Who commits fraud?

Organisational fraud is rarely the work of career criminals or obvious wrongdoers. Instead, it is often perpetrated by trusted, exemplary employees who have earned the organisation’s confidence over time.

These individuals, frequently long-serving and loyal, possess an intimate knowledge of internal processes, enabling them to exploit weaknesses discreetly while maintaining an image of integrity. Often referred to as “dysfunctional employees” they manipulate systems from within, leveraging their authority or access. The Association of Certified Fraud Examiners’ (ACFE) 2024 Report to the Nations highlights that most reported fraud cases involve employees with 1 to 5 years of tenure. However, the most financially damaging frauds are typically committed by those with over 10 years of service, who exploit the trust and deep operational knowledge they have gained.

Executives and senior managers pose a particularly high risk due to their ability to override controls and access sensitive systems, with managerial fraud often proving far more costly than fraud by lower-level employees. This reality challenges the assumption that fraudsters are inherently unethical. Instead, fraud often results from “good” employees making poor choices, driven by pressure, enabled by opportunity, and justified through rationalisation.

In the wrong environment, even high-performing, long-standing employees may cross ethical lines. While organisational fraud often originates internally, businesses now face a growing threat from external fraudsters who leverage technology to perpetrate schemes. Despite awareness of these risks, organisations remain vulnerable due to the diverse and evolving tactics employed by external actors, coupled with insufficient investments in technology and employee training.