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Faces of Fraud: Cases and Lessons from a Life Fighting Fraudsters by Martin T. Biegelman

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Chapter 7

Arrogance and Recidivism

A common denominator that I have found among many fraudsters is arrogance. Combining arrogance with a lack of integrity, responsibility, or conscience, and factoring in huge greed, provides damaging outcomes for the fraudster and victim alike. There have been numerous examples where arrogance resulted in the downfalls of fraudsters. No examples are better than what we witnessed from the corporate frauds involving Enron, WorldCom, Tyco, and others. These corporate scandals involved executives with no integrity, total arrogance, and huge greed, combined with weak boards and accounting firms that failed to fulfill their responsibility for independent auditing.

Corporate fraudsters such as Jeffrey Skilling and Andrew Fastow of Enron, Bernard Ebbers and Scott Sullivan of WorldCom, and Dennis Kozlowski of Tyco exhibited a complete disregard for shareholders and employees with their belief that they could steal whatever they wanted from their respective companies—and get away with it. People who commit fraud never think about the consequences. They believe there are no consequences because they are above the law. They think the corporate piggy bank is theirs to crack open and spend, not caring or understanding that shareholders are the true owners of their companies. These executives forgot who they really worked for and paid the price with convictions, prison, and disgrace.

The significant corporate frauds and resulting prosecutions of responsible corporate ...

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