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The Mindset of a Fraudster

Rationalization and personal integrity are key factors in considering the potential for fraud. Read on for insights into the fraudster mindset.
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A “mindset” can be described as the established set of attitudes held by someone.1 In the case of the mindset of fraudsters, or fraud perpetrators, it can include the ability to rationalize their actions and level of personal integrity. This article will examine the fraudster thought process based on what our professionals have observed.

There are three aspects to fraud, often referred to as the “fraud triangle”: pressure, opportunity, and rationalization.2 When thinking about the mindset of individuals who commit white-collar crime, their rationalization is what stands out. In addition, most anti-fraud professionals know that personal integrity can be weighed—along with other factors—to assess the probability of fraud. That model is called “the fraud scale.”3

Understanding rationalization within the mindset of a fraudster may seem easy. A person undergoes outside pressure, essentially backing them into a corner. They see an opportunity to relieve that pressure and come up with a way to rationalize their behavior.

However, rationalization is largely unobservable before the fraud occurs, and it does little to advance the concept of predicting who will commit white-collar crime. (Note: There are interviewing techniques wherein the interviewer provides the rationalization for the interviewee.)

Understanding personal integrity is slightly more important in terms of predicting fraud and who might commit it. Some theorists believe that personal integrity is more observable and, thus, should play a larger role in predictive analysis. Those theorists say the benefit of considering personal integrity is that—by observing both a person’s decisions and decision-making processes—their commitment to ethical decision making can be assessed.

Nonetheless, predicting who is going to engage in white-collar crime before they commit the crime is difficult, if not impossible. In other words, the mindset of a fraudster is difficult to profile. For example, an individual who has never acted unethically may find themselves doing so when other factors are in play. There is usually more than just a person’s poor integrity that leads to fraud—it’s also the features of the environment or circumstances that steer an individual to commit fraud.

Everyone experiences different pressures, and everyone relieves or copes with those pressures in different ways. This is another reason that profiling a fraudster is difficult: people can think independently, and everyone thinks differently. The pressure to solve a problem does not affect everyone identically.

Nobel prize winner and laureate Murray Gell-Mann once said, “Think how hard physics would be if particles could think.”4 People do think and people do respond, and they respond differently to different types of situations.

Furthermore, many characteristics of a fraudster, such as being extremely controlling in the workplace, exhibiting a “wheeler-dealer” attitude, and close association with vendors and customers, also are frequently referred to as characteristics of successful businessmen.

Attempts at profiling a white-collar criminal are interesting, but there are too many factors and variables to reliably do so. In most cases, fraudsters simply end up breaking the law because they keep stretching the limits of permissible activity—a statement that supports the importance of deterrence.

Our expert witnesses at FORVIS have a wealth of knowledge on a variety of topics and offerings related to fraud, litigation, and forensics matters, and attention to detail is in our DNA. Let’s explore how we can best serve you. If you have any questions or need assistance, please reach out to one of our professionals.

  • 1"The Power of Having a Growth Mindset Versus a Fixed Mindset,", March 12, 2019.
  • 2"The Fraud Triangle,"
  • 3"Accounting Scandal/Fraud Theory,", November 1, 2021.
  • 4 “A Dozen Lessons from Murray Gell-Mann that Apply to Business, Investing and Life,”, September 16, 2017.

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