Fool proof: white-collar crime and the damage it leaves behind

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In Fool Me Once, Kelly Richmond Pope amply demonstrates that fraud is never victimless—sometimes it can even kill.

In the notoriously buttoned-down world of accountancy, forensic accounting professor Kelly Richmond Pope is a rock star. Her fame as a white-collar crime expert skyrocketed with her 2017 documentary All the Queen’s Horses, a compelling story about the largest municipal fraud in American history. From 1990 to 2012, Rita Crundwell, a city comptroller in Dixon, Illinois, stole from her employer at the rate of $37,000 a day for a total of $53.7 million. But it wasn’t the crime alone that propelled Pope into a deeper exploration of fraud and its ecosystem, as she sets out in her engaging new book, Fool Me Once: Scams, Stories and Secrets from the Trillion-Dollar Fraud Industry.

There was acute personal interest, too: in 1991 Pope’s father was forced to resign as chancellor of North Carolina Central University after a case of employee embezzlement. Dr. Tyronza Richmond was not involved in the crime, but took the rap for the oversight failure. “The spectre of that debacle loomed over him for the rest of his life,” his daughter writes. “And, I guess, mine too.” Then there were the Crundwell red flags, as large as the theft itself. By the final years of her crime spree, Crundwell—a modestly paid high school graduate with no family wealth—was taking four-month unpaid leaves to manage what stolen taxpayer money had bought her, a multimillion-dollar Quarter Horse empire that produced 52 world championship winners. From the gaping hole in the municipal coffers to Crundwell’s lifestyle, none of the dots were connected by Dixon officials, other city staffers or the city’s auditors.

Fool Me Once covers years of Pope’s research into the factors that facilitate white-collar crime and the damage it leaves in its wake. Much of the book is drawn from conversations with fraud protagonists—perpetrators, victims and whistleblowers—many of whom she invited to address her classes at Chicago’s DePaul University. Although she provides prosaic details on the mechanics of various frauds, Pope’s primary interest lies in motive, choice and blind eyes.

She now wants everyone, not just her accountancy students, to face what she considers an escalating problem. Worldwide, organizations lost US$3.7 trillion to fraud in 2019, according to the Association of Certified Fraud Examiners; by last year that figure, inflated by COVID-19 relief scams, was closer to US$5 trillion. And that’s without mentioning fraud so quotidian that few of us recognize it as such: have you ever “fudged a timesheet or expense report?” Pope asks rhetorically. And fraud is never victimless, she argues vehemently. Sometimes it can even kill.

Robert Courtney was a compounding pharmacist, meaning one who made specialty drugs not usually available in a regular pharmacy. After 1990 he began watering down the amount of active ingredients in his prescriptions to increase his profit margins. It took more than a decade to catch him, despite the fact that cancer patients were not suffering their drugs’ blatantly obvious side effects—hair loss and nausea—nor, of course, were they getting better. In 2002 Courtney pleaded guilty to diluting 98,000 prescriptions to a third of their required dosage for 4,200 patients, many of whom died.

Courtney exemplifies what Pope considers fraud’s three-pronged root: the intersection of opportunity (he worked unmonitored in a lab), pressure (he owed the IRS $600,000) and rationalization (they’re cancer patients and going to die anyway). He was also a deliberate perpetrator, as opposed to the accidental sort, who stumble into their crimes, find they have escaped notice, and experience an epiphany. Diann, who Pope does not further identify, mistakenly charged a personal trip to her company credit card rather than her own. When that brought no response, Diann doubled down, charging more to the company and even—as a financial officer—giving herself an unauthorized raise, and eventually embezzled $500,000.

For Pope, what really links perpetrators is how long it takes for their crimes to be noticed, even when the alarm lights are flashing, when a city can’t afford to maintain its roads and its comptroller is running an equine empire. Part of this is what Pope calls bystander effect, a tendency to discount red flags precisely because they’re so obvious—surely if there was something wrong here someone would be doing something about it? But another factor is the “whistleblower’s dilemma”: the choice would-be informants face between speaking up and remaining loyal to the tribe. When Pope explained to her class that one fraud was exposed by a fellow staffer, many of her students—trainee forensic accountants, no less—expressed disdain for the whistleblower, calling her actions a betrayal of friendship and her a “snitch,” a word Pope loathes.

All in all, it is not a pretty picture, and Pope acknowledges that pressure and rationalization will never disappear from the human condition. But opportunity can be severely reduced. Organizations can celebrate whistleblowers, she argues, maintain functional ethics hotlines, and push their entire workplace culture into a place where challenges are casual, frequent and, above all, normal. Pope’s aim is to make the second part of the familiar proverb referenced in her carefully chosen title more dominant than the first half: fool me twice, shame on me.

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