Big Personalities, Big Fraud


What if there was a way to narrow down a small subset of fraudsters who have access to millions, sometimes billions, of dollars? Michael Greelis and Michael Pocalyko, co-presenters at this year’s ACFE Global Fraud Conference, believe they may have found a key indicator that could help save organizations from devastating losses.  

In their educational session titled “Fraud and Character: The Psychology and Motivations of White-Collar Criminals,” Pocalyko and Greelis posed that there are two major personality disorders prevalent in high-power white-collar criminals that make this concept tricky to grasp — Narcissistic Personality Disorder and Antisocial Personality Disorder.

Only about 2% of the population are clinically diagnosed with either of these disorders, according to Greelis, a licensed professional counselor, and an even smaller percentage of the population display personality traits of both.

If we look at the Fraud Triangle and focus on the rationalization of this particular type of fraudster, the key factor to consider is that this group of individuals believe, “I deserve, therefore I take.” Greelis and Pocalyko broke down some key behaviors of each of the disorders and explained how they feed into this particular brand of rationalization.

Antisocial Personality Disorder
People with this disorder typically manage a normal presentation to the world, but it masks a nonstop process of evaluating their environment for opportunities to meet their deep-seeded needs — money, property and power. Antisocials, as they’re called, are able to size up situations quickly and manipulate people involved in those situations to cooperate with their schemes.

A few important characteristics to look at with this disorder, as they relate to committing fraud, are:

  • Quickly learns what is expected in different social settings
  • Sharpness and an ability to size up situations
  • Manipulative personality which is in covert conflict with society
  • Calculating but with lack of insight

Narcissistic Personality Disorder
Individuals with Narcissistic Personality Disorder, otherwise known as narcissists, are preoccupied with their sense of self and their appearance in the world. They are driven to suppress even the slightest appearance of inadequacy, and they not only desire but require positive reinforcement.

The key characteristics to focus on here are:

  • Preoccupied with self
  • Inflated sense of self
  • Underlying unexpressed sense of inadequacy
  • Seeks positive reinforcement from peers on a consistent basis at every level of life

With a disclaimer that they couldn’t make a clinical diagnosis, Pocalyko and Greelis then introduced attendees to four different fraudsters who demonstrate both of these personality disorders — Roomy Khan, Nathan Mueller, Martin Shkreli and Elizabeth Holmes.

After viewing each of the interviews, Greelis analyzed their behavior and pointed out key rationalizations and behaviors. Mueller, in particular, rationalized that he got obsessed with being the provider for his pregnant wife. Greelis pointed out that while Mueller mentioned his family several times throughout the interview, he never mentioned the expensive vacations and exorbitant purchases that his fraud funded. “These guys have all gone on a redemption tour,” Pocalyko said. “They want that public approbation.”

As they analyzed each fraudster, attendees could pick up on particular patterns. Pocalyko, CFE, MPA, PI, CA, CEO of SI, then posed this question: “Is there a way of recognizing the combination of antisocial personality disorder and narcissistic personality disorder to detect the propensity for someone to commit this type of white-collar crime?” He was referring to frauds that involve huge sums of money, the kinds that make headlines on major news outlets throughout the world.

Often individuals with both these disorders reach high professional levels in their organizations, and it puts them in the perfect position to enact devastating frauds. The presenters suggested that by studying and understanding these disorders, it could be an indispensable tool in spotting likely fraudsters and, in turn, prevent a crime before it happens.