Mary, Dr. Martin’s “second wife”, worked as the doctor’s office manager for thirty years. Mary knew Dr. Martin’s habits. She managed the practice, had access to company and personal credit cards, performed banking and even picked up Dr. Martin’s dry cleaning. A trusted employee, Mary was efficient. Mary was nice. But Mary was a thief – stealing more than $500,000 from Dr. Martin over a period of years.
There is a new trend of labels describing the individuals who steal from employers. For years, there was an economic differential of white-collar and blue-collar criminals says Kelly Paxton in Catch Her If You Can: Pink-Collar Criminals in Fraud Magazine’s November/December 2016 issue. Such historical labels were, at best, misleading labels about who steals from employers. An improper class bias implies individuals with higher levels of education steal from employees – which is flat out wrong. No matter a person’s position, there is an opportunity to steal from employers.
In 1989, Dr. Kathleen Daly referenced gender and varieties of white-collar crime. Dr. Daly labeled theft by “lower to mid-level office women – bookkeepers, office managers, accountants and clerks” as pink-collar criminals. This reference and label is similar to describing Agatha Christie as the leading female crime writer. That description sells Christie short. She is the highest-selling crime writer of all time, selling over two billion copies of her books.
In actuality, women have been stealing at a lower severity per occurrence because they have had less access to monies and power than men. Call it the glass ceiling of embezzlement. In recent years, the severity of crime by women has increased because women’s responsibilities have increased. According to Gregory Millman’s Wall Street Journal article Wages of Fraud Lower for Women, a 2015 report by Hiscox found women masterminded over 60% of frauds against employers in 2014, but embezzled a median of only $242,000, about 30% less than men. Women perpetrated three-quarters of payroll frauds, with a median loss of $300,000. Men executed two-thirds of vendor frauds, where the median loss was about double. Adding a fictitious vendor requires someone in a higher authority position, which is usually a male. Women aren’t necessarily bad crooks – they just historically have had less opportunity.
The Fraud Triangle
Individuals allegedly steal based on the Fraud Triangle of opportunity, pressure and relationships. However, we know people steal cash, assets and inventory. Individuals do not steal liabilities. Thus, what individuals steal and how much they steal from their employers is based on their opportunities, their positions and their duties in a job. Labels such as white-collar, blue-collar and pink-color provide little to no value in preventing or mitigating employees from stealing from employers.
What makes a difference is internal controls and opportunities.