For this article, we turned to “Gambling-related embezzlement in the workplace: a qualitative study,” by Per Binde, published in International Gambling Studies. This Swedish study analyzed reports pertaining to 55 cases of gambling-related financial workplace crimes and obtained further data from 18 interviews. Therapists, peer counselors, embezzlers in recovery from gambling, and specialists in workplace crime were interviewed. These sources were consolidated and reviewed for commonalities in cases of embezzlement connected to problem gambling. The following will discuss the findings of this study.
The Typical Problem Gambler Who Embezzles:
Interestingly, it is typical for problem gamblers to seem normal to close friends, family, and coworkers. Most problem gamblers are middle aged and have a family. They do not usually show signs of having psychological or social problems. They tend to be held in high regard by their employers and are trusted with company assets. This is what allows problem gamblers to embezzle from their organization. Addicts that turn to embezzlement typically do a great job of hiding their crimes in the beginning. It is not until the addict is completely helpless that he or she becomes sloppy in masking criminal activity.
Causes of Problem Gambling:
The study states that some people become problem gamblers after many years of healthy gambling. Although some problem gamblers have impulsive and sensation-seeking personalities, others become addicts after facing intense stress. Financial stress may lead people down the slippery slope of addiction if they believe that gambling will allow them to win the money they need to get by. If an individual loses money at first, he or she may continue to gamble believing that a win is just around the corner. Eventually, addicts are depleted of their assets but still see gambling as their only hope to someday come out ahead. In addition, addicts lose control over their strong desire to gamble and may find comfort from the act of gambling itself.
Turning to Embezzlement
Cases of embezzlement fueled by gambling problems share many common factors. These can be linked to the three points of the classic fraud triangle. As discussed in the study, the fraud triangle includes opportunity, need/pressure, and rationalization. As mentioned above, the problem gambler is typically trusted by his or her employer and have some form of access to company assets. Because of this, he or she has the opportunity to commit a financial crime. The gambler needs money to pay for basic living expenses or to maintain an image of prestige, thus they are pressured to obtain money by any means necessary. Finally, the problem gambler finds a way to rationalize his or her crime, usually by believing that the stolen money is just borrowed.
People who embezzle because of a gambling problem are often very ashamed of their addiction and their criminal activity. They do not want to confide in friends or support groups because they know that they can get into serious legal trouble and lose their reputation. As mentioned in the previous section, a key characteristic of this type of embezzler is the ability to rationalize taking company assets. This does not mean that embezzlers believe that what they are doing is right. Instead, they believe that they will eventually win and pay back their company. Even if embezzlers finally win enough money to pay back their company, it is not uncommon for them to gamble their winnings so that they can come out ahead instead of breaking even! Once again, the gambler throws themselves back into the cycle of losing money and embezzling to compensate.
Getting Caught and the Aftermath
The study discussed a pattern in which addicts will start to “give up” on hiding their crimes once they realize that they can never regain all the stolen money. It is explained that they experience great stress and guilt for their actions and are tired of living a criminal lifestyle. As mentioned before, people don’t suspect the gambler to be involved in embezzlement, so he or she must fake a normal life in front of everyone. When problem gamblers reach their breaking point, they tend to put less effort into covering up their crimes as opposed to directly coming forward to admit their actions. This is because they know that the aftermath will be ugly. Clearly, the problem gambler experiences internal conflict about how to fix the problem.
The study states that the embezzling gamblers are often relieved to be caught because they are so desperate to talk about their distress and to stop living a criminal lifestyle. According to the study, problem gamblers who have embezzled significant amounts of money but are in recovery, rarely repeat their offense. Such individuals remember how horrible life was at the height of their crime and do not wish to go back. That said, being caught often ruins their lives. Aside from incarceration and fines, embezzlers may lose support from people they considered to be close friends and family. Marriages often break down, and the convict struggles to find employment since he/she is deemed untrustworthy. In terms of the victim organization, it is often devastated financially and emotionally, especially when the organization is small. The organization may lose the trust of employees and customers and can even go bankrupt.
Implementing strong internal controls, and utilizing them, is essential to avoiding fraud. Even with your most trusted employees, trust but verify.