Our conversation with Sammy Antar, the former chief financial officer of Crazy Eddie, Inc., and self-confessed possessor of a criminal mind, is so far-ranging that we are sharing it with our web readers in installments.
In today's installment, Sammy tells about the "Fraud Triangle," which, as you will soon learn, actually has four sides!
"It was developed by criminologists trying to study white collar crime," Sammy explains. "The first element is incentive. You may think that money is the incentive for economic crime; money is a byproduct of it. There is always a spectrum of reasons for crime.
"People commit crimes for a whole host of reasons. In Madoff's case, it could have been sheer ego--he didn't want people to know he was a failure--and, of course, the byproduct was money. It could have been because he liked the stature of being successful--some people commit crimes to get in the sack with someone."
The second element:
"Opportunity; your code of ethics limits your behavior but it doesn't limit ours. In Madoff's case, that came from lack of checks and balances. lack of effective oversight by the SEC.
The third element:
"It's called 'rationalization'--the idea that criminals rationalize their crimes. In white collar crime you're dealing with a highly intelligent individual. Studies show that between ninety-two and ninety-six percent of white collar criminals have no prior criminal record. You can estimate that the higher the economic value of a white collar crime, the less likely that the person has a criminal record."
Now Sammy tells us that this "triangle" has a fourth element:
"Capability--the experts went beyond the triangle: to be capable you have to be intelligent, to be intelligent you have to know right from wrong. We look at our criminal behavior as being no different from what everyday people do. There's no moral differentiation. We enjoy doing the crime; it's challenging. And, of course, the money is good. But that doesn't mean that money is always the primary factor. I knew what I was doing. I enjoyed it. It was fun!