Who Commits More Fraud? Is it Men or Women?
In this episode of Fraud Busting: Body Language Expert Traci Brown Interviews Kelly Paxton, Pink Collar Crime Expert and you’ll find out about the Fraud Gender Gap and some amazing fraud stories you’re not going to want to miss.
Here’s the Transcript
Traci Brown: Hi, I’m Traci Brown, the fraud busting body language expert. I am so excited because I have Kelly Paxton here with me today. She is – let me get this right – the pink collar crime expert. Is that right, Kelly?
Kelly Paxton: That’s right.
Traci Brown: I just had to know more about her and wat she does and how she helps companies find an eliminate embezzlement. What is it, like 80% of companies have some kind of fraud loss? And a lot of it is embezzlement. I’m sure she’ll have some better numbers for us. Kelly, tell us a little bit about you.
Kelly Paxton: I’m going to say my career is, like, all about money. First it was investing money. I was a stockbroker and a bond trader, and then I became a federal law enforcement agent and was investigating people who were committing crimes for money. Crime is really about money, unless it’s domestic violence. Now, kind of my third career is how honest people make bad decisions to get money, to live the life that they think that is going to be better, but it actually isn’t. My whole career has kind of been about investing, tracking money, and now it’s just more learning people’s relationships with money and what it makes them do.
Traci Brown: Oh, okay. Let’s talk about pink collar crime specifically. I’m so curious. What is that?
Kelly Paxton: Okay. It was popularized in 1989 by Dr. Kathleen Daly. It’s not my term. I have the domain name. But the definition is petty crimes committed by workers, lower level workers stealing small amounts from their workplace, primarily women, but it’s not all women. I’m also known as the fraud#queen. You’re the fraud body language. I’m the fraud#queen. One of my things is: It’s position, not gender. Women are just really good at it because they’re in the lower level positions.
Traci Brown: Why do you think women are better at committing fraud? Tell me about that and why are they better than the guys? Who takes more? Tell me all about that.
Kelly Paxton: The women are better at it because people trust them. It’s socialization. It’s just like when we say “bad guys”, we don’t say “bad ladies.” We say “bad guys.” We intuitively trust women more than we trust men. There is no honesty chromosome. That’s even crazy to think of about. It’s like, oh, she’s nice. She’s worked for me forever. She lives a modest existence. She doesn’t show up in a Maserati, but she does show up in a Camry now instead of a Corolla. Women are good at it because they just kind of fly under the radar. I have three things: (1) There is no honesty chromosomes. (2) The workplace has changed. (3) Never underestimate a woman.
Traci Brown: Oh.
Kelly Paxton: They might rob you blind.
Traci Brown: They might rob you blind. They might do a lot of other things too. Alright, Kelly, let’s got to it. What is the craziest fraud story you’ve ever been involved with? What happened? Tell us all about it. Then, let’s talk about how people, businesses, can prevent this and learn so that they don’t have to experience the same loss.
Kelly Paxton: Sure. I worked one case at the sheriff’s office. Out of all the cases I’ve worked, this is the only victim who said he had never liked her. Everyone else, they liked the person and that’s part of the recovery is they’re devastated by it. But this guy was a doctor. He owned a vineyard and a winetasting room. He had this young woman. Her name was Tiffany. This is all public record. She left the business, and he noticed on his credit card that she had made two purchases at like Staples and OfficeMax. He was angry. They were $400 purchases. He calls the local sheriff’s office and he says, I want to make a theft report. This employee stole $400 from me. A deputy comes out, takes the report, and we get involved, the fraud team. She stole $450,000 from him.
Traci Brown: Oh.
Kelly Paxton: He said, I never let he sign a check. Well, she didn’t need to sign a check. Because he had a winetasting room, they had a Visa processing machine – this was a while ago – so she could put refunds on her credit cards. When I meet the owner of the vineyard, he said, you know, I have a winetasting room. No one should have refunds. You taste the wine and you like it and you buy it. You don’t like it; you don’t buy it. I shouldn’t have any refunds. I’m like, well, she was refunding all day long and it was $450,000. But he’s like the only one of my victims who said he didn’t like her. They all like them. They’re all the trusted employees.
Traci Brown: Wow. Was she in charge of reconciling as well? How did all that come together?
Kelly Paxton: He was kind of an absentee business owner. He was a doctor, so he had a practice and this was kind of a hobby. She was like an office manager, but she also helped out in the tasting room. She sold wine and stuff like that. She had free reign because he had another business. This was a side hustle for him. His daughter was kind of involved, and that’s kind of when it started. Once his daughter fully got involved when she left, then they’re like, things don’t look right. Yea. But he initially thought, he’s like, I’m going to get here because she kind of left him in a lurch. She didn’t give him notice or anything. He’s like, I’m going to get her. She took $400 from me. Yea, $450,000.
Traci Brown: Wow. So the $450,000 didn’t have anything to do with Staples. It was just all from the tasting room. On Square and things like that, can people still do that now?
