The Human Impact of Fraud

When you work in any field of criminal justice, the elapse of time may not desensitise you to the impact the crimes have on the victim involved, but it will certainly acclimatise you.

Uncovering a $100,000 fraud early in your career is likely to be super exciting, however as time goes on, the same discovery is likely to be nowhere near as monumental. In the search for greater professional accolades by identifying more significant cases of fraud and assisting to convict the perpetrator, it could be easy to lose sight of the human damage inflicted on the fraud victims. But, at Worrells this human aspect is always front of mind and we approach all matters of fraud as if any loss is too much of a loss.

Delivering the news to a client that the person they probably trusted implicitly has defrauded them, and then advising them of the quantum effect, can be heart-wrenching. While they may have had their suspicions, often they are not prepared for confirmation.

The following case studies demonstrate the human impact of fraud, beyond just the numbers.*

Mary became a widow in 2010. Her husband left her a small nest egg which he hoped she would use to rebuild her life and provide an education for their children. Mary met an investment advisor, FR, at a seminar about investing in real estate in America. She gave FR $100,000 to purchase a number of properties on her behalf, and FR produced some very limited documentation to evidence the purchase. She became increasingly nervous about the investment and came to us to determine where her money had gone. We discovered that, rather than purchase the properties in Mary’s name, FR had invested the money into a USA company in which the investment advisor was involved in. The USA company sold “Mary’s” properties long ago and effectively her entire nest egg was gone. Not only was Mary now virtually destitute, her children couldn’t continue in the school their father had wanted for them, and Mary was left feeling she had let her husband down— all because she trusted FR.

Recently I worked on a case where a business owner, RW, engaged PT, his son-in-law, as his financial controller. RW trusted PT completely and handed him total control of the business finances. When RW realised something was not right, he removed PT from the business and terminated his access to the premises, computer system, and bank accounts. His suspicions were confirmed correct as PT had embezzled several hundreds of thousands of dollars. Thankfully, RW had the financial resources to rebuild the business. Unfortunately, no amount of money could rebuild his trust in personal relationships.

Often, not only the victim’s immediate family feel the impact of fraud. The family of the perpetrator can also be victims. Although, not having had first-hand involvement in such a case, I am aware of situation where someone had defrauded their employer for substantial amounts of money. The family was completely oblivious to the fraud and just thought he earned a lot of money to provide them with the finer things in life. The employee ended up bankrupt as he was taking the money to hide a bad gambling habit and all his assets were financed to the limit. Ultimately, his marriage also fell apart. In this case, not only did the business owner lose a large amount of money, but the fraudster’s wife and children also became victims of the perpetrator.

Undoubtedly, the impact of fraud goes far beyond just the numbers—and our approach is to encourage the view that uncovering fraud is an opportunity to get some form of closure, which enables the rebuilding process. But beyond this, by raising awareness of these atrocious crimes, we hope it compels people to become vigilant with their money, and the people they entrust it with.