MIND MATTERS

Is Fraud Contagious?

New research on the reasons people cheat and why some can resist temptation.

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  • Posted By: TheShulmanCenter @ 03/30/2009 8:13:30 AM

    I deal with fraud and theft on a daily basis in my work as the Founder/Director of The Shulman Center for Compulsive Theeft and Spending. See www.theshulmancenter.com. I also wrote the books "Somethiing for Nothing: Shoplifting Addiciton and Recoveyr" and "Biting The Hand That Feeds: The Employee Theft Epidemic... New Perspectives, New Solutions." Stealing and fraud are more common than we think. These behaviors are increasing. We need to understand them and challenge them and provide alternatives to justifying and rationalizing theft. Terrence Daryl Shulman, JD,LMSW

  • Posted By: dmac1289 @ 03/17/2009 5:11:15 PM

    This is stupid, after the actor proclaimed "I got them all " most of those kids thought "screw him" if he can do it so can I. It had nothing to do with cheating. The second example is equqlly as stupid. The actor says "is cheating allowed" The kids at this point figure the proctor is now watching them thanks to the actor. These popple have zero common sense.

  • Posted By: onemind @ 03/15/2009 8:20:15 AM

    It's interesting and makes sense. A college girlfriend told me her mother used physical examples to teach her lessons. One I recall her telling me was her mom set aside 2 bowls of fresh apples but added a rotting apple to one of the bowls. She covered them both and the next day showed her daughter what had happened. We all know what happens in that scenario.

    I suspect that people who choose finance as their major are more predisposed to greed and thus corruption. One might suspect that the motives for getting an MBA are in general different than those for getting a degree in biology. In any case, this again demonstrates the need for oversight and regulation in the marketplace which could be likened to the controlled environment of the classroom in the article. Madoff and the Wall Street decision makers have made that clear, pretty much unanimously by their activities. Unfortunately we are only now trying to close the barn doors after the horses have already gotten out.

    Another experiment might be valuable. From my experience there are people who while in a cheaters environment resist the temptation themselves to cheat. In that environment the honest ones are not only considered fools by their peers but are often ostracized as possible threats. Develop an experiment that might point out reasons a person would still not cheat in that environment even while under pressure to do so. It has always been disturbing to see that in our culture, a person who has gained wealth is considered successful even though that gain was ill-gotten. Weren't the Wall Street decision makers treated with adoration? They were called the masters of the universe even though in reality they were the disasters of the universe. Another facet is often seen where the people who by proximity benefit by ill-gotten wealth stick up for the one who is caught red-handed. Examples of this could be seen in the people showing up outside the courthouse in support of Michael Milken during his junk bond trial or in the supporters of mob bosses. They say people who lived in the immediate neighborhood of John Gotti said he was a wonderful person. Did they say this out of fear or because he took care of the neighborhood, or both?

    • Posted By: Mother Sarge @ 03/17/2009 12:01:44 PM

      as a finance major and now forensic accountant, I take umbrage at the suggestion that those who chose finance as a major are more pre-disposed to fraud. In my experience, fraud is committed by those who feel they are underpaid/undervalued and have the opportunity to commit the fraud with out being caught or the feeling that even if they are caught, they are above the law. This is not something found only in finance people...it is found in doctors who become drug users, it is found in judges who accept bribes, it is in those drivers on my morning commute who feel their need to be somewhere trumps the traffic laws. Each individual needs to speak up and say NO MORE....

  • Posted By: hfjessica @ 03/13/2009 11:04:19 AM

    Malcom Gladwell in his book titled "The Tipping Point" explain this same phenomenom of the "environmental contagion" and Pascal Boyer in his book titled "Religion Explained" also delved into the topic of innate and natural, inborn "morality code" ingrained into the human genome over the millions of years. So apparently their is a case for a "biological" explanation to cheating, but I am sure that 'free will' and the 'profit motive' still play a role in the cheater's mind set. But overall, normal, healthy humans are 'programmed' to be good and follow the Golden Rule.

