the psychology of fraud

8/12/2019 The Psychology of Fraud

1/6

A U S T R A L I A N I N S T I T U T EO F C R I M I N O L O G Y

t r e n d s

&

i s s u e s

No. 199

The Psychology of FraudGrace Duffield and Peter Grabosky

in crime and criminal justice

March 2001

ISSN 08178542

ISBN 0 642 24224 0

Australian Instituteof CriminologyGPO Box 2944

Canberra ACT 2601Australia

Tel: 02 6260 9221Fax: 02 6260 9201

For a complete list and the full text of thepapers in the Trends and Issues in

Crime and Criminal Justice series, visitthe AIC web site at:

http://www.aic.gov.au

Adam GraycarAdam GraycarAdam GraycarAdam GraycarAdam GraycarDirectorDirectorDirectorDirectorDirector

Fraud, like other crime, can best be explained by three factors: a supplyof motivated offenders, the availability of suitable targetsand theabsence of capable guardianscontrol systems or someone to mindthe store, so to speak (Cohen & Felson 1979). In this, the first of two

papers, the authors focus on motivation and other psychologicalaspects of fraud. They identify a number of psychological correlates offraud offending, but note that these are by no means unique to fraud,and do not necessarily differentiate fraudsters from law-abidingcitizens. The other two factors, opportunities and guardianship,

provide more scope for fraud control and will be addressed in acompanion paper on red flags, or situational indicia, of fraud risk.

Defining Fraud

In its broadest terms, fraud means obtaining something of value oravoiding an obligation by means of deception. This embraces manyand varied forms of conduct, ranging from false claims against aninsurance policy to some corporate frauds that are meticulously

planned and intricate in their execution. The variety andcomplexity of fraud necessitates that, for purposes of explanation,the concept of fraud be broken down into manageable categories.This paper categorises fraud in terms of the organisational contextin which it occurs, and the nature of the relationship betweenoffender and victim. It then explores what the perpetrators of thesedifferent types of fraud have in common, and what distinguishesthem from each other. For the purposes of comparison, thefollowing categories of fraud have been set out. Fraud committed against an organisation by a principal or senior

official of that organisation. Examples of this include offencesagainst shareholders or creditors by errant high-flyingentrepreneurs (Sykes 1994) or corrupt practices by senior public

officials. Fraud committed against an organisation by a client (an

outsider) or employee (an insider). This category includesembezzlement, insurance fraud, tax evasion and other fraudagainst government.

Fraud committed against one individual by another in the contextof direct face-to-face interaction. This would include classic congames (Maurer 1940), frauds by sales staff, and predatoryactivities against clients or customers by unethical investmentadvisers, shady roof repairers and others who prey directly on aconsumer.

Fraud committed against a number of individuals through printor electronic media, or by other indirect means. This would

include Nigerian advance fee frauds (Smith, Holmes & Kaufmann1999), share market manipulation, and deceptive advertising orinvestment solicitations pitched at a relatively large number ofprospective victims.

The above categories are neither definitive nor mutually exclusive,but they do provide a useful starting point for explanation.


2/6

Australian Institute of Criminology

2

Explaining Fraud

Like other crime, fraud can bestbe explained by three factors: asupply of motivated offenders,the availability of suitable targetsand the absence of capable

guardians(Cohen & Felson 1979;Krambia-Kapardis 2001). Thethree are inextricably linked. AsNettler (1974) observes:

The intensity of desire and theperception of opportunity arepersonality variables. Thebalance between desire andopportunity moves. Temptationto steal fluctuates withindividual temperament andsituation. (p. 75)

Motivation is therefore a

combination of an individualspersonality and the situation inwhich they find themselves.Conversely, psychological factorswill influence the way a personinterprets the situation they are inand this, in turn, will influencethe action they choose to take.

Psychological Factors in Fraud

At first glance, a psychological

explanation for fraud wouldappear simplegreed anddishonesty. Such an explanationis, however, overly simplistic.There are many in society whoare aggressively acquisitive butgenerally law abiding. Moreover,not all dishonest people commitfraud. To date, behaviouralscientists have been unable toidentify a psychologicalcharacteristic that serves as avalid and reliable marker of the

propensity of an individual tocommit fraud.

