Understanding Fraud Better: A Psychological Want Approach to Assessing Who Gets Conned and Why
Daryl Koehn, Wicklander Chair of Business Ethics and Managing Director of the Institute for Business and Professional Ethics (IBPE), DePaul University in Chicago
About the Seminar
While
much has been written about the checks and balances needed to curtail fraud and
about the mechanics of discerning it, far less has been written about what
might be termed the psychological logic of specific frauds. Why do fraudsters
get involved in particular forms of deceit? And why do people become victims of
some frauds and not others? The question is important because not every fraud
involves a desire to obtain money on the part of the victimizer or victim.
Other possible motivations include a quest for status, an attempt to preserve
one’s self-image or to ratify an impulse to harm others, a desire to avoid
being scapegoated, a wish to avoid shame, and so on (Zukoff 2005). Perhaps the
best way to understand fraud victims is as “people who want something”
(Heydenberg 2015, 31). If so, the question becomes: What do the defrauded
individuals want in some specific case, and how does that particular fraud
fulfill that particular desire? This paper argues that, at least in some
cases, the best way to understand the fraud is through the details of the
narrative accompanying the fraud. This narrative, I will argue, fulfills a very
specific psychological want of the fraudster. Since frauds involve
conning one or more other parties, a particular fraud’s narrative must also be
such that it appeals not only to the con artist but also to the “mark” or the
conned party. Close analysis of a fraud’s narrative reveals that the motivating
need or want of both sides of the fraudulent transaction is remarkably similar in
at least some cases.
After
a literature review showing that current approaches to studying fraud
victimization have not yielded much in the way of significant results, I take
up three frauds as case studies: a Holocaust fraud involving a quasi-feral child
narrative, Bernie Madoff’s Ponzi scheme, and the LuLaRoe multi-level marketing
pyramid scheme. I argue that these frauds were successful in conning specific
groups of people because the explicit and implicit logic of their narratives
resonated with beliefs and wants shared by fraudster and defrauded alike. While
this highly specific congruent linkage may not be establish able in every case
of fraud, the proof of this approach would be in the pudding. Unless and until
we take seriously these congruent resonances, we will not know to what extent
this psychological want-narrative approach can yield unsuspected insights into
the mechanics or dynamics of fraud. This paper opens up a sizable new area for
further research.
About the Speaker
Daryl Koehn is
the Wicklander Chair of Business Ethics and Managing Director of the Institute
for Business and Professional Ethics (IBPE) at DePaul University in
Chicago. She has published widely in the fields of ethics, political
theory, and corporate governance. Her monographs include The Ground of
Professional Ethics; The Nature of Evil; Rethinking
Feminist Ethics; Local Insights, Global Ethics; Living
with the Dragon: Thinking and Acting Ethically in a World of Unintended
Consequences; and Toward a New (Old) Theory of Responsibility.
Edited volumes include Corporate Governance: Ethics across the
Board and Ethics and Aesthetics in Business Ethics.
Her new book Ethics Without Dilemmas is slated to be out in
2022.
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