The Embezzler Next Door

April 15, 2010 — -- Quick quiz:

(1) Your employer reimburses your expense report twice by mistake. Do you tell?

(2) Your client accidentally overpays you for services rendered. Do you come clean?

(3) You discover that your supervisor is stealing from the company. Do you speak up and risk being shown the door?

Don't be so quick to answer "yes" to these questions. Headline-grabbing white collar criminals aren't the only ones who succumb to squishy ethics.

When it comes to committing corporate fraud, "You think it's just Martha Stewart, Bernie Madoff and C-level executives," said Kelly Pope, a visiting professor of accounting at Wake Forest University Schools of Business who's filming a documentary on white collar crime.

But this former forensic accountant with international firm KPMG warned that co-workers, friends, family and neighbors sometimes turn out to be white collar criminals, too.

"You can come from a good background and have a good religious upbringing," said Pope, who also teaches full time at DePaul University in Chicago. But, she added, "You can make a couple of bad choices and end up in prison. Anybody can."

In fact, the Association of Certified Fraud Examiners (ACFE), an organization aimed at stamping out corporate fraud, reports that most employees who commit fraud on the job are first-time offenders, or as Pope calls them, "ordinary people who made mistakes."

'An Incremental Descent'

It's not just corner-office bigwigs making a play for their employer's cash. The ACFE reports that 18 percent of fraud is committed by executives or upper management. But it also reports that 29 percent is committed by members of a company's accounting department.

Diann Cattani was one of these workplace thieves. She embezzled $500,000 over the course of four years from a small consulting firm she worked for in the late '90s. After her conscience got the better of her and she turned herself in, Cattani served 18 months in federal prison.

"I'm probably your stereotypical white collar criminal," said Cattani, who now works at a small accounting firm, a job she said she owes to a colleague who highly recommended her. "I'm not tattooed and pierced. I grew up in an insulated and isolated world."

Stealing Started Innocently

So what happened?

"It wasn't a check for $500,000," said Cattani, whose rap sheet prevents her from working for a public company or obtaining a professional license. "It was a little bit here, a little bit there. It was an incremental descent into destruction."

The stealing started innocently enough with her travel agent accidentally charging a vacation Cattani was taking to Cattani's corporate credit card.

Cattani didn't speak up, and her company didn't notice. So she continued to pilfer from her employer here and there, eventually paying her personal credit cards with company checks, telling the payroll company to increase her salary and setting up a dummy vendor through which to pay herself.

"I was disgruntled. I was greedy. I just rationalized it away," Cattani said.

'Temptation Is Insidious'

Cattani doesn't blame anyone but herself for the bad choices she made. But because she wants budding employees to know how much such transgressions can cost them, she regularly speaks to universities around the country about her criminal background.

"It can happen to anybody with all the elements in place -- the opportunities, the pressures, the rationalizations," she said. "And temptation is insidious."

Justin Paperny, a former securities broker convicted of a felony, seconded that sentiment.

"Of course, I knew it was wrong to let my client run a Ponzi scheme," said Paperny, who served 18 months in federal prison after being convicted of securities fraud and was released eight months ago.

"But knowing right from wrong wasn't enough. I had this sense of entitlement. I justified my behavior because the commissions were so significant. If you get away with it that first time -- and most people do -- then one lie leads to another. It's an ethical abandonment of responsibility."

Curiously, Paperny found he had a lot in common with the men he met in prison. Like him, many of his fellow convicts had been "raised with opportunity."

"It's normal guys -- it's the junior stockbrokers, it's the accountants, it's the auditors," he said. "We all had big dreams and ambitions. Very few set out to scheme or rob. They're very much like you and me."

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This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

Michelle Goodman is a freelance journalist and former cubicle dweller. She is the author of "My So-Called Freelance Life: How to Survive and Thrive as a Creative Professional for Hire," and, "The Anti 9-to-5 Guide: Practical Career Advice for Women Who Think Outside the Cube." For more information, see Anti9to5Guide.com. Follow her at @anti9to5guide.