There are, nevertheless,numerous examples of attemptsto distinguish people who willcommit fraud (or who arepredisposed to commit fraudgiven the right situation) fromthose who will not. These attemptsinclude honesty or integritytesting aimed at measuring thetrustworthiness of potential

employees (Sackett & Harris 1984;Ones, Viswesvaran & Schmidt1993). Personality instruments,such as the MinnesotaMultiphasicPersonality Inventory and thePersonality Assessment Inventory,

are also used to screen outundesirable applicants frompositions of trust in public andprivate sector employment. Whileit is not within the scope of thispaper to examine the reliabilityand validity of honesty testing,there is little doubt that there area number of psychological ormotivational factors that areassociated with increased risk offraud. In looking at the factorsassociated with fraud in a generalsense, as well as specificcategories of fraud, it should beremembered that psychologicalfactors might be viewed as amarker for fraud but not acomprehensive explanation for it.

Common Elements of Motivationfor Fraud

Explanations based on financialstrain feature in almost every typeof fraudulent activity. This mayarise from imprudence,misfortune or a combination ofthe two. Of course, financial strainis a very subjective thing. Eventhose of above-average affluencemay feel economically deprived

in comparison to what theyperceive to be their relevantstandard. At times, keeping upwith the Joness may requireother than lawful conduct. Simplyput, this comes down to the desireto possess what one cannotafford, even when true financialdeprivation may not exist.Inherent in this is an element ofego in which there is acomparison with others who are

better off and a desire to matchthat standard in terms of lifestyle,comfort and material possessions.

Financial strain may also arisefrom the threat of loss ofsomething currently owned. Forexample, high-flyingentrepreneurs may encounteradverse business conditions thatplace them in a position of acutefinancial vulnerability andthreaten the empire that theyhave built for themselves. The

threat of loss here is not only ofmaterial wealth but also of power,status and pride. To some, fraudmay be seen as a short-termsolution to this problem. Other

sources of financial stress mayresult from lifestyle choices, themost prominent of which iscompulsive gambling. Incontemporary society the cost andaddictive properties of illicitdrugs may also contribute tofinancial stress on the part ofthose individuals who indulge inthem. Relationship breakdownscan also cause acute stress, bothfinancial and emotional,especially given expensivedivorce settlements and custodyor maintenance battles. In somecases marital breakdown canrepresent a sudden and dramaticdecline in an individualsstandard of living, along with afeeling of powerlessness and

resentment. This constellation offactors reflects the old-timedetectives explanation of whatturns a person to fraudsexualrelationships, substance abuseand risk-taking or gambling. Thisis also known as the hypothesisof the three Bsbabes, booze and

bets (Nettler 1982, p. 74).Another aspect of motivation

that may apply to some or alltypes of fraud is ego/power. This

can relate to power over people aswell as power over situations. Interms of the former, the sensationof power over another individualor individuals seems to be astrong motivating force for somefraud offenders to the point that it

becomes an end in itself. As oneconfidence man put it:

For myself, I love to make peopledo what I want them to, I lovecommand. I love to rule people.Thats why Im a con artist.

(quoted in Blum 1972, p. 46)In manipulating and making foolsof their victims, some fraudperpetrators seem to take acontemptuous delight in the actitself rather than simply theoutcome. As Stotland (1977)points out:

sometimes individualsmotivation for crime may haveoriginally been relativedeprivation, greed, threat tocontinued goal attainment and so

forth. However, as they foundthemselves successful at thiscrime, they began to gain somesecondary delight in the knowledgethat they are fooling the world,that they are showing theirsuperiority to others. (pp. 1867)


3/6


3

Similar to the sense of superiorityover others is the gratificationobtained from mastery of asituation. This may be particularlyprevalent in more complex, long-term fraud and computer fraudwhere specialist skills arerequired. It also reflects theprofessional pride of theconfidence artist. The followingquotation illustrates the thrill ofthe chase.

