A recent article about a convicted Kiwi fraudster demonstrates the fraud triangle (described here) at work. Hohepa Morehu-Barlow claims his 14 year jail sentence is too harsh given that, while he defrauded the Australian state of Queensland out of more than A$16 million, the judge failed to consider the impact of the theft on the victim, which he believes is minimal.
His barrister argued that all but A$5 million was recovered and that remaining amount was just a small portion of the Queensland Health Department’s (his former employer) budget. The barrister even went so far as to claim that such an amount “was never going to have any significant impact on the people of Queensland” and that it could have been spent on administration or “re-carpeting offices“. This type of explanation that the fraud is” not that big of a deal” and “who did it really hurt” is the type of classic rationalization often used by fraudsters to justify their crimes. The fraud triangle is a relatively simple and well-established illustration of the factors that lead to fraud, namely the interplay of three forces: opportunity, rationalization and pressure.
In rebuttal, the barrister for the Crown was especially critical of the source of the pressure that led Mr. Morehu-Barlow to commit the fraud:
“The reason for the offending here was selfish. It was not to provide chemotherapy treatment for a relative who was ill….It was not a case of Robin Hood stealing from the rich to give to the poor. It was a man who wanted to live a lavish lifestyle, to drive a Porsche motor vehicle and to live in a multimillion unit.”
As often occurs, these other red flags suggested that the embezzler was living a lifestyle that exceeded his income. Mr. Morehu-Barlow had claimed that his lavish lifestyle was available to him because he was a Tahitian prince, which of course was not the case.
The Court of Appeals reserved its decision.
