--- title: 'Accounts Deceivable Podcast Series: Season 2, Episode 3 - A Matter of Fraud' url: https://www.medius.com/videos/finance-insights/accounts-deceivable-podcast-series-season-2-episode-3-a-matter-of-fraud/ updated: 2026-09-30T15:07:10Z --- # Accounts Deceivable Podcast Series: Season 2, Episode 3 - A Matter of Fraud What makes someone a fraudster? In conversation with two psychologists whose careers and research have seen them interview and work with many criminals, we take a deep dive into how and why people commit these crimes - and who might be their most likely victim. ### Transcript * * * Speaker 1 It's the vulnerable countries, the vulnerable organizations, and the vulnerable pieces within an organization that's where the the fraudsters are gonna focus on. Absolutely. Speaker 2 Welcome to season two of Accounts Deceivable, a podcast about a growing category of white collar crime, invoice fraud, and the devastating impact it has on people, companies, and communities. Through interviews with victims, perpetrators, and experts, this series uncovers some of the most infamous corporate heists on record and reveals how those responsible were brought to justice. In this episode, we meet Doctor Michael Skiba and Doctor Loretta Stallins, two psychologists who have dedicated their careers answering an important question: Why do people commit fraud? Doctor Michael Skiba is an international financial crime expert and co founder of the International Fraud Training Group. Thanks to his expertise in the psychology of corporate crime, Michael is known as Doctor Fraud. Michael has balanced his roles in academia and the financial industry for the last twenty two years. His work has encompassed researching criminal justice, law enforcement, and international crime to a more forensic focus on fraud and other financial crimes. In his words, this shift in interests was sparked by the stark psychological factors that made someone a financial criminal. Speaker 1 You know, by day, I was investigating financial criminals, you know, and and and I started it really started to pique my interest on the motivational factors behind them and how all this stuff that I had learned in PhD school and whatnot just didn't seem to apply to the financial criminal. Speaker 2 While Michael's investigations of financial criminals led him to try to understand their motivations, a different type of criminal activity was the spark for Doctor Loretta Stallins. Loretta is a professor of criminal justice, criminology, and psychology at Chicago's Loyola University. After receiving her Ph. D. In social psychology, Loretta began to study intimate partner violence, sex offenders, and sex trafficking. She interviewed over 150 pimps, madams, and sex traffickers to learn how they went about their criminal acts. But as she did so, she noticed similarities between this type of criminality and that employed in phishing and Internet fraud attacks. Speaker 3 There is no difference between a con game, illicit drug markets. My own research with sex trafficking, there's a lot of con and manipulation and lying and deceit and they omit to it. And it's the same tools as fault scams or white collar scams. Speaker 2 Loretta's research focuses on how people's emotions affect their behavior, both for the criminals and their victims. Speaker 3 The biggest myth, I think, out there is only people who lack intelligence will fall for these scams. That it's really how how humans make decisions. The fought are playing on that. Anyone can become a victim, right? But they don't report it, they think they're special. And it's sort of like, it's the same thing as in domestic violence or sexual assault. Victims rarely reported it until they were told, Hey, one third are victims. Speaker 2 The underreporting of crime is a problem Michael knows well. He believes that current crime numbers vastly understate the real problem. Speaker 1 Statistics are actually incredibly disturbing. And what I found pretty much wholeheartedly was even the statistics that are out there, you know, are not that they're not accurate, but there's just a lack of data gathering, a lot of lack of cooperation both, you know, across industries, across, geographies. So it's really hard to get a handle on it. And that's that's actually disturbing because we kind of really don't know, you know, what we don't know. Speaker 2 The numbers might not paint the full picture, but it's clear that cases of fraud are escalating. That growth has two sources. First, opportunistic criminals. The second, organized crime syndicates. Speaker 1 The opportunistic, fraudster is that is maybe someone that that, you know, wouldn't think about committing a crime. They don't have a malicious intent, maybe going into some sort of relationship with a business. There's more opportunities for them. But on the flip side of that, big organized crime groups, which drive the big numbers, the big dollars, the losses, the bankruptcies. What I found is even when I started my career, a lot of those groups focused on, you know, we we say those traditional organized crime such as, treason and kidnapping. Now, I mean, they focus on white collar crime because it's easy, it's scalable. They run these organizations and syndicates like businesses. Speaker 2 It was the opportunistic fraudster that Loretta first encountered on a much more personal level than she might have hoped for. Speaker 3 I was at two places, one as a graduate student and one as a professional. And both places had accountants that were embezzling. And the first one would always come up and say, Have submitted your such and such? Because I was a poor graduate student, I was meticulous about checking. But a lot of the busy scholars had retirement funds and stuff