Half of being a con man is thechallenge. When I score, I getmore kick out of that thananything; to score is the biggestkick of my whole life.(quoted in Blum 1972, p. 44)

Stotland (1977) calls this motivationego challenge (p. 188) and itrelates to the sense of mastery andexcitement in meeting andovercoming challenges. As hepoints out, some fraudperpetrators work very hard attheir trade, so they are not in it foran easy buck. While this isusually a positive quality whenchannelled into legitimateundertakings, it has becomecorrupted in fraud offenders.

Another general psychologicalaspect of fraud is the process of

rationalisation which reduces theoffenders inhibition. Suchattempts at prospective excusehave been termed techniques ofneutralisation (Sykes & Matza1957). There has been a tendencyin the literature to confusemotivation with neutralisation,

but they differ in important ways.Motivation is what drives the actof fraud, while neutralisationpaves the way by nullifying

internal moral objections.Regardless of the type of fraud,most offenders seem to seek to

justify or rationalise their activity.In doing so they will usevocabularies of adjustment(Cressey 1953, 1986; Krambia-Kapardis 2001) that manufacturerationale and extenuatingcircumstances and remove theperception of criminality from theact (at least from the point of viewof the perpetrator).

Techniques of neutralisationwill vary with the type of fraud(Benson 1985). For example,frauds against large companies orgovernment departments areoften rationalised with the excuse

they can afford it. Otherexamples of neutralisationsinclude viewing the victim asculpable in some respect or,alternatively, trivialising theoffence so that it becomes avictimless crime or so that thereis no significant harm done. Thosefrauds that involve a victimentering willingly and knowinglyinto an illegal act (such as moneylaundering or tax evasion) areamong the easiest for the fraudoffender to rationalise. In suchcases it becomes easy to believethat the victim had it coming. Inhis study of confidence men andtheir activities, Blum (1972) foundthat many attributed their successto the inherent greed of the

victim. Many con artists alsoseemed to have a misanthropicview of human nature andassumed that others were asscheming and dishonest as theywere. There is no doubt thatgenerating a dislike and lack ofrespect for the victim makes iteasier to treat them badly. As onecon man said, any people Idont like I can hustle better(quoted in Blum 1972, p. 44).

The idea of victims gettingwhat they deserve is reflected inanother con mans statement:

the victim has the sameresponsibility as the victimiser.If the victim never wantedanything from you, hed nevergo so far as to get in thecondition to be conned.(Blum 1972, p. 46)

In other words, you cant cheatan honest man. Responsibilityfor the fraud in this case is placed

squarely on (or at least sharedwith) the victim.Stotland (1977) has proposed

that as well as positivemotivations for white-collarcrimes such as fraud, there arealso weak restraints (p. 191)that lessen the inhibitions tocommit these crimes. In fact, theseare very similar to theneutralisations discussedelsewhere (Cressey 1953, 1986).One of these weak restraints is the

perception that everyone engagesin this behaviour as part of astute

business/financial practice. In thisway, practices such as tax fraud,insurance fraud and padding

expense accounts becomes normalbehaviour and those individualsthat do not participate are seen asnaive. Stotland goes on to pointout that the moral ambiguitysurrounding some types of fraudis exacerbated by thecharacteristically short sentencesmeted out to offenders. Inparticularly high profile cases, theleniency of punishmentcommunicates to society thatthese people are somehowdifferent from the commoncriminal. Again, this tends todecriminalise fraud in the eyesof the public. Stotland also statesthat the nature of the victim canweaken restraints on the white-collar criminal with impersonal

government departments andlarge organisations being morallyeasier to defraud. Stealing a littlefrom a lot of people means thatharm is not as up close andpersonal as it would be in thecase of an individual victim orsmall group. This is similar to thethey can afford it neutralisationmentioned earlier.

