Financial Fraud Deja Vu

It’s surprising to find that most people really don’t understand what fraud is. Sure, they hear about it, usually on a grand scale, but they don’t understand what really happens and the devastating effect it has on people, companies and economies. My discussion of the 57 varieties of fraud is eye opening and thought provoking; this is not your usual speech about ethics. Looking for where fraud is most likely to occur is a key discussion — knowing where fraud is likely to occur can be the first step in learning how to avoid it.

It’s time we start publicaly talking about fraud; what it is and what it does. Knowing and understanding white collar fraud helps employers, workers, students and teachers come to the realization that fraud will most certainly happen again. It’s time to get serious in learning about fraud, to begin developing a knowledgeable attitude and the position that it’s “not happening here”.

Sometimes people can’t resist the temptations, be they the CEO, CFO or the employee working on the dock, because fraud doesn’t always occur at the top. We’re lead to believe this mostly by the media, so we only get to hear or read about the really big ones, since they make the biggest news. Fraud is all around us every day.

Financial Fraud Déjà Vu, a coming ‘round again, why can’t we see it coming? To deal with and combat fraud, we need to begin accepting that we can eliminate it no more than we can get rid of all the germs in the world. Most people are unaware of what fraud is and what they should be looking for. There is a screaming need for awareness concerning fraud. And as a result, we seem to choose to overlook how it may affect us personally; as relationships are hard hit, strained to the max, loss of character then faith, disbelieving that it could happen here, to each of us.

We have a long, recent history of frauds — from the S&L’s to Enron, from Martha to Madoff, to Tyco, Health South, WorldCom, AIG, Sub Prime or Stanford, whatever the name they all have in common the drastic financial effect on innocent people; who, suddenly find themselves on an involuntarily trip down harm’s way. We must begin to face the reality that some form of financial fraud is occurring under our noses now, even though ethical procedures and policies are in place “acting” as preventatives.

Every company, every college classroom, every club, society and association can benefit by knowing what fraud is, how it happens, why it happens and how to avoid it. Financial Fraud Deja Vu, keeps coming ’round and ’round.

John Gordon Smith Ethics Speaker

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