Vermont has highest incidence of embezzlement in U.S.
By Rob Roper
A relatively new organization, Marquet International, has been compiling data on embezzlement across the U.S., and their findings are not flattering to the Green Mountain State. According to their research, “Vermont had the highest Embezzlement Propensity Factor,” and note that Vermont is just one of three states, along with New York and Oklahoma, to be on the list for three out of the last four years.
Why Vermont? State Auditor Tom Salmon, who is also a certified fraud examiner, has made fighting embezzlement a big part of his mission. He believes a culture of lack of oversight is at the root of the problem. Vermont has, “created too many weak environments in this state, and not addressed them. Poor audit results are a sign of weak environments, and weak environments are where potentially good people potentially do bad things.”
According to the Marquet study, the main reason people steal from their workplaces, either public or private, is to live a more lavish lifestyle than they would otherwise be able to afford. Pressing financial need, surprisingly, wasn’t a factor (unless you count a gambling problem as a pressing financial need).
Interestingly, most fraud takes place, or at least begins, in periods of stronger economic times rather than weaker. The reason is that employers are less vigilant when revenues are flowing freely, and tend to pay closer attention when times are tough.
The top four kinds of employers most likely to be victimized are financial services companies (that’s where the money is), healthcare, non-profits, and government. So, perhaps it makes sense that Vermont is at the top of the embezzlement lists given the fact that we have a high per capita percentages of state and local government workers, the highest per capita number of non-profits in the country, and spend more than average on healthcare.
Salmon contends, “The biggest deterrent to fraud is creating an environment where people perceive they’re being watched…. One of the things to do if you have an organization is let your employees know, in a nice way, look: we’re going to fully prosecute anybody who misappropriates assets because you’re not just stealing from the company, you’re stealing from your co-workers. We’ve seen businesses have to shut down – eight people lose a job because one person was stealing.”
Another controversial recommendation Salmon offers is eliminating the tradition of electing town clerks and treasurers and making those appointed positions.
Often we hear, and the healthcare debate comes to mind, that our little state can succeed where other states have failed due to the unique and superior character of Vermonters. But, what this shows is that we’re human, just like everybody else. In some ways, maybe more so.