Coughlin Broke the Mold
by October 25, 2011 2:37 pm 87 views
Tom Coughlin, the former vice chairman of Wal-Mart Stores Inc. who pleaded guilty in 2006 to embezzling from the company, didn’t fit the profile of the typical fraudster, four researchers wrote in the current issue of Fraud Magazine.
The forensic “fraud triangle” of motivation, opportunity and rationalization doesn’t adequately explain Coughlin’s actions, the authors wrote.
“Risking a $6 million compensation package, as well as the shame and related consequences, for a few hundred thousand dollars over a five-year period seems irrational,” the article states. “Coughlin’s behavior also is inconsistent with the fraud triangle model, developed in the mid-20th century, because the motivation for this fraud did not appear to be caused by … financial pressure.”
The University of West Virginia and City University of New York researchers say a new forensic accounting model is needed to better detect and deter fraud.