Dimensions of Fraud

In addition to psychologicalfactors that are common todiverse types of fraud, somefactors will be unique to specifictypes of fraud. Moreover, thepsychological factors thatdistinguish one type of offencefrom another may alsodistinguish one type of offenderfrom another. For example, theindividual involved in

sophisticated and complexmanipulation of share marketsmay be quite distinct fromsomeone involved in the ruthlessexploitation of a vulnerableindividual whom they have takeninto their confidence. In a sense,the behaviour an offender showsin a crime may provide cluesabout their psychologicalcharacteristics. Although thispaper is not a definitive attemptto criminally profile fraud

offenders, we begin to examinepossible differences by setting outour four general categories offraud and discussing some of thepsychological factors that may beassociated with each.


4/6


4

Fraud committed against anorganisation by a principal or senior

official of that organisation

Entrepreneurial fraud, ormisappropriation of corporateassets by senior management,appears to be related to a

constellation of factors. High-flying entrepreneurs tend to beextremely ambitious to the pointof appearing driven. They alsoappear obsessed with enhancingpower and control. Seniormanagers also usually have afavourable impression ofthemselves, sometimesunrealistically so. Whether it isconditioned by the successes theyhave attained during their rise tothe top, or whether it is anecessary prerequisite to get tothe top in the first place, somedevelop a sense of superiority

bordering on narcissism. It wassaid of Christopher Skase, forexample, that he had a ferociousfaith in the rightness of whateverhe was doing (Sykes 1994,p. 306). Another characteristic ofentrepreneurial fraudsters is theirtendency to surround themselveswith sycophants or organisational

conformists who are easilydominated. John Friedrich, whodefrauded the National SafetyCouncil, was said to surroundhimself with loyal workers (Sykes1994, p. 240). Similarly, it was saidof Christopher Skase that he wasvery impatient with criticism(Sykes 1994, p. 306). Persons whoharbour unrealistic impressions oftheir own capability, whenreinforced by sycophants, lack a

reality check and may be morelikely to engage in riskybehaviour than more grounded ornormal executives (Janis 1982)

This risk-taking would beexacerbated by the indifference toconventional rules of conduct thatapply to narcissistic personalities.According to the Diagnostic andStatistical Manual of MentalDisorders, narcissistic personalitydisorder is a pervasive pattern ofgrandiosity, a need for admirationand a lack of empathy for others.Individuals with this disorder

believe that they are superior,unique and chosen, and theyare likely to have inflated views of

their own accomplishments andabilities. They focus on how wellthey are doing in comparisonwith others, and this can take theform of an excessive need forattention and admiration. A senseof entitlement is evident and theyexpect to be given whatever theywant regardless of the impositionit places on others. In theworkplace these people tend tooverwork others. They demandunquestioning loyalty and areincredulous or infuriated when itis not forthcoming. They arelikely to respond angrily tocriticism (DSM-IV Task Force1994, pp. 6589). Perhaps mostrelevant to fraud offences is thetendency of the narcissistic

personality to usurp specialprivileges and extra resources thatthey feel they have an entitlementto, over and above ordinarypeople. This attitude is capturedin the words of Leona Helmsley, awealthy American subsequentlyconvicted of tax evasion, whenshe said only the little peoplepay taxes. Due to their ambition,confidence and ruthlessness indealing with others, the

narcissistic personality may be ahigh achiever in their chosen fieldof endeavour.

Estimated prevalence rates ofnarcissistic personality disorder inthe general population are aboutone per cent. While theprevalence rate is likely to bemuch higher in the population ofentrepreneurial fraudsters, itmust be remembered that notevery narcissistic personality willcommit fraud. Indeed, some will

appear to do quite well incorporate environments.However, it can be argued thatthe presence of narcissisticpersonality traits increases therisk of fraud on the part of anindividual through the attitudesthey manifest, their leadershipstyle and the environment thatthey seek out.

