Fraudster Profiling Techniques

If you know what to look for, you can catch fraudsters before they run the same playbook again. Here’s what we’ve seen work across marketplaces, delivery, gig platforms - anywhere repeat abuse is a problem: ✅ Look beyond the signup Email, phone, device - those are just the wrappers. Start by tracking how new accounts behave in their first few sessions. ✅ Watch for recycled patterns Same sequence of events. Same order flow. Same timing. Bad actors reuse what works - often down to the click. ✅ Link accounts through behavior, not just static signals Did this user skip the same steps as a banned one? Visit the same pages, in the same order, from the same geography? That’s a fingerprint most tools can’t see. ✅ Don’t rely on manual review to connect the dots If it takes your team hours to flag a ban evader, they’re already on to the next account. Use automation to prevent their return. ✅ Use one central view across login, payment, and post-transaction abuse Fraud lives between silos. If your data is stuck in separate systems, you’re always two steps behind. Stopping fraud once isn’t enough. The real win is keeping them out for good.

The Evolution from Triangle to Pentagon: In my years of experience as a forensic practitioner, I've encountered countless white-collar crimes, often orchestrated by mid to senior-level employees entangled in conflicts of interest, bribery, and corruption. Traditionally, the fraud triangle—pressure, opportunity, and rationalization—has served as our guiding framework. Yet, recent investigations have illuminated the critical importance of two additional elements, transforming our understanding into the fraud pentagon. The fraud pentagon emerged as an evolution of the fraud triangle, recognizing that fraud is not merely a product of situational factors but also deeply influenced by personal attributes. These two additional elements—Capability & Arrogance/Personal Ethics—were introduced by Brent Arnow and David T. Wolfe in their seminal 2004 paper, "The Fraud Diamond: Considering the Four Elements of Fraud." They posited that understanding the personal traits & psychological dimensions of fraudsters provides a more comprehensive view of fraudulent behavior. Let me share a story that illustrates this transformation. We recently unraveled a case in the #Auto&IM sector involving a mid-level manager who had been colluding with vendors, exchanging lucrative contracts for personal and financial favors. Initially, the fraud triangle helped us understand the basic motivations: 1. Pressure: His mounting debts and financial obligations created a pressing need for additional income. 2. Opportunity: Lax oversight in the vendor selection process presented a tempting gap to exploit. 3. Rationalization: He convinced himself that he was merely taking what he deserved for his hard work and dedication. But soon after I interviewed the accused, it was the fraud pentagon that brought the full picture into sharp focus: 4. Capability (Ego Strength): His role afforded him the knowledge and access to manipulate the system without raising suspicion. This wasn't just about opportunity; it was about his specific ability to execute the fraud. 5. Arrogance/Personal Ethics (Superego and Moral Compass): An inflated sense of self-worth and a distorted moral compass led him to believe he was untouchable, above the rules that govern ordinary employees. "Putting the Freud in fraud," we see the psychological depth and complexity of these elements. This manager's capability and arrogance were not mere coincidences; they were integral to his fraudulent behavior. His ego and ethical lapses allowed him to rationalize his actions, while his skills and position enabled him to carry them out. The fraud pentagon isn't just a theoretical expansion—it's a practical tool that reveals the intricate psychological mechanisms driving fraudulent behavior. By applying these additional dimensions, we can enhance our ability to detect, prevent, and address frauds and white collar crimes. #FraudPentagon #ForensicInsights #WhiteCollarCrime #EthicsInBusiness #FraudDetection

A few years ago, I discovered a $250K promo abuse ring by accident. I noticed something odd: Perfectly normal-looking customers were hitting our 'limit 1 per household' promos exactly 14 days apart. Not 13. Not 15. Exactly 14 days. It was 3 AM, and I couldn't let it go. Something felt wrong. So I dug deeper. These "customers" had flawless order histories. Perfect progressive spending patterns. Everything looked legitimate on the surface. Too legitimate. That's when it hit me The fraudsters were carefully building account histories to fly under the radar. The pattern was beautiful in its simplicity: → Create accounts → Build perfect order history → Wait exactly 14 days → Hit the high-value promos → Scale to hundreds of accounts By the time we caught it, they had scaled to 500+ aged accounts. We rebuilt our entire detection around lifecycle patterns: → Account aging signals → Order progression metrics → Network connection mapping → Behavior pattern analysis The fraudsters are still out there, still trying. But now we know what to look for. And our promos actually drive real growth instead of funding abuse networks. Every time I see a "too perfect" order pattern now, I go back to that 3 AM discovery. ps... If you’ve been wondering how to protect your promos and keep things running smoothly, I'm sharing even more in tomorrow's Fraud Friday chat https://lnkd.in/eEHQ-BXG See you there

🚨 Fraud Fighters Weekly: Inside the Mind of the Fraudster 🚨 This week, I’m taking you inside the psychology of fraud. Before the paperwork, before the claim, it starts with mindset—and if you know what to look for, you can spot the deception early. This issue is packed with the behavioral red flags, interview tactics, and profiling tools I’ve relied on for years while building one of the country’s top SIU teams. From the opportunist padding a claim to the predatory fraudster running a full-on scam, recognizing how and why they lie can make or break your investigation. 🧠 Top 3 Takeaways: Behavior Reveals Intent – Look for red flags in language, body language, and claim patterns before the facts even line up. Use Psychological Triggers – Silence, repetition, and baseline behavior shifts expose more than direct questions ever will. Profile the Fraudster – Entitled, narcissistic, or evasive? Their personality tells you how to press and where to dig deeper. Next week, I’ll break down surveillance strategy—timing, tech, and how to build footage that holds up in court. Want a cheat sheet with key red flags from this issue? Reply “RED FLAGS” and I’ll send it over. Until then, stay sharp and remember: the smartest fraudster can fake a story—but not their behavior. #FraudFightersWeekly #InsuranceFraud #InterviewTips #BehavioralCues #SIU #FraudDetection

Fraud Shapes Series Day 3: The Fraud Diamond The Fraud Diamond was introduced by David Wolfe and Dana Hermanson in 2004. They expanded on Donald Cressey’s Fraud Triangle by adding a fourth element to explain the personal connection to how fraudsters commit crimes - and which people are most likely to become fraudsters. It identifies four key elements that must be present for fraud to occur: Pressure, Opportunity, Rationalization, and... ➡️ Capability: the fraudster has the skills, confidence, and personal and emotional capacity necessary to exploit weaknesses and commit fraud. Wolfe and Hermanson argued that even with the other three elements present, fraud will not occur if the fraudster lacks the capability to follow through. Here’s how this fits together: 1️⃣ A trusted senior employee notices a gap in vendor verification procedures and knows they can exploit it without detection. 2️⃣ They’re under significant pressure to pay off mounting medical bills for a family member. 3️⃣ They rationalize their actions, thinking, “I’ve worked here for years, and I deserve this after all I’ve done for the company.” 4️⃣ Their deep knowledge of internal systems and authority gives them the capability to manipulate vendor payments undetected. Additionally, they are known for being persistent in the pursuit of what they think is important, creating a strong emotional and personal connection to their actions. 💡 Key Takeaways: Strong internal controls eliminate opportunities. Transparent workplace cultures and employee resource programs help employees manage pressure and minimize rationalizations. Oversight, even for senior employees, reduces the chance of capable fraudsters acting on weaknesses. ----------------- I'm Anna. I post content on how accounting firms can protect their clients from fraud using traditional prevention tactics, financial analytics, and AI. Follow me to learn how you can keep your business clients safe from fraud! #FraudPrevention #Accounting #CPAs #AccountingandAccountants #FraudDetection #FraudFighters