S2E21 - Gary Zeune | The Pros&The Cons: Why White Collar Crime Happens (&How to Prevent It) - a podcast by Peter Margaritis, CPA & C-Suite Radio

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 My guest today is a gentleman who knows more about fraud than just about anyone else in the accounting and finance profession: Gary Zeune, CPA, Managing Director of The Pros&The Cons.
 The Pros&The Cons is the only speaker bureau in the country specializing in white-collar criminals. His 40 plus ex-con speakers tell the stories of how and why they embezzled, took kickbacks, and cooked the books to the tune of up to $2.7 billion. His speakers include Mark Morse, a former CFO at ZZZZ Best; Paul Allen, an ex-bank CEO; and Dunlap Cannon, the largest real estate closing attorney in Memphis.
 But regardless of what kind of entity they worked at, regardless of the dollar amount, there are several really common elements between everyone who commits fraud – the biggest one being that they don't think they're going to get caught. To put it simply, ego gets in the way. 
So, why would someone be so stupid to think they aren't going to get caught? 
Well, consider this: have you ever broken the speed limit while driving? Everybody, including me and Gary, have done. It's illegal, so why do we do it? We do it because we think we're going to get away with it – just the same as somebody cheating on their expense report or cooking the books at the bank for $2.7 billion. 
People say, "Well, I'd never let that happen to me." Well, when you get in your car and you go on the freeway, most of us start going the speed limit. Then, you go two miles over. Then, you're three miles over. Then, five. After you're driving for an hour, you might be going 10, 15 miles over the speed limit. What happens is when your brain is bombarded by constant stimuli, the same stimuli, your brain becomes desensitized. 
That's why frauds always start little and get bigger, and bigger, and bigger. 
Most people think that there is a bright line on ethical behavior, but that's not the way it works. Ethics is not absolute. Ethics is situational. 
So you might think going just five or 10 miles over the speed limit isn’t so bad, but would you break the law by driving 30 or 40 miles over the speed limit? Most of us the answer is no, most of the time, but what about when you have a medical emergency and you're taking your child to the hospital? Your child's health and well-being is more important than you staying five miles over the speed limit, so you change your behavior and break the law even more because there's something more important to you in this situation than the speed limit. 
So, if you don't do something about fraud, it’s just going to grow – which also means you need to know how fraud works so that you can identify it. 
You may get an expense report for $1000, including a $12 fake cab. If you don't bust someone over it, assuming you catch it, and then make the punishment worse than the crime, they're going to do it again. “And it will get bigger, and bigger, and bigger. That's where it always starts.” 
Gary shares a number of great fraud stories in the episode, and you can learn even more by reading some of the following articles he wrote or contributed to: 
Scott London, Ex-Auditor From Insider-Trading Scheme, Is Out of Prison, Has a JobWhat do Fraud, Ethics and Strategy have in common?
Fraudsters in Demand as Speakers Amid White-Collar Crackdown - Risk&Compliance - WSJ
Prison-Bound KPMG Ex-Partner Remorseful for Insider Tips - WSJFormer KPMG Partner Scott London Speaks out Before Starting Prison Term - Accounting Today
WSJ Special Report - White Collar Criminals for Hire - From the Penitentiary to the PodiumConfessions of an insider trader on the eve of his prison sentence - WSJ MarketWatch
Forbes Former KPMG Partner Scott London Shares Cautionary Tale Before PrisonFormer KPMG Partner Scott London to Hold CPE-Eligible Webcast on Ethics Before He Goes to Prison for Insider Trading
Ever Thought, 'How Did He Get Promoted?' Here's How - WSJHow to Tell If Your Coworkers Are Using Their Manipulative Powers for Good or Evil - At Work - WSJ
What Corporate Climbers Can Teach Us - WSJ 
Resources:Learn more at http://www.theprosandthecons.com/
LinkedIn: https://www.linkedin.com/in/gzfraud/Facebook: https://www.facebook.com/gzfraud
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