Fraud committed against anorganisation by a client or employee

At least two major themes emergein the phenomenon of employeetheft (Sarbin 1994, p. 114). In thefirst theme, an employeeperceives that they are being

treated unfairly by theiremployer. This is a subjectiveassessment and may or may not

be justified. It can be due to amultitude of circumstancesincluding missing out on apromotion, feeling thatremuneration is inadequate,perceived unfair treatmentcompared to co-workers,disciplinary action, or chronicresentment at a perceived lack ofappreciation (of talents and/orcontribution). Under theseconditions disgruntlement maydevelop and the vengefulemployee may seek retributionfor perceived slights and/orneglect through acts such aslarceny and embezzlement. In this

way they get what they feel istheir just reward while punishingthe management or organisationthat overlooked them. If donesuccessfully over time, egomotives and a sense of superiorityover others may also contribute tothe fraudulent activity.

The second theme is that ofterritorial ownership. Employees,especially those in largeorganisations or government

departments, may presumepersonal ownership orentitlement by virtue ofoccupation (of a position or space)or through regular use/access.The resource becomes myoffice, my computer and my

budget. This, in turn, seems toprovide moral justification fortaking the resource for personaluse. While this may account for alot of petty pilfering of stationery,much larger abuses (for example,

computer equipment, credit cardaccess) are also potentially seen asunofficial perks of the job.

Fraud committed against one individualby another in the context of face-to-face

interaction

The direct person-to-persondeception of another individualcan involve utter ruthlessness.This may take such extreme formsas the person who takes a widow

into his or her confidence andleaves her penniless. Offenders ofthis type may manifest a numberof traits including lack of affectionor empathy, lack of remorse and ageneral lack of conventional


5/6


5

conscience. Such individuals arealso likely to enjoy acting, asacting skills are advantageous, ifnot essential, to the deceptioninherent in face-to-face fraud.Beyond this, skills insalesmanship and sociability arealso helpful to the con artist.One notes that some of the samequalities that facilitate fraud arealso integral to successfulcommercial activity of alegitimate nature.

From a psychosocial point ofview, this group is perhaps themost seriously disturbed due tothe requirement for often quiteintimate interpersonal betrayal. Astudy by Blum (1972) showed thatconvicted offenders in this group

scored high on measures ofpsychopathology. Hecharacterised this group asimpulsive, amoral, uncontrolledand detached from normalrelationships (p. 49). Heconcluded that they are anunusually sick group in terms ofmental health and an unusuallyantisocial group in terms of lackof regard for others (p. 50). WhatBlum uncovered in his sample is a

strong thread of antisocialpersonality disorder.According to the Diagnostic

and Statistical Manual of MentalDisorders, antisocial personalitydisorder is a pervasive pattern ofdisregard for, and violation of therights of, others. This basicallyrefers to a lack of socialconscience and conventionalmorality. These personalitiesfrequently deceive, exploit andmanipulate others in order to

achieve personal gain (forexample, money, sex or power). Apattern of impulsivity is oftenapparent in all aspects of theirlives and there is a specialattraction to risk-taking, thrill-seeking and gambling. Theseindividuals show no genuineremorse for their actions. Thesuperficial justifications that theyoffer for having hurt othersresemble the neutralisations that

were discussed earlier. Theyblame their victims for beingstupid or deserving of their fate,they minimise the harmfulconsequences of their actions orthey may simply display an

arrogant indifference. They arealso likely to believe that it is adog-eat-dog world andeveryone is out for number one(DSM-IV Task Force 1994,pp. 64555). While the prevalenceof antisocial personality disorderin the general population is

between about one per cent andthree per cent, rates in prisonpopulations are much higher andit is possible that prevalence isalso higher in this sub-type offraud.

Fraud committed against a number ofindividuals through print or electronic

media, or other indirect means

For those unable to look aprospective victim in the face, a

variety of media permit indirectdealing. The terms mail fraudand wire fraud date to the earlydays of the twentieth century inthe United States. The most recentmanifestation of long-distancepostal frauds is the Nigerianadvance fee frauds involvingmass mailings. Subsequently,telemarketing fraud usedtelephone systems tocommunicate with victims. More

recently, the advent of digitaltechnology has facilitatedinstantaneous communicationwith millions of prospectivevictims through the use of theInternet and email.

