December 22, 2014

’13 a banner year for U.S. embezzlers

Exposed embezzlements nationwide grew in 2013, but Connecticut and certain states and Washington D.C. appear to have greater vulnerability when it comes to this type of white-collar crime, a report says.

Insider theft of money, goods and services valued at least $100,000 by paid employees and volunteer workers at public and for- and nonprofit organizations numbered 554 reported episodes last year, up from 528 in 2012, according to the 2013 Marquet International Ltd. Report on Embezzlement.

"2013 was a gangbuster year for embezzlement in the United States, exceeding even last year's previous record pace, which we had called a blockbuster of a year for embezzlement,'' said CEO Christopher Marquet. This is the Marquet Report's sixth year.

Marquet said his firm had forecast a rise in reported embezzlements based upon the theory that more cases actually occur – and more cases are discovered due to greater stakeholder vigilance – in down economies. As a result, the 2014 survey due next year this time likely will show a decline in reported cases.

Among states, Vermont ranked highest among the top 12 in 2013 for the prospensity of the crime to occur. The ranking factors in, for example, the number of embezzlements that take place annually and each state's population.

Rounding out the most-vulnerable by rank are Washington D.C., West Virginia, Montana, South Dakota, Virginia, Idaho, Oklahoma, Texas, Missouri, Nevada and Mississippi.

Connecticut just missed making the most vulnerable list, checking in at No. 13, Chris Marquet said. Rhode Island ranked No. 18, while Massachusetts came in at No. 21 and Maine was 27th.

The 12 least vulnerable: Hawaii, Washington state, Arizona, Iowa, Florida, Maryland, New York, New Jersey, Alaska, Arkansas, New Hampshire and Wyoming.

Other observations and conclusions from the Marquet Report include:

  • Most major embezzlers begin their schemes in their early 40s (43.9, on average);
  • The average major embezzlement spans a 4.7 year period;
  • By a significant margin, embezzlers are most likely to be individuals who hold bookkeeping or finance positions (68.2 percent of all cases);
  • The financial services industry suffers the greatest losses from embezzlement (more than 28.8% of all losses in the data);
  • Nonprofits and religious organizations together account for nearly one-eighth of all the incidents (11.9 percent of all cases);
  • Women are more likely to embezzle than men (61.1% vs. 38.9% overall in the data);
  • Men embezzle significantly more than women ($1.8 million vs. $800,000, on average);
  • The vast majority of embezzlements are caused by sole perpetrators (nearly 85 percent of all cases);
  • Gambling is a clear motivating factor in driving some perpetrators to embezzle.

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