UNITED STATES
The Observer
Raymond Ramirez | Wednesday, March 23, 2016
Investigating theft and other irregularities in corporations often starts with an analytical device known as the fraud triangle. This method examines three classic elements of criminal activity: opportunity, pressure/motivation and rationalization. Corporations typically claim that opportunity is the element over which they have the most control. Accordingly, companies focus on limiting opportunities for crime with measures like heightened security.
Businesses often assume pressure and motivation are beyond their control and characterize financial pressures, such as high medical bills, as personal matters. Individual rationalizations may include a bonus that was expected but not received or payback for a poor work environment. In fact, the focus on aggressive short-term earnings targets may create the very pressure that could drive people to consider criminal options.
Companies that operate under realistic market conditions, emphasizing sustainable growth and employee well-being, reduce pressures that skew behavior towards crime. Competent and trusted companies apply lessons learned to detect illegal behaviors, shut them down in their early stages and implement additional controls and structural changes to limit further damage.
The pedophile priest scandals, as detailed in the Boston Globe’s “Spotlight” investigation, and the recent grand jury report on the Diocese of Altoona-Johnstown, illustrate extreme examples of the fraud triangle run amok. In the Altoona-Johnstown cases, more than 50 priests and other Church employees molested hundreds of children over four decades in the central Pennsylvania diocese. In many cases, their superiors knew of the abuses but did not remove the priests or notify law enforcement.
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