taken that he was using for yacht and things like that. Speaker 2 Loretta became fascinated with the concept of criminal motivation. What makes a fraudster? What are the circumstances that lead to a person seeing an opportunity to commit a crime? Why do people believe they can get away with it? Speaker 3 Basically, fraud is committed in this triangle. You have to have the pressures, the motivation, the opportunity, and then the rationalizations. The business culture itself allowed the competition, the ambiguous norms, allowed individuals to sort of rationalize and it also served as a motivation because of fear of failure. It's like the rationalization is if I don't do this, someone's going to get ahead of me. I'm not going to be the top person. Other rationalizations, first and biggest one is denial of responsibility. If you're talking about people in business, they'll say, I didn't know that it was illegal. I didn't know that I couldn't do this. This is what we do. Or I didn't think about it. Then denial of injury, invoice fraud is often about you're not seeing that victim. And the denial of injury, don't think about, oh, you're actually taking money away from the company, the perpetrators are thinking, ah, I'm helping make this company successful. At least the ones committing fraudulent financial statements to up their stock. Speaker 2 Pressures, motivation, and opportunity. All three have played a part in the stories we have heard in accounts receivable. Family problems and financial pressures are common justifications for opportunistic fraudsters. And since the pandemic, the new world of remote work has opened the door to more opportunity for people to steal from their employers. Speaker 3 First, victims are isolated, right? They can't go down the hall and say, hey, this looks weird. And second, our own remote isolation makes us less tolerant for other people's situation. We're not as thoughtful or caring and those victims are very distant and the company is very distant. So it's like, you're almost at the company, but not at the company. So it even reduces loyalty even more sometimes. Speaker 2 Remote work also gives crime syndicates more possibilities to commit fraud. Speaker 1 I remember, about a year and a half ago, I interviewed a hacker. Right? He actually was a counter hacker, and what he was doing is trying to figure out how others were were hacking in. Well, he got approached by a criminal element, and they offered him. They said, hey, just do the same thing that you're doing right now. You're not gonna know anything different. Here's a new laptop. The payments are gonna come in, but we're gonna quadruple your salary. So to this individual working in his office, in his desk, you know, in a suburb outside Chicago, he he didn't care. He didn't know because there was no connection. If that same individual got approached in person by a syndicate, if you work working in an office, I guarantee a 100% of the time that he he would not even have have, you know, taken a meeting or or even talked to them. Speaker 2 In that particular case, the compromised hacker was eventually caught, ordered to pay restitutions, and sentenced to ten years' probation. While tackling this type of criminal element may seem tricky for the average business, there are ways that companies can start to protect themselves. Speaker 1 I think some companies, what I find is that they want to showcase that they have strong fraud protection, that they have maybe designated units you know, looking into these things. Others are are the exact opposite, you know, where they don't want they don't want it known. They don't want it they don't want their customers to think that they're investigating them and kind of looking at their transactions behind the scenes. Speaker 2 Michael believes this fear of potential impact on the public perception of a company can be a powerful blocker to introducing checks and controls. Don Holm from accounts payable software company Medius explains why this can cause more harm in the long run. Speaker 4 Companies can believe that they're not at risk at becoming a victim of fraud, but all it can take is one error before serious harm can be done to a company's bottom line as well as their reputation. It's important for a business to understand the unknown, giving their accounts payable teams more visibility into fraud and risk exposures while ensuring policies around this activity are enforced. Speaker 2 The difficulty of assessing risk and attempting to understand the unknown are two very good reasons why training should be the cornerstone of all protective strategies. Here's Loretta. Speaker 3 My own research shows that cybersecurity training, for example, always focuses on what we call protective strategies versus vulnerable strategies. So protective strategies are like delete this email from an unknown person. It's not real, delete it. And vulnerable strategies are clicking on links, replying to the person directly rather than going through and checking to see, you know, are they real? That alone, that's what you typically get trained on, right? That alone will not cut it because the scammer is typically trying to raise anxiety and we differ on anxiety. And those with generalized anxiety typically will respond more quickly. If they open that email, then they feel pressure, particularly if it says, oh, it's their boss or higher up, those targeted emails. And they're not going to question an invoice then as well, right? For the same reason. That has consequences, particularly if you have social anxiety. Speaker 2 Fraudsters learn to manipulate natural human emotions like anxiety to increase their chances of success. Don Holm from Medius explains one principle that can help companies fight