Yesterday Reuters Insider published a video of an interview with Sam Antar, former CFO of fraudulent Crazy Eddie, talking about the efforts of the FBI to profile white collar criminals. The starting point for the interview was this article about the FBI applying techniques which were successful in profiling serial killers to profiling white collar criminals.
It’s a good idea, and it is true that there are some distinctive characteristics that white collar criminals exhibit, especially upper management defrauders. I discuss “People Who Commit Fraud” in my book Essentials of Corporate Fraud, and you can see a few examples on this webpage.
Sam Antar says profiling is a good idea, but that it may not be terribly successful because white collar criminals do a good job of being likable and not bringing negative attention to themselves. The way they get away with long-term financial crimes through social engineering. They know how to get people to like them, and they can exploit the human weaknesses for their own gain.
One excellent point that Sam made is that white collar criminals rely on “implied credibility” to commit their crimes. They work for good companies, they’re respected in their field, they are featured in news stories …. all of these types of things give an impression that they are good and honest. Sam even pointed out that by having him do such interviews, the interviewers are giving him implied credibility and he could exploit that to commit new crimes.
I have certainly been in the path of those who used me to gain credibility for themselves. A certain white collar criminal surrounded himself with professionals who were some of the best in their fields. When he was questioned about his work and his opinions on companies and their red flags of fraud, he was able to say “I work with the best, and they support these conclusions.” Little did these consultants know that he was using their good reputations as a cover for his criminal behavior behind the scenes. When improprieties came to light, I immediately stopped working with this client.
More recently, I worked (briefly!) with a professional with a new-ish practice offering services closely related to mine. I didn’t realize it at the time, but he was using my good reputation to make business connections he never could have gotten on his own.
Why couldn’t he have gotten them? He has absolutely no experience doing what he is selling and no one to learn from. He has a troubling past which raises questions about his credibility. Add in dishonesty in his dealings with me, and it becomes clear why he is seeking out endorsements from other experienced professionals with excellent reputations. Because he has no credibility on his own, he is trying to leverage the reputations of others to secure clients. I recognized this and quickly distanced myself from him.
The lesson I have learned is to be very selective in who you associate with and do business with. You never know when someone is leveraging your good name to cover for their own deficiencies or bad acts. (Of course, professional con-men are difficult to spot because they’re so good at the con!) Remember that almost no one knows who the white collar criminals are until it’s too late. Until they get caught, they appear to be successful business people who are liked by many.