we have to put his response in context: Back to the question asked, “What was going on in 2003 that would cause you to do something like this?” We know “what was going on” as articulated by Alex, the pressure/motive of:
Stock losses
Fear of telling clients, lest they withdraw their money
Fear of telling his partner
Loss of position
Now, as to regarding the “cause,” i.e., rationalization for sending out false reports, Alex responded:
Bad breakup with a girlfriend resulting in:
Drinking heavily
Smoking marijuana
Engaging in sexual activity hidden from his parents.
The juxtaposition of pressure/motive with rationalization forms an “If–Then” logic operation. Keep in mind that it is an idiosyncratic logic operation. Consequently, in Alex’s world, as he articulates it and we endeavor to understand it:
IF someone is under pressure because of stock trading losses and fear of clients, partner and loss of position,
AND subsequently there is a breakup in a relationship leading to drinking heavily, smoking marijuana and sexual activity unknown to parents,
THEN the fraud becomes the optimal choice.
It is not necessary to agree with Alex’s articulation of his reality. It is only necessary to understand that it is Alex’s articulation of how things “operate” in his world.
Comparing Alex and the fraud triangle to the classic fire triangle (fuel, heat and oxygen), we find that the stock trading opportunity constituted the fuel, his articulated pressure/motive was the heat and his rationalization supplied the oxygen. Figuratively speaking, there was, at this point, fire on the water.
THOUGHTS, COMMENTS AND ANALYSIS
What are your impressions, to this point, with regard to this circumstance?
Exactly what do you know?
What is it that you know that you don’t know?
What questions would you ask in order to know?
What steps would you take in order to know?
POINTS TO PONDER
At another point in Alex’s testimony we read the following possible motivation for falsifying the account statements:
Q. And what were you going to do with regard to account statements after this meeting for clients?
A. There would be nothing different than what had previously been done.
Q. Which was what?
A. Which was showing them rates of return above two and a half percent per quarter.
Q. And the two and a half percent was a significant number why?
A. That was significant because that was the figure that was in the membership application that clients signed, when they came in to become clients, stating that no fees would be taken for any performance figure below that.
What does the sentence “There would be nothing different than what had previously been done” bring to mind?
What does the use of the word “ taken ”found in “no fees would be taken for any performance figure below that” bring to mind?
Does falsifying the two and a half percent return to clients illustrate pressure/motive, opportunity, rationalization or something else?
What questions would you pose to Alex at this point?
CONTENT – CONTEXT APPLICATION
A district supervisor with the Division of Motor Vehicle License and Theft Bureau was charged with stealing property and misconduct in office. The warrant indicated the supervisor had bought stolen property—three stolen lawn mowers—that were part of an ongoing investigation. The warrant also stated he subsequently concealed the evidence and hindered the investigation into those who were involved in the theft.
In regard to an individual holding a supervisory position in an investigative agency:
Would the purchase of three stolen lawn mowers (part of an ongoing investigation) be a function of pressure/motive, rationalization or opportunity?
Would concealing the evidence and hindering the investigation be a function of either of the same three fraud triangle elements?
Why would someone functioning within an organization that consistently discovers and prosecutes violators of the law believe that they
Stock losses
Fear of telling clients, lest they withdraw their money
Fear of telling his partner
Loss of position
Now, as to regarding the “cause,” i.e., rationalization for sending out false reports, Alex responded:
Bad breakup with a girlfriend resulting in:
Drinking heavily
Smoking marijuana
Engaging in sexual activity hidden from his parents.
The juxtaposition of pressure/motive with rationalization forms an “If–Then” logic operation. Keep in mind that it is an idiosyncratic logic operation. Consequently, in Alex’s world, as he articulates it and we endeavor to understand it:
IF someone is under pressure because of stock trading losses and fear of clients, partner and loss of position,
AND subsequently there is a breakup in a relationship leading to drinking heavily, smoking marijuana and sexual activity unknown to parents,
THEN the fraud becomes the optimal choice.
It is not necessary to agree with Alex’s articulation of his reality. It is only necessary to understand that it is Alex’s articulation of how things “operate” in his world.
Comparing Alex and the fraud triangle to the classic fire triangle (fuel, heat and oxygen), we find that the stock trading opportunity constituted the fuel, his articulated pressure/motive was the heat and his rationalization supplied the oxygen. Figuratively speaking, there was, at this point, fire on the water.
THOUGHTS, COMMENTS AND ANALYSIS
What are your impressions, to this point, with regard to this circumstance?
Exactly what do you know?
What is it that you know that you don’t know?
What questions would you ask in order to know?
What steps would you take in order to know?
POINTS TO PONDER
At another point in Alex’s testimony we read the following possible motivation for falsifying the account statements:
Q. And what were you going to do with regard to account statements after this meeting for clients?
A. There would be nothing different than what had previously been done.
Q. Which was what?
A. Which was showing them rates of return above two and a half percent per quarter.
Q. And the two and a half percent was a significant number why?
A. That was significant because that was the figure that was in the membership application that clients signed, when they came in to become clients, stating that no fees would be taken for any performance figure below that.
What does the sentence “There would be nothing different than what had previously been done” bring to mind?
What does the use of the word “ taken ”found in “no fees would be taken for any performance figure below that” bring to mind?
Does falsifying the two and a half percent return to clients illustrate pressure/motive, opportunity, rationalization or something else?
What questions would you pose to Alex at this point?
CONTENT – CONTEXT APPLICATION
A district supervisor with the Division of Motor Vehicle License and Theft Bureau was charged with stealing property and misconduct in office. The warrant indicated the supervisor had bought stolen property—three stolen lawn mowers—that were part of an ongoing investigation. The warrant also stated he subsequently concealed the evidence and hindered the investigation into those who were involved in the theft.
In regard to an individual holding a supervisory position in an investigative agency:
Would the purchase of three stolen lawn mowers (part of an ongoing investigation) be a function of pressure/motive, rationalization or opportunity?
Would concealing the evidence and hindering the investigation be a function of either of the same three fraud triangle elements?
Why would someone functioning within an organization that consistently discovers and prosecutes violators of the law believe that they
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