Deception at Work

Investigating and Countering Lies and Fraud Strategies

Michael J. Comer, Timothy E. Stephens

• Publisher: Routledge
• Year: 2017
• Print ISBN: 9780566086366
• eBook ISBN: 9781351946001
• Topic: Business
• Subtopic: Business General
• Index: Business

Deception at Work tells you how to recognize and deal with lies, in meetings, negotiations, discussions and in writing. It is guaranteed to make you a more effective and confident operator, no matter what job you do. Simply leaving the book on your desk for others to see will improve your chances of not being deceived. The book exposes deception in all of its forms, linking the authors' 40 years of experience in dealing with fraudsters with the most recent findings on MRI scanning and the human brain. It explains how, why and in what circumstances both achievement and exculpatory lies are told, and how they can be resolved. It sets out a low key but effective plan for dealing with liars in all shapes and sizes, from confidence tricksters to malingerers and hard-nosed fraudsters. This ground-breaking work includes the most comprehensive summary of the clues to deception of any book currently in print.

PART

1

The Problem of Deception

‘THAT’S IT, POTTER, YOU’LL MAKE A GREAT ACCOUNTANT’

CHAPTER

1

Introduction

Lies are the truth to people who don’t know better

Lies in business

Most days of your life you are deceived. Think about it! No, please, really think about it. Take it on board at a conscious level: look upwards and to your left.¹ Deception is a really bad scene.

The cheque is in the post

A TYPICAL DAY?

You got out of bed, read lots of lies in the newspaper; watched the breakfast show, with people pretending to be happy early in the morning; walked to the station with your neighbour who told you he had just been promoted, when you know he had been fired; caught the train, but could not get a first-class seat because the compartments were full of fare dodgers; came into the office, spoke to your colleagues who said your new employee was doing fine, when you know he is not; received a call from Bill Smith saying that he could not come to work today as he was ill; attended meetings; approved a bunch of purchase invoices for payment; signed a few expense statements, some of which looked a bit dodgy; telephoned a customer who promised you the cheque was in the post; called your banker, but his PA told you he was in a meeting and would call you back; had lunch with a job candidate and then lost to him at golf because he cheated. You then returned home; spoke to the kids, who told you they had no homework and were going to a disco; watched television, read your emails and responded to them and then clambered into bed, pretending you had a bad migraine.

How many lies were you told during this very ordinary day? Did you do anything about them? Were any of them really important?

The fact is that most people would prefer to be deceived than be perceived as being distrustful

In the majority of cases, the lies you are told are insignificant, but sometimes they have very serious consequences. In his book Rogue Trader, Nicholas Leeson said:

BUYING TIME

‘I put the phone down. These conversations were always the same with Mary [Mary Walz was his functional manager whose career was seriously damaged by Mr Leeson’s dishonesty]. She tried to give me some kind of tough instruction, but I always deflected her so she ended with the promise of another chat tomorrow. This was fine by me. Each tomorrow I passed was another day … I just needed to buy time.’

When Tony Railton, an auditor from Baring’s head office, was sent to Singapore to sort out the trading positions, Mr Leeson said:

INCREDIBLE EXPLANATION

‘I wondered what Tony Railton had uncovered. My list of deceit was too long … it could have been anything from the Balance Sheet to the Citibank account or to the 88888 account. I waited for him. Then the penny dropped and then the millions dropped. I realised Railton was asking me a question rather than accusing me of fraud … and wrestling me to the ground in a citizen’s arrest. If he was asking a question he might not know the answer.

‘“It’s a consolidation account we use, something like the gross account reporting we do for you,” I said airily. This was all gobbledegook. He couldn’t possibly swallow this one. I put one hand out of sight below my desk and pinched my thigh to stop myself from laughing at my own idiocy. My explanation made no sense, but it was the best I could come up with on the spot and he believed it.’

For every credibility gap, there is a gullibility fill …

Fortunately you may never be confronted with someone quite like Mr Leeson but, just the same, there are hundreds of occasions every year when it would be to your advantage to extract the truth from people who don’t want to tell it. Whatever job you do, your success ultimately depends on your ability to sort out the good from the bad and to deal, effectively and politely, with deception.

Economic advantages of the truth

COST OF LIES IN FRAUD

Fraud in the UK costs taxpayers billions each year. Banks write off over £20 billion annually on loans they thought were good; credit card companies lose 4 per cent of turnover through card abuse, identity theft and skimming; the cost of recovering from a bad employee is around £50 000 per instance, and there are tens of thousands of them every year; companies lose between 2 and 5 per cent of turnover as a result of fraud, and even more by relying on inaccurate information. So what?

Principle: Never tell a lie, unless lying is one of your principles

Cost of Lies and Personal Liabilities

Increasingly managers are being held personally liable for their alleged errors and omissions at work. Despite everything, Barings, like many victims of catastrophic fraud, was a very good company. Many good managers lost their jobs and, in another banking case, the Head of Compliance – who was an honest, hard-working man – was banned from his profession for life. True, the good managers who lost their jobs did not ask the questions they should have, but it is easy to be wise after the event. So what?

Cost of Lies to Accounting Firms

Nearly every large accounting firm is now embroiled in legal action for alleged negligence in not recognizing the symptoms of fraud. The average claim per case is over $480 million. Arthur Andersen was put out of business with the loss of hundreds of jobs and many personal disasters. So what?

During 2002, following multiple scandals and false reporting by leading companies, stock exchanges throughout the world collapsed. One observer pointed out that accountants did far more damage to confidence in the financial markets than Al Qaeda. Pension funds have collapsed under the weight of false reporting, leaving an aging population exposed to poverty. So what?

COST OF POLITICAL LIES

Never has the public had such little confidence in our political leaders. The idea that truth can be ‘spun’ to mislead has become the norm and blatancy the benchmark. Case after case – of political leaders with their hands in the cookie jar – merely scratch the surface of corruption at the highest levels. This happens while the poorest members of society suffer.

Frauds in and against government bodies, such as the European Union, the Benefits Agency, and the Department of Health are totally out of...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of Figures
• List of Tables
• List of Mind Maps®
• Foreword
• Prologue
• Part 1: The Problem of Deception
• Part 2: Countermeasures
• Part 3: In Court
• Part 4: Golf
• Appendix 1: Suspects Checklist
• Appendix 2: Elimination Questionnaire
• Appendix 3: CIA Witness Statement Form
• Appendix 4: RIPA Analysis
• Index