back. Speaker 4 As Loretta says, it's easy for people to feel pressured into signing off on fraudulent invoices they receive via email. That's why at Medius, we believe in the Four Eyes principle. That means that no one person alone should be able to create or sign off on invoices. Even in a technology system, you need something that will alert you to anomalies that will happen. Speaker 2 As well as adding checks and balances, Michael believes reframing employee training around the impact business fraud has on employees could make a huge impact. Speaker 1 Social engineering is the weakest link. And I think focusing on training and education and the damage it can cause a company is really the key. Because in those internal fraud scenarios where those those people go undetected for about a year and a half, that that's what statistics show the average is. If you do training, on how that affects your bottom line and how that's going to affect me and my four zero one ks, my performance bonus, guess what? If I know that John next to me is committing fraud, that's going to be a self motivator for me to go put my number in a hotline or just pass a note to someone and say, just take a look at this guy's transactions. Right? Speaker 2 Much like a fraudster may rationalize their actions, demonstrating impact to potential victims may help companies to be more secure. But are our expectations of who is most likely to be a victim of fraud in line with reality? Both our psychologists believe there's one group more at risk than others. Before that, a quick word from our sponsor, Medius. Speaker 5 Invoice fraud is costing businesses billions of dollars every year. As cyberattacks grow in sophistication, more and more companies are accidentally paying out thousands, even millions in bogus invoices. Medius is an accounts payable software platform that enables finance professionals to combat invoice scams by protecting the integrity of their supplier data, auditing the invoice process in real time and monitoring for insider fraud. For more information or a demo, visit [www.medius.com](https://www.medius.com/ "www.medius.com"). Speaker 2 How do fraudsters select their victims? Some might aim for a wide-ranging phishing attack on multiple targets. Others will research and target specific individuals. Speaker 1 By chance for an opportunistic fraudster or the organized criminal knows that's where the weak link is, maybe by some intelligence that they've gathered, and that's where they're gonna focus. So either way, the vulnerable countries, the vulnerable organizations, and the vulnerable pieces within an organization, that's where the fraudsters are going to focus on, absolutely. Speaker 2 But that weak link may not be the employee you would most likely expect. Both our experts believe that, whilst the popular opinion may be that the elderly are more obvious victims of fraud attacks, there is another group that is perhaps even more vulnerable. Speaker 3 In 2022, the Federal Trade Commission receives the reports in the US at least for Internet frauds. And young people between the ages of 18 to 25 or so are one of the most frequent victims. And, actually, there's no difference between them and the elderly. Speaker 1 They're the most tech savvy group out there. But two things. One, they are on devices and phones about 50 times more than the elderly population, which means there's more doors that are open. You know, you got your watch on, your phone, this, you're on your car, your smartphone. I mean, everything is just smart. That's all opportunities for the fraudster. So they embrace technology. They just leave more doors that could be opened. Secondly, what I found in and when I teach, their expectation of privacy is incredibly low online. So I would say the elderly, we kind of know that they're at risk, but I really don't see much attention at all to that younger segment, which I think is even more at risk. Speaker 2 It's not just the increased use of smart devices proving a new threat either. The rise of artificial intelligence is, for Michael, of particular concern. Speaker 1 Yeah. Three avenues, a deep fake, videos, voice cloning, and chat boxes. And these are really the focus now because the fraudsters can use, AI to just it's on the you know, talk about their return on investment. It's incredible. Incredible. That's really hard because, you know, we're trying to keep up with that from a preventative level, and it's it's it's just advancing at such an incredible rate. Speaker 2 But while fraudsters can use new technologies like AI for more complex fraudulent activity, AI can also be used for good. Don from Medius explains how the company uses AI as a defense against fraudsters. Speaker 4 At Medius, we use AI to underpin our autonomous accounts payable products. In particular, our new fraud and risk detection product uses AI to detect anomalies, fill gaps in your existing fraud process, and really give consistency for every invoice that is processed before the invoice is paid. Speaker 2 The fight against fraud will continue as new tools are developed to combat new threats. And it's with the help of experts such as Michael and Loretta that we can gain a greater insight into who is committing these crimes and find ways to stop them in their tracks. For more chilling stories from victims, fraudsters, and experts alike, check out the Accounts Deceivable podcast on Apple, Spotify, or wherever else you get your audio fix. ## Explore more: ### [Explore Medius Fraud & Risk Detection](https://www.medius.com/solutions/fraud-risk-detection/ "Medius Fraud and Risk Detection") De-risk your spend and gain visibility and control across the invoice to pay lifecycle. 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