    Harold from Florida

    • Posted By: Greg the Third @ 03/13/2009 7:36:09 PM

      I would argue that the mass effect is a result of a bunch of sociiopaths suddenly realizing they can get away with something. Either you have a conscience or you don't. Either that part of your brain works or it never does. When an opportunity to do something wrong to benefit yourself comes up a person with a conscience will never do it. I get nauseous, ill and regretful just thinking about commiting such an act when it goes against my conscience, much less doing it. I absolutely would not be able to keep it a secret and would confess quickly and without provocation if somehow I actually did something morally wrong. It amazes me how sociopaths can commit atrocious acts without thought, reflection or regret. The only time they show regret is when they get trouble because they got caught. The way sociopaths are kept in check is through rote conditioning, positive and negative reinforcement, in other words by laws and regulations with real punishment if they break the rules. If there is no oversight and especially if somebody else is getting away with it, they immediately jump into thoughtless and self-enriching action without any care about who gets hurt by it.

      • Posted By: onemind @ 03/15/2009 9:07:28 AM

        Greg...I'm reminded of a neighborhood kid where I grew up. He was a troublemaker. Many times some of us tried not to include him in our group but he simply would not go away. We were not even 12 years old when he would do things like the following. We would be walking down the street perhaps going to play ball or to the candy store. Suddenly and without any apparent reason or provocation this kid would kick over a neighbor's garbage can and run. I remember that momentarily I would consider picking up the can but when everyone took off running I'd follow, being afraid of getting caught and accused of having committed the act. Of course I should have picked it up. I would now :) I've often wondered what happened to that kid. I've even googled his name but with no success. I'm in my 50s and it's pretty normal that people of my generation have no web presence. I wonder if this kid eventually would up in prison, wound up being a bad apple in the workplace, maybe even running his own company, or if he grew out of it and is now an upstanding citizen. In any case I agree with you. We need laws and regulations. Otherwise, as we see on Wall Street, we are enabling sociopaths and also in effect making it more difficult for honest people to lead and prosper.

  • Posted By: newenglandblonde @ 03/13/2009 12:18:45 PM

    My sense after being in this systematic meltdown is this: Leadership values are a strong component in perpetuating lying, cheating and stealing, at least in a corporate environment. If honesty is not rewarded, but threatening to the leaders of any organization, it evokes fear of reprisal, hence the whole organization is affected by this visual condemnation. Last time I checked they called people who told the truth and outed "bad apples" "whistle blowers". That carried with it a lot of stigma and repercussions. Personally, I find it has become harder and harder to be honest. In fact, in my opinion, many folks don't even know the difference from years of justifying the lies and myths surrounding their own self-interest. To further that, most people work off of their own wants and desires, not what they need, which is far less than the level of style and privilege they enjoy. This country is so far away from reality it is scary.

    • Posted By: onemind @ 03/15/2009 8:57:11 AM

      newenglandblonde....For once a blond says something that makes sense! (only joking...sorry). Very well said!

  • Posted By: olderwiser @ 03/14/2009 3:57:02 PM

    By the same token, is virtue contagious?

  • Posted By: j2bryson @ 03/14/2009 7:02:12 AM

    Altruism is displayed in social species ranging from bacteria through humans. What this article is picking up on is variation in altruistic behavior being sensitive to social indicators of how likely the others around you are altruistic. Michael Taborsky first identified this as a theory, and has demonstrated it in wild-type Norwegian rats.

  • Posted By: voyager5 @ 03/13/2009 12:27:14 PM

    Cheating has apparently become rather common in education. I really don't understand. Through 8 years of high school and college, and then 4 years of medical school, I NEVER cheated, not even once! And I don't know any of my medical school classmates who did either. In medical school, it would have been virtually impossible for someone to cheat, and not be found out. As far as I know, my children never cheated in school either. (Their grades probably prove that) I think people can be trained at an early age that their integrity is far more important than any short-term gain they could receive by being dishonest.

