Fraudsters: Turn Yourself In

Pull off the band-aid!

This is what Unsplash thinks “fraud” looks like. Photo by Bermix Studio on Unsplash.

I think more people who commit fraud should turn themselves in.¹

In Lying for Money, Dan Davies writes:

A shoplifter or robber can carry out one or two thefts and then take a break; avoiding capture for a blue-collar criminal is just a matter of trying not to be the person who is connected to the crime. An embezzler, though, or a rogue trader or a tax swindler, has to cover up the existence of the crime itself. That means that it’s very difficult to be a one-time-only embezzler. The original crime creates an ongoing need to commit a series of further crimes, usually growing in magnitude. Small-time white-collar criminals often burst into tears of relief when they are finally captured. As Leslie Payne put it:

Often these businesses, run by people of rare energy and intelligence, could have been very successful. There is nothing sadder in some ways than the managers of a fraudulent firm who then find they have a commercial success on their hands. They try desperately to repay their first plunderings, but the canker in the rose spreads inexorably and eats it all up.

One way to close the gap, by the way, is to take big risks with the money which hasn’t been stolen yet. This is how ‘rogue’ traders like Nick Leeson tend to expand their concealed losses to levels that blow up banks. But it’s by no means unknown for even a small-time embezzler to take the float of company cash to a racetrack or a casino in a last desperate gamble for redemption.

If you recognize yourself in this situation: the selfish thing to do, the thing that will make you happiest, is to turn yourself in.

I’m not giving this advice to skilled fraudsters, people who have a plan and a business model and a long history of fraud; they should probably turn themselves in, but morally, not as a matter of self-interest. I’m talking about the people who needed money badly, who lost money and didn’t want to admit it, who weren’t doing much accounting and then suddenly realized how big a hole they were in. Normal people, mostly, who made a bad mistake in a moment of weakness.

Ask yourself: Do you have an escape plan? Do you know specifically when you are going to fly off to a non-extradition country with the fortune you stashed away in your Swiss bank account? Have you, with care and self-discipline, been fiddling the numbers the other way and steadily decreasing the sum of money that should be there but isn’t? If the answer is “no” or “I can’t bear to think about it” or, God help me, “well, if I win big in Vegas,” listen to me and turn yourself in.

I’m not saying to turn yourself in in a stupid way. Don’t just call the FBI and say “I committed a crime, ask me anything.” Hire a good defense lawyer and talk through your options under attorney/client privilege in order to figure out how you can minimize the punishment you face.²³ But turn yourself in.

If you don’t have an escape plan, it is not a matter of if you get caught. It is a matter of when.

It’s one thing to inevitably get caught if you’re committing a fun crime. Live fast die young leave a pretty corpse and all that. But this kind of fraud is miserable. These fraudsters’ stories become thuddingly monotonous after a while: stress-induced illnesses, divorces, eating disorders, drug addictions, alcoholism, suicide attempts. It hurts to live with the slow yet inexorable progress of an inevitable doom.

It’s okay! You can skip ahead to the doom.

Skipping ahead makes the doom less doomy. You will, of course, probably get a lighter sentence if you cooperate. In the U.S. at least, fraud sentences are based on how much money you stole, which is determined by how much money was supposed to be there, not how much money you actually misappropriated. If your fraud snowballs—as frauds usually do—and over time you find yourself claiming to have more and more money than you actually do, the length of your sentence will only increase the longer you delay. And almost no one ever proactively turns themselves in for crimes: if you turn yourself in, you might even end up acquiring a reputation as a more honest and morally upright person than if you never stole anything in the first place.

And even if turning yourself in didn’t improve anything: people don’t get away with fraud by luck or a miracle; they have an escape plan in mind before they even begin the fraud. At some point, you are going to pay a fine, get probation, or go to prison. The only thing you have control over is when it happens. The sooner you turn yourself in, the sooner this whole thing will be over and you will get to do something else with your life.

Do you really want to spend the next year or five or ten living like this? Wouldn’t you rather live them without the constant awareness of the doom inching towards you?

There’s an old saying about horror writing: the scariest thing is a shadow. A shadow could be anything. Once you show the reader the monster, they go “oh, it’s just a big zombie snake with spider legs. Cool, I guess.”

So too in life. The encroaching doom, the one you flinch away from even thinking about, is much scarier than any bad thing that actually happens. The encroaching doom could be anything. Once it happens, it’s just a zombie snake with spider legs, and that might be awful, but at least it’s not also a scorpion ghost, and now that you’ve seen it you can shoot it with your shotgun.

It is the most difficult thing I’ve ever done to turn around, face the encroaching doom, shine a light in the shadow, and find out what is hiding there. Sometimes the shadow was hiding something immensely painful and immiserating; I’m not saying every shadow hides a fluffy bunny. But it has always been easier once I’ve faced it down. You can do it too. Turn yourself in.

1. A bizarre number of people who commit fraud read my blog so I’m hoping that this will be helpful.

2. This is good selfish advice, but also the United States has unreasonably high punishments for most crimes so in my opinion this advice is most likely to get you a just outcome.

3. Many but not all countries have robust attorney/client privilege. If you have committed a fraud that the United States doesn’t feel is within its jurisdiction, do your own research before confessing to a lawyer.