Kelly Paxton: No. I don’t believe they can. You can only refund back to the credit card that made the payment. Because this was in like 2008/2009. They’ve definitely made progress as far as fraud controls, but there are still a lot of things that you can do. Whenever I meet a business owner, he or she is like, I sign all my own checks. I just smile. They’re like, what’s that about? The most way, according to the Markay Report on Embezzlement, that people embezzle is forged or unauthorized checks. I know a woman who worked for a company business, stole $350,000. She could never forge the President’s signature, but she could forge his younger brother who was the Vice President, so she forged his signature all day long.
Traci Brown: Wow.
Kelly Paxton: She was like, I could never do the President’s signature. It was very difficult, so I just forged the brother’s.
Traci Brown: Well, that’s clearly the next best thing. Okay. Let’s say I had a business. I have a business. You have a business. What should we be doing and the folks watching this? They sign all the checks. They think they’ve got it handled. What’s the solution?
Kelly Paxton: One of the solutions is to always mail your bank statements home or to a P.O. Box that only you control. Because I can make your bank statement look like $10 million with a PDF. It’s very easy to manipulate with technology these days. Mail your bank statements home. The other big thing that I like to tell business owners is surprise your staff and not surprise them by giving them a Starbucks card, but like if you always do stuff on say the last day of the month, mix it up and say, hey, I want that report mid-month. There was a woman who stole from a city. She knew the auditors only looked at June. She’d steal every year up until May 31st, go cold turkey for the month of June, and start again July 1st. Mix it up. Don’t do the audit in June. Do it in October. Just keep your staff on their toes, I would say.
Traci Brown: Got it. Got it. Okay. I can keep my staff on their toes now. Okay. You got any other just unbelievable type stories with some lessons for all of us? That was fantastic.
Kelly Paxton: I have another one where I call it the fat finger caper. There was a woman. She owned a business with her husband, and she would sign the checks. Then she would go online and she’d see, okay, a check for $2,500 cleared, for $4,500 cleared, but she would never do the image because she’s like, I signed them and I know the $2,500 one was made to XYZ. One day, literally, she got fat finger and she clicked on View Image and what popped up was that $2,500 check. It wasn’t made out to XYZ. It was made out to the bookkeeper. She had changed it, literally changed it. Again, fat finger, it all unraveled because one day she accidentally clicked on View Image. She would go online and she was very diligent. She would go online and she would see that certain checks has gone through but the banks don’t do the images.
Traci Brown: Oh, wow.
Kelly Paxton: Yea.
Traci Brown: How much did that add up to? Do you know?
Kelly Paxton: A half a million dollars.
Traci Brown: Oh, man. Just right there. Now the average length of time of fraud is about, like what, 16 months or so?
Kelly Paxton: Yea, but women do it longer.
Traci Brown: Oh. Longer now? Okay.
Kelly Paxton: Men steal much more, much more quickly. Women steal less over a longer period of time.
Traci Brown: Oh, now that’s interesting. We just have to watch out for everybody these days. Okay. Anything else that our viewers here need to know? That last tip that can really save them piles and piles of money?
Kelly Paxton: You know what, this has made me crazy. Vacations. Make sure your employees take vacations.
Traci Brown: Yep.
Kelly Paxton: Some of the biggest frauds have been discovered while the employee can’t make it into work. There was a woman actually, she got in a car accident in Utah, and the cops came, and when they were investigating the car accident they saw all these checks from a dental office and sure enough she had worked for the dental office and she had a bunch of blank, signed checks in her car waiting for her to deposit them. Make them take vacations, and none of these micro-vacations. The newer, younger generation, they take micro-vacations. Uh-uh. One to two weeks at a time. Because if you’re gone two days, no one’s going to look at your stuff. You’re going to say, I’ll catch up when I get back. If you’re gone a week or two, they’re looking at your stuff.
Traci Brown: Wow. I knew that in banking that’s part of compliance in banking.
Kelly Paxton: That’s because of Burnice Geiger. Burnice Geiger stole $2.1 million from her dad’s own bank. She went to prison. She got out. The rumor is that she consulted for a federal regulatory agency, FDIC or the precursor to it. She looked at everyone who wasn’t taking vacations because she couldn’t take a vacation because if she did, they would have caught her scheme. She started looking at the people who hadn’t taken vacations and then she would go after them and look and see if they were stealing.
Traci Brown: Yep. It turns up. It’s real common, real common. Wow. We have learned so much. Tell us how you can help, how can people get a hold of you. Tell us a little bit about your services. I know you do some speaking, but what else do you do? How can people find you?
Kelly Paxton: Pinkcollarcrime.com or KellyPaxton.com. I’m also on LinkedIn. I post regularly. I have a new column that I’m loving called #FridayFraudster. It’s going to be a story of a person who got caught embezzling. I’m working on the episode for this week. Also, I’m on Twitter. It’s PDX, like Portland’s airport, PDXCFE, for certified fraud examiner. I tweet quite regularly on Twitter. There is a Pink Collar Crime Facebook page too, not as regular there.
Traci Brown: Got it. I’ve got to tell y’all, make sure you connect with Kelly. She just put a couple posts, or comments even on my memes that I put up, just awesome, awesome tips. She really knows her stuff. Make sure you find her. Kelly, thank you so much. I think we should have you on again.
Kelly Paxton: Oh, thank you. I am absolutely honored. You do fantastic work, and I’m just honored to be here. I’d love to come back.