Fraud's Feeding Frenzy

• Published in: Executive Roadmap to Fraud Prevention and Internal Control pp. 1 - 22
• Main Authors: Bartow, Joel T, Biegelman, Martin T
• Format: Book Chapter
• Language: English
• Published: United States Wiley 2012; John Wiley & Sons, Inc
• Subjects: Chutzpah Defense; corporate fraud; Enforcement agents; feeding frenzy; FINANCE & ACCOUNTING; rogue employees
• ISBN: 9781118004586; 1118004582
• DOI: 10.1002/9781119202356.ch1

This chapter illustrates that the enactment of strong laws and the empowerment of enforcement agents are helpful but certainly do not guarantee an end to fraud. In the first decade of the century, there has been ongoing “feeding frenzy” of corporate fraud. Respected and trusted corporate executives have been revealed to be morally corrupt fraudsters. They became rogue employees and were too busy stealing from the corporate “piggy bank” to think of the consequences for their employees, shareholders, customers, or themselves. The government reacted strongly in response to the public outcry after billions of dollars in investments evaporated. The President promoted the need for corporate responsibility and promised to arrest any corporate executive with a hand in the corporate coffers. The significant corporate frauds and resulting prosecutions of responsible corporate executives have provided a new defense posture appropriately named the “Chutzpah Defense.” Investigators beginning a career or assignment in fraud detection are commonly told never to worry about being out of a job because investigating fraud provides job security. The feeding frenzy of fraud will not abate unless fraud prevention is embraced and instituted at all levels of a company, especially in the executive suite.