    • Posted By: Greg the Third @ 03/13/2009 7:53:41 PM

      My Med school had a scribing service for those too hungover or lazy to attend classes and take notes during the first two years. It also had a service which provided you with old exams for any particular subject for a fee. Both of these services were approved and were widely used by the students, but not by all. This particular med school is considered one of the best in the region. The people who have to cheat to get by in high school simply do not have what it takes to survive pre-med and med school. You really have to be an intelligent and independent thinker even just to get into med school. The process is so challenging, fast-paced and diverse with so many exams that a cheater would not have the extra time they would need to pull it off.

  • Posted By: bingobang @ 03/13/2009 5:57:09 PM

    As animals, basically, humans share with the beasts the instinct to steal. Not to steal, is an idea, not an instinct, a product of human thought developed after the homo sapiens learned to speak. Not to steal is thus an acquired trait, the result of continuous suggestion, of deep conditioning by the society, in a way, a social inhibition. The moment the instinct overrides the inhibition, cheating or, theft happens.

  • Posted By: bingobang @ 03/13/2009 5:45:16 PM

    Being animals, basically, the humans share with the beasts the instinct to steal. Not to steal is an idea, not an instinct, a product of human thought after the homo sapiens learned to speak. Not to steal is an acquired trait, the result of continuous suggestion, of deep conditioning by the society, in a way, a social inhibition. The moment the instinct overrides the inhibition, cheating or, stealing happens.

  • Posted By: ayotide99 @ 03/13/2009 1:03:10 PM

    What are you all fussing about? This is America!!! The rich gets richer and the poor poorer. That's the way it has been and will always be. Nobody can do anything about that. The rich are very powerfil and can get away with just about anything. Let's face it. He will get out in no time and many lives are ruined and he will not pay back anything.

  • Posted By: rforzani @ 03/13/2009 12:23:07 PM

    You want something for nothing? You want what is "too good to be true"? You want to feel "exclusive" by investing with someone who doesn't just take "anyone's" money? Well, then, you are officially a member of the Bernie Madoff screwed me club, and I have little sympathy for you. Anyone checking the simplest bonafides of this guy would have smelled something, as did a number of non-investors. But those too lazy, stupid and exclusive to bother got their rewards. I actually admire the guy for having the chutzpa to to pull this off. Oh, he needs to go to jail, as do the rest of his thieving family, but you just gotta love the cojones of this dude. He made history and, except for an attack of conscience, could be on the beach in venzuela right now.

  • Posted By: olderwiser @ 03/13/2009 12:21:21 PM

    Madoff is being punished. The studies might have explored whether punishment of a cheater affects contagion. I doubt whether punishment of Madoff will inhibit the contagion of his theft to others, but it will certainly affect his ability to do it again. Wait! What's to keep him from opening a new business from his cell with a smuggled cell phone? His cell will hardly be shabbier than the office out of which he operated and a pencil and notepad will do for similar bookkeeping. I want to get in on the deal early and get out before the pyramid crashes. We are born every minute.

  • Posted By: etheredge1701 @ 03/13/2009 12:06:55 PM

    Anytime people rely on their own sensiblities and try to run their own lives, they leave themselves open to Satan and his demons. When we put ourselves in God's hands, and let Him run our lives, it makes us so much stronger. I, myself, could never do anyhting like Madoff did, because at all times it was hurting others intentionally. The reality of it is that his, and everyone's like him, soul is in dire need. As evil as the act he did was, we should condemn that action and not the man. No, that does not mean I think he should not go to jail, he absolutely should, but that we should all pray for his soul as it is obviously missing something vital. And while we are st it, we should also pray for all those people that were scammed; that they may receive comfort. and hopefully somehow be made whole.

  • Posted By: Stoner69 @ 03/13/2009 12:04:42 PM

    In the concommitant noise there is larger issue at hand. If we weren't going through this recession, Madoff and Sttanford would not have captured the public's attention as much as it does under the circumstances. Why have the rest of the crowd escaped this vindictive attitude? Ought Richard Grasso, Jim Cayne and their ilk not be in the grandstands? Wall Street has been exceptionally efficient in separating fools from their money for years. Face it, we have been had. Madoff and Stanford are just borne out this malaise that has gripped Wall Street for years.

