Behavioral Characteristics of Fraudsters

Behavioral Characteristics of Fraudsters

Fraudsters are as unique as each of us; they do not all look the same or act the same. However, the ACFE has uncovered some recurring characteristics of fraudsters that should be considered in conjunction with suspicious behavior.

John Warren, VP and general counsel at ACFE, has stated that people tend to consider fraud an accounting issue when it is mainly a behavior issue. We should focus on the behaviors that tend to arise before frauds happen that can lead to unethical behavior. The ACFE has identified six red flags that frequently show up in fraud cases: living beyond means (41 percent), financial difficulties (29 percent), unusually close association with a vendor/customer (20 percent), control issues/unwillingness to share duties (15 percent), divorce/family problems (14 percent), and “wheeler-dealer” attitude (13 percent).

All six red flags have shown up in every ACFE report since 2008, meaning they are consistent predictors of fraud. In fact, 85 percent of fraud cases studied in the report showed at least one of these flags, and 50 percent of cases demonstrated multiple red flags.

About the Speaker

John Warren has served as general counsel of the Association of Certified Fraud Examiners since September 2004. Mr. Warren is responsible for providing guidance, oversight and direction to ACFE management and staff on all legal issues that affect the association. In 2006, Mr. Warren was appointed as an advisory member of the ACFE Board of Regents and in 2009 he was appointed Vice President of ACFE.

Aside from his legal duties, Mr. Warren is also responsible for producing the Report to the Nations on Occupational Fraud and Abuse, a bi-annual report issued by ACFE on the costs and effects of occupational fraud.

Prior to becoming general counsel, Mr. Warren served for eight years as associate general counsel and senior researcher of ACFE. He contributed works on occupational fraud, courtroom procedure, corporate espionage and embezzlement to the ACFE’s training program, and he served as a guest author for the “Fraud and the Law” column in The White Paper. Mr. Warren worked with Chairman Joseph T. Wells to develop the ACFE’s Higher Education Initiative, which provides free educational materials to colleges and universities that teach courses in fraud examination. He also has worked on behalf of ACFE to develop the Institute for Fraud Prevention, a multidisciplinary academic research center and consortium of universities dedicated to preventing and deterring fraud and corruption through research and education.

Mr. Warren received Bachelor of Science degrees in Political Science and Economics from the University of South Dakota in 1992, and a J.D. from Baylor Law School in 1995. He is a licensed member of the State Bar of Texas..

The training will be held via live Zoom webinar. The live stream link and additional details are provided on the online events page after registration.