As a keynote speaker on the topic of business ethics and business fraud and a business fraud consultant and book author, I am constantly struck by the “coincidences” surrounding the issues of fraud.
This morning, as I learned the story of Former Miami-Dade police officer Samuel Harris and his theft of COVID-19 funds, I had only a minute before I read that the theft of such funds nationwide is now projected to be more than $200 billion. It is, by every aspect, a national tragedy.
Millions of taxpayer dollars in PPP fraud are still unaccounted and, unfortunately, every fraudster and scam artist, from supposedly above-reproach physicians and educators to petty crooks partook in the “free lunch.” The program was hastily cobbled-together and while many entities were above board in the way in which they applied for and ultimately used the funds, a substantial number of entities saw through the loopholes and took what they could get.
The temptation
One of the many thousands of fraudsters, Samuel Harris, took $285,000 in COVID payment protection funds. The former police officer is facing 20-years in jail after pleading guilty to wire fraud. I have been asked, as a keynote speaker on the topic of business ethics and business fraud and as a business fraud consultant and book author, if I was surprised or shocked. No, I am not.
The way the PPP program was set-up, there was scant oversight and all kinds of possible rationalizations because the expectations were so ethically loose. According to the Department of Justice “Harris falsely claimed in a June 2020 Paycheck Protection Program loan application that his business, Oregen Digital Inc., had 10 employees and a monthly payroll of more than $50,000.”
He immediately obtained a forgivable loan of about $126,000.
He also “Claimed in a Economic Injury Disaster Loan application… Oregen had annual gross revenues of more than $859,000 and 10 employees. Prosecutors said Harris received a $10,000 advance that did not need to be repaid and $149,900 in loan proceeds.”
The former police officer received funds he didn’t deserve, for employees he didn’t have, for a business he didn’t own. This is the classic “ends-means” cycle common to most fraudsters. He liked what the money could do; he saw its power; in fact, he needed its power, but he had no idea how to legitimately run a company or employ people. It was a game.
Around this time
I must admit that as a business ethics speaker (and without breaking confidentialities) I heard a lot of buzz around that time, about how easy it was to put in claims for funds and that the loans were forgivable. I heard stories, second-hand, of people applying for such funds. In those cases, it was an attempt by those people to be “semi-ethical.” That is, they may have needed some funds for specific purposes (for example payroll protection for five employees, but they may have applied for funds for ten). Unethical behavior has a problem with the color gray! It is framed in black and white.
During that period, I wasn’t necessarily surprised that such fraud was taking place, but more so the people and/or their organizations who were committing the fraud, and that leads me to an important point.
Who is the fraudster? What is their profile? Do they have a look? A level of education? Other characteristics?
The answer, obviously, is that anyone has the capacity for fraud and there is “no look” and clearly no other commonalities that are readily identifiable. It is why my keynote talks on business fraud prevention are meant for everyone in an organization. My experience has shown me that the “slick sales person” with the flashy clothes and Rolex, may not be the fraudster at all, it could be the administrative assistant; the quiet, unassuming, non-complaining person who sits at the desk next to the potted banana plant.
Former police officer Harris was undoubtedly tempted because others told him how easy it was to take money from the government. I can’t tell you how many whispered the same nonsense in my ears. Frankly, it changed my opinion of many of them forever. Every choice, of course, has a consequence. It could cost Officer Harris two decades of his life. He will hardly be the last to see where his lack of ethics will lead.
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