal was enabled by a system where there was disinterest and, sorry to say, a good measure of personal laziness. There were no expectations and a daily lack of engagement and internal audit.
It goes without saying that Judy M. Green saw opportunity and the opportunity she acted upon was based on greed. Once she got away with it, the first or second time, it was pretty easy sledding. As no one noticed, she realized that she could keep skimming. The interesting question is: who is more at fault? Is it the fraudster or the management who provided neither guidance nor supervision. No doubt, Judy Green was the culprit but the company provided a great deal of enabling.
None of this ultimately could have taken place without a sense of rationalization. How did Green rationalize her theft? Was it a sense of entitlement? Anger at someone in management? Jealousy at co-workers? It could be all those or any of those, but business ethics ultimately demands that there must be consequences to the choice to embezzle millions of dollars. She will soon face her choices in court. Perhaps she will wave good-bye to the potted plants.
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