The presentation explores the psychology and behavioral patterns behind fraud, using historical and modern examples to show how perpetrators exploit cognitive biases. It starts with the case of Leo Koretz and then breaks down six persuasion techniques: commitment/consistency, social proof, reciprocity, liking, authority, and incentives. These elements are revisited in the context of Sam Bankman-Fried and FTX, showing how even sophisticated investors were influenced by perceived altruism, elite endorsements, and the illusion of credibility.
Fraud detection is more behavioral than analytical. Key red flags include evasive management behavior, over-promising, abrupt strategy shifts, and executive churn during crises (“Stress Fracture Theory”). A typology chart categorizes fraud by type—corruption, asset misappropriation, and financial statement manipulation—with detailed sub-schemes. Most occupational fraud is uncovered via tips (42%), primarily from employees (55%), highlighting the importance of whistleblower channels over traditional audits. The presentation concludes with reminders to think like a crook, question narratives, and stay alert to psychological manipulation—not just bad math.
Presentation summary generated by ChatGPT