From a psychologicalperspective, the fraud at adistance perpetrated throughmedia entails reduced social cuesduring interaction with thevictim. While the degree ofcallousness required to dupe

someone face-to-face isfortunately quite rare, far moreindividuals are capable of thedepersonalised social aggressionrequired for indirect fraud. Infact, it has been suggested that thelack of social cues incommunication such as emailleads to a reduction in theinfluence of social norms andconstraints on the averagepersons behaviour (Johnson

1998). Overall, these media serveto distance the fraudster from theprospective victim, making thepredatory conduct less difficultfor those offenders with somesemblance of conscience.

Conclusion

What is apparent from theliterature is that the risk of fraudis a product of both personalityand environmental or situationalvariables. This has two

implications for understandingfraud risk. First, it means thatindividuals will vary in theirpropensity to commit fraud evenwhen they are subject to similarenvironmental pressures. Second,it means that situations will varyin their impact on individualsaccording to the inherent riskfactors at any given time. Just asthere are likely to be high- to low-risk individuals, there are alsolikely to be high- to low-risksituations. As individuals movefrom one environment to another,the probability of fraud behaviouralso changes. There are likely to

be situational conditions thatwould discourage all but the mostincorrigible people fromcommitting fraud. Conversely,there are situations thatencourage fraud to the point thateven the average person is at riskof engaging in it.

Identification of fraud risk isstill in its infancy. Few categoriesof offences suffer from the samedearth of psychological profiles ofoffenders as fraud and white-collar crime in general. Moreresearch is required beforeconclusively defining whichpersonality traits or disordersmake up characteristicpredispositions toward fraud. Inthe meantime, the best that can be

done is to point to personalitycharacteristics and motivatingfactors that may be associatedwith an increased risk of fraud.Unfortunately, thesecharacteristics (for example,narcissism) and motivations (forexample, a need to demonstratesuperiority over others) alsoinfluence a great deal oflegitimate, indeed desirable,

behaviour in professional andcorporate settings. Consequently,

they are not always amenable topolicy intervention.

Nor do they lend themselvesprecisely to the prediction offraud risk. There is a substantial


6/6


6

General Editor, Trends and Issues inCrime and Criminal Justice series:

Dr Adam Graycar, DirectorAustralian Institute of CriminologyGPO Box 2944Canberra ACT 2601 Australia

Note: Trends and Issues in Crime andCriminal Justice are refereed papers.

literature on the prediction ofdishonesty, but instruments areimprecise and still generate anumber of so-called falsepositivespeople who appear to

be at risk of offending but whoare in fact unlikely to commit thecrime. Personality-based integritytests also capture a range ofundesirable workplace

behaviours (such as tardiness orpoor performance). These testsseem to be measuring the broaderconcept of conscientiousnessrather than fraud risk per se.

One policy opportunity thatdoes clearly arise from the abovediscussion is that of confrontingtechniques of neutralisation. Tothis end, the efforts of anti-

corruption and integrityauthorities in raising the standardand clearly delimiting whatconstitutes unacceptable

behaviour may, in the long run,increase inhibitions against fraud.Ethics, however, will get us onlyso far. There will always be a hardcore of people who, with fullknowledge of the difference

between right and wrong, will optfor the latter.

The prosecution andsentencing of fraud offendersprovides further opportunities toreaffirm societys condemnationof intentionally deceptivepractices. Aggressive prosecutionand severe sentencing may helpsend a message that makes itdifficult for potential fraudsters torationalise or excuse theirintended acts. It has beensuggested that white-collarcriminals are particularly

influenced by punishmentpolicies because they have muchmore to lose through publicityand imprisonment than commonstreet offenders (Braithwaite1985). Despite this, there is animpression that compared toother offenders, courts treatwhite-collar criminals moreleniently.

In summary, the key tounderstanding and eventually

controlling fraud is to considerboth the individual and theenvironment in which theyoperate. While this paper hasexamined some individual factors

associated with fraud, there aremany situations in whichpersonality and motivations lie

beyond the reach of policy. Inthese cases, those who wouldprevent and control fraud mustlook to reducing opportunitiesand to exercising a degree ofsurveillance. This will be thesubject of the sequel to this paper,Red Flags of Fraud (Trends andIssues No. 200).

