Movies portray embezzlement as a big-money, high-flying romp. Fact is decidedly different than fiction––and surprisingly common! Jason dives into the realities of pink-collar crime with Kelly Paxton, a workplace dishonesty expert, fraud educator, and host of the Fraudish podcast. The pair offer case studies (including Jason’s personal experience) that expose the motives behind the misconduct, company culture’s role in fostering opportunities for theft, and how small withdrawals add up to big financial headaches. Kelly also provides straightforward steps to keep your company safe from embezzlement schemes.
“I’m the Certified Fraud Examiner––we don’t identify with Bernie Madoff [or] Enron. We identify with the trucking company that gets ripped off and can’t give raises, or God forbid, shuts down,” says Kelly. For the record, she’s also got the professional cred to take down those big-name bad guys. Kelly spent time as a special agent for US Customs And Border Protection before starting her investigative service, where she focuses her canny attention on financial crimes committed on Main Street, USA.
Don’t think you or your company could fall victim to embezzlement? Think again. “I don’t ever want to victim-shame,” Kelly insists. Instead, she informs, using a composite profile named Gladys to describe the most likely culprit of pink-collar crime. Gladys is often a female employee with access to company financial information (bank accounts, A/R and A/P reporting, vendor details, etc). But there’s one embarrassing aspect of embezzlement most folks hate to admit. “You probably were friends with Gladys. You probably liked her,” says Kelly. “Money is replaceable. You can sell more widgets. But that breach of trust is really hurtful.”
While pink-collar crimes do tend to attract more female perpetrators, Kelly cautions folks to check their gender bias. “It’s position, not gender.” Embezzlement is, first and foremost, a crime of opportunity. As such, she also urges owners and CFOs to get out of the C-suite and into the financial weeds by instituting randomized checks and balances like mixing up the auditing strategy or having a copy of the bank statements sent to their email addresses. “It’s not rocket science to stop this [or] prevent it,” Kelly laughs, “But it takes internal controls.”
MENTIONED IN THIS EPISODE
The Collins Street Bakery Embezzlement Scandal
QUOTES
“When you’re a victim of embezzlement, your world is messed up.”
“Any business, any geography, can be the victim of embezzlement.”
“Trust but verify. We need to trust but verify.”
“We have the fraud triangle, which is opportunity, pressure, and rationalization. The easiest thing to control for is opportunity.”
“People are gonna think that AI is gonna solve everything, but it isn’t. Again, you have to pay attention to your business.”
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Embezzlement: How To Detect And Investigate Pink Collar Crime
