10th Annual CCS Economic Crime Lecture

  • 1 July 2010

The 10th Annual CCS Economic Crime Lecture, sponsored by QEB Hollis Whiteman and PCB Litigation, gave an insight into thmindset of fraudsters and showed how companies can use this information to redefine their own security plans and procedures.

The key speaker, Professor Martin Gill, Director of Perpetuity Research and Consultancy International., has spent a number of years interviewing criminals ranging from armed robbers to murderers, including several fraudsters. Professor Gill has suggested that all of these people shared one common trait- a belief that they would not be caught.

Fraudsters, according to Professor Gill, are different in their nature to other criminals. In many cases they become fraudsters through chance, accident, or simply because it is too easy not to succumb to temptation.

CCS Director Pottengal Mukundan commented: “Professor Gill has provided a fascinating insight into the mindset of a fraudster. It is important for businesses to ground their anti-fraud procedures with lessons learnt from real-world examples..”

Martin Gill said that amongst the many reasons fraudsters gave for becoming criminals, notably debt, family expenditure, disgruntlement with the workplace or perceived unfairness; the one over- riding factor was opportunity: because they could and because it was easy. To make it less easy, and with the assistance of fraudsters, he had developed some penetrative testing systems designed to show companies how crime could be committed on their premises and ultimately what they could do to prevent it.

Once you can spot the problem, he said, the solutions are often quite simple. Yet he is still amazed that many companies won’t change the way they do business because they perceive that to do so will actually lose them custom. “They ignore the offender’s perspective at their peril,” he said.

The second part of the Annual Lecture was provided by ‘Paul’, a twice convicted fraudster who told how he got involved, got convicted and then did it all over again – and got convicted again. He currently puts this experience to good use rooting out and reporting corruption and fraud whilst working undercover in the construction industry.

In the years since he came out of prison, Paul said he has come across numerous examples of fraud in the construction industry and that, if anything, it is even easier to do now. Despite previous cases, few procedures have been put in place to stop it and the culture of corruption is alive and well. He says he has found fraud up to director level and reported it, but to date no one has ever been prosecuted, even though these people clearly get money second and third hand.

He said that very little effort went into tracing the missing money: managers might be dismissed but always the fear of adverse publicity drove the response, even when very large sums (£600,000+) were involved.

Employers must overcome their complacency about fraud, he said. The must do more spot checks and more regular audits using external auditors that senior executives cannot distract or compromise. Martin Gill concluded by urging company representatives to be more willing to explore the possibilities when they next reviewed their security plans and procedures.