AcknowledgmentsAcknowledgmentsAcknowledgmentsAcknowledgmentsAcknowledgments

The Fraud Offender Characteristicsproject was funded by National CrimePreventionTowards a Safer Australia,an initiative of the Federal Government.It was initially proposed by CrimePrevention Queensland in theDepartment of the Premier and Cabinet.

The authors wish to thank Keith Inman,Michael Levi, Tim Prenzler and RussellSmith for their helpful comments.

References

Benson, M.L. 1985, Denying the guilty

mind: Accounting for involvement in

white collar crime, Criminology,

vol. 23, pp. 583607.

Blum, R.H. 1972, Deceivers and Deceived:

Observations on Confidence Men and

their Victims, Informants and their

Quarry, Political and Industrial Spiesand Ordinary Citizens, Charles C.

Thomas, Springfield, Illinois.

Braithwaite, J. 1985, White collar crime,

Annual Review of Sociology, vol. 11,

pp. 125.

Cohen, L. & Felson, M. 1979, Social change

and crime rate trends: A routine

activity approach, American

Sociological Review, vol. 44, pp. 588

608.

Cressey, D.R. 1953, Other Peoples Money: A

Study in the Social Psychology of

Embezzlement,Free Press, Glencoe,

Illinois.

Cressey, D.R. 1986, Why managers commit

fraud, Australian and New Zealand

Journal of Criminology,vol. 19,

pp. 195209.

DSM-IV Task Force 1994, Diagnostic and

Statistical Manual of Mental Disorders

(fourth edition), American Psychiatric

Association, Washington DC.

Janis, I. 1982, Groupthink: Psychological

Studies of Policy Decisions and Fiascos

(second edition), Houghton Mifflin,

Boston.

Johnson, A. 1998, Causes and implicationsof disinhibited behaviour on the

Internet in Grackenbach, J. (ed.),

Psychology and the Internet:

Intrapersonal, Interpersonal, and

Transpersonal Implications,Academic

Press, San Diego, California, pp. 4360.

Krambia-Kapardis, M 2001, Enhancing the

Auditors Fraud Detection Ability: An

Interdisciplinary Approach, Peter

Lang, Frankfurt am Main.

Maurer, D. 1940, The Big Con: The Story of

the Confidence Man,Anchor Books,

New York.

Nettler, G. 1974, Embezzlement without

problems, British Journal of

Criminology, vol. 14, pp. 707.

Nettler, G. 1982, Lying, Cheating, Stealing,

Anderson Publishing, Cincinnati,

Ohio.

Ones, D.S., Viswesvaran, C. & Schmidt, F.L.

1993, Comprehensive meta-analysis

of integrity test validities: Findings

and implications for personnel

selection and theories of job

performance,Journal of Applied

Psychology, vol. 78, pp. 679703.

Sackett, P.R. & Harris, M.M. 1984, Honesty

testing for personnel selection: Areview and critique, Personnel

Psychology, vol. 37, pp. 22145.

Sarbin, T.R. 1994, A criminological

approach to security violations in

Sarbin, T., Carney, R. & Eoyang, C.

(eds.), Citizen Espionage: Studies in

Trust and Betrayal, Praeger, Westport,

Connecticut, pp. 10742.

Smith, R.G., Holmes, M.N. & Kaufmann, P.

1999, Nigerian advance fee fraud,

Trends and Issues in Crime and

Criminal Justice, no. 121, Australian

Institute of Criminology, Canberra.

Stotland, E. 1977, White collar criminals,Journal of Social Issues, vol. 33,

pp. 17996.

Sykes, G.M. & Matza, D. 1957, Techniques

of neutralization: A theory of

delinquency, American Sociological

Review, vol. 22, pp. 66470.

Sykes, T. 1994, The Bold Riders: Behind

Australias Corporate Collapses,Allen

and Unwin, Sydney.

Grace Duffield is a psychologist

with the Australian SecurityIntelligence Organization.

Dr Peter Grabosky is DeputyDirector of the Australian Insitute

of Criminology.

the psychology of fraud

Documents