    Are they cheaters by nature, or nurture? Maybe both. Besides, it matters little. My bigger questions is this; how come people were so foolish as to fall for their line; "I guarentee you a ..fill in the blanks.. return..". Pardon me, but is there not an old saying, "if it seems to good to be ture, it probably is". Come on, how could ordinary and extraordinary people be so foolish as to fall for this line.

    As much as the loss hurts, I would venture to say that all the people that put their money with Madoff and Stanford ought to be kicking themselves, not these two swindlers.

    Next time you give your money to others, may be you should do some due diligence, instead of listenting to the latest hot tip.

  • Posted By: ambaker49 @ 03/13/2009 11:27:35 AM

    We penalize cheaters like Madoff , if their crimes are larger than their abillity to hire sharp lawyers. But if it is an athlete on steroids, and they are helping our team win, and drawing big crowds, we simply give them more money. Barry Bonds brought the crowds for the Giants, and they turned a blind eye for years. Only when the athlete is too old, or too injured, do we finally hold them accountable for following the rules. When Michael Phelps finally quites winning medals, then we will finally say his drunk driving and drug use is wrong.

  • Posted By: hfjessica @ 03/13/2009 11:13:31 AM

    Malcolm Gladwell in his book "The Tipping Point" explained the phenomenom of the "environmetal contagion", and Pascal Boyer in his book titled "Religion Explained" explained the existence of the "moral code of ethics" which is innate in humans. Apparently, there is enough, peer-reviewed scientific evidence of a bilogical explanation for cheating. But I am sure that inspite and in addittion to biology, 'free will' and the 'profit motive' plays a role in a cheater's mind, keeping in mind also that there are medical and pyschiatric reasons for compromising behavior. Each situation has to be considered under it's own merits, but in marosociological sense, environment has a very strong influence on behavior. That has been proven time and time again.

    Harold from Florida

  • Posted By: Greg the Third @ 03/13/2009 10:52:42 AM

    This is an interesting experiment that confirms the obvious. If there is no oversight and enforcement, some people will cheat. In my estimation from my own personal experiences with upper level corporate management, about half will abuse priviledge when given the opportunity, which is nearly always due to the lack of proper oversight. The better question to ask is what prevented those who didn't cheat when others were cheating and getting away with it. Those that did cheat are simply sociopaths in action who in reality have no conscience and pretending every day to be civilized human beings. Such people will take advantage of any situation to benefit themselves without a second thought or feeling of remorse. The only time they feign remorse is when they get caught. The reason that there are laws, rulles, and enforcement is to prevent these kind of people from ruining the world as they enrich themselves. What law abiding citizens like Alan Greenspan, Congress, and the boards of many firms don't seem to get is that a high percentage of human beings behave this way. There is no way to predict who they are up front, but perhaps tests could and should be devised to detect sociopaths when they are hired. They can be rich and intelligent, like spouse abusers they are found in equal percentages in all socioeconomic classes. The difference between a rich and intelligent sociopath and a poor and unintelligent one is that one robs a bank by bamboozling the board for bonuses and stock options while running it into the ground while the other pulls out a gun and gets 30,000 at best from the tellers in the lobby. Guess which one gets the hard time in the federal pen if caught and which one is liiving on their yacht in Tahiti?

  • Posted By: Dale42 @ 03/13/2009 10:46:41 AM

    High sense of morality, ethics, conscience, and the integrity to maintain thise traits of character by unselfish choices is what makes the difference from person to person. Sadly, these qualities are rarely seen in society today, but they do exist. We just don't hear about these honest folks enough, because they are not out "tooting their horns"!

  • Posted By: M24K @ 03/13/2009 10:37:35 AM

    Ridiculous. Asking a question tempered their behavior? Of course! A big part of cheating is being able to get away with it! The study's conclusions are false.

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