If you wanted to draw up a profile of your average embezzler last year, the portrait might surprise you. Our hypothetical embezzler is a woman, just two or three months shy of her 43rd birthday. She doesn’t have financial woes at home and she certainly doesn’t have a prior criminal record, but she might well have a gambling problem, expensive tastes or both. She also has her hands on the purse strings, possibly as a teller or accountant. And in just under five years, she will steal approximately $801,000.
That data comes from a recent report out of Marquet International that studied major embezzlement cases across the country last year.
Christopher Marquet, the company’s CEO, has been publishing the Marquet Report on Embezzlement for five years now. In it, he analyzes data compiled from employee theft cases in which at least $100,000 was stolen and tries to draw out a few reasonable conclusions from that information.
Last year, embezzlement was on the rise. Marquet culled 528 cases from the public domain, resulting in more than $735 million in employee theft. That’s more than 10 cases per week, and it’s also an 11 percent increase over 2011 and a 9 percent increase over 2009. And he doesn’t analyze cases from previous reports, either.
According to the report, the average embezzlement scheme lasts for 4.7 years before the perp is caught, so one could reasonably assume that many of the cases brought to light last year – either through an arrest or conviction – began around the time the recession hit.
In other cases, an embezzler may start out stealing small, regular amounts of money that simply go unnoticed during healthy, profitable times. When times get tough and the organization tightens its belt, the deed may be uncovered.
Since he began collecting this information into his annual report, Marquet estimates he’s analyzed close to 2,200 embezzlement cases across the United States.
Financial Institutions Hit Hard
Unsurprisingly, financial institutions tend to be the hardest hit by embezzlement, topping the list in terms of both the volume of money stolen and the number of cases: about $307 million and 80, respectively.
“They’re always the number one victim,” Marquet said. But he added, “This past year, credit unions for some reason were just hammered. Of all 80 cases, about a quarter of them were credit unions, which was a big percentage over the year before.”
Rob Kimmett, spokesman for the Massachusetts Credit Union League, was not about to draw any conclusions on that matter, however.
“We’re always unhappy to hear of any illegal activity going on at any credit union, but I’m not sure it’s particularly representative of an issue with credit unions as opposed to any other type of institution,” he said. “Some of these activities were going on for multiple years. The fact that they were uncovered or adjudicated in 2012, doesn’t point to earthquake-like activity that happened during a discrete period of time.”
Embezzlement also presents some interesting gender dynamics. According to Marquet’s five-year aggregated data, 62.4 percent of embezzlers were women and 37.6 percent men. But men, when they embezzled, stole significantly more: an average of $1.9 million compared with the $801,000 lady embezzlers averaged.
And while the prevailing narrative may hold that embezzlement is a crime of desperation, that doesn’t quite line up with what Marquet found.
While it’s the most subjective portion of the study, Marquet found that where a motive could be reasonably determined, a desire for a lavish lifestyle and a gambling problem, sometimes going hand in hand, were the two foremost motivations for embezzlement.
“It definitely runs counter to people’s expectations. Most people assume that when the economy turns bad, people start stealing. Our data supports that to a certain degree,” Marquet remarked. But more often than not, the embezzled money was used to fund expensive cars, lavish vacations or casino trips.
But there are many variables here: “What we’re looking at are cases of $100,000 or more. What happens down at the petty cash level? You never hear about that. Does that increase in hard times? Probably. It may be that some of these cases start out because of a hardship, but once the perpetrator realizes this is easy, they just set up a phony vendor and keep writing themselves checks over a period of time.”
Four out of six New England states showed the highest propensity for major embezzlement over the past five years, tabulated by dividing the total losses from embezzlement by that state’s GDP.
And while you wouldn’t be faulted for thinking that high technology would make an easier time of embezzlement, that’s another area of the study that also runs counter to expectations, Marquet explained.
“You see a whole variety of schemes, but it turns out to be a pretty old-fashioned fraud that’s the most common: forging checks and writing them to yourself.”
Email: lalix@thewarrengroup.com
