Mad Men: A Case Study in Fraud
Not even the fictional New York advertising agency Sterling Cooper Draper Pryce (SCDP) is immune to employee fraud. I would argue Season 5 of Mad Men has been the best season yet for many reasons, one of them being Lane Pryce’s embezzlement of $7,500 of the firm’s funds (fun fact: $7,500 in 1966 is equivalent to approximately $53,000 today). In case you don’t watch the show as religiously as I do, let me fill you in on some of the details:
Mad Men is an Emmy-winning series on AMC that follows the story of SCDP and certain employees during the 1960s. Lane Pryce (played by Jared Harris) is a British expatriate serving as a Partner and the financial officer of the firm. He is well known for keeping the company afloat during its most troubled times, even going as far as to liquidate his $50,000 stock portfolio in order to infuse some cash into the once-struggling company. However, this noble act comes back to haunt him in the form of nearly £2,900 in taxes due to the British government within the next two days; £2,900 he did not have (fun fact: Queen Elizabeth II had reigned for nearly 14 years at this point in the show).
In order to come up with the cash, Lane secretly met with the firm’s banker to secure a $50,000 credit extension. He tells his partners this money is a “surplus” and that everyone in the firm should get Christmas bonuses, including the partners. The idea is approved by the other partners, until a significant client of the firm decided to pull all of their advertising for the foreseeable future in order to save money. The partners agree to hold off on their share of the bonuses until January. In the meantime, Lane, still desperately in need of the money, writes a $7,500 check to himself, signs it, and then forges the signature of Don Draper (played by St. Louis native, Jon Hamm) as the co-signer of the check. A few weeks later, the partners decide to completely forego their share of the bonuses, leaving Lane in an incredibly uncomfortable position.
The check goes unnoticed by anyone in the firm for a while, until Bert Cooper (played by Robert Morse) finds the cancelled check while looking through a bank statement. He first approaches Don Draper, who doesn’t recall signing the check, but tells Bert he’ll take care of it. Don confronts Lane, who insists it was a “13-day loan” in order to pay his British taxes, but Don does not accept this answer. He tells Lane he can no longer trust him and asks for his immediate resignation. Lane is noticeably upset, but obviously understands the severity of what he’s done. Tragically, the second-to-last episode of the season ended with Lane taking his own life in his office because of the grief this decision (and others) caused him.
While this is a very dramatic ending to a fictional story, it’s not totally unrealistic. With the benefit of hindsight, the 3 areas of the fraud triangle are obvious:
– Pressure: Lane owed £2,900 in taxes in a short amount of time, and he did not have the money to pay it.
– Opportunity: As the financial officer of SCDP, Lane had complete oversight of the firm’s financial operations.
– Rationalization: He meant to pay back the loan a little bit at a time. He also lamented to Don that he was never fairly compensated for his contributions to the firm and that he deserved the money.
Bloggers debate and Don Draper implied that if Lane would have just asked for the money, he would have likely gotten it. Instead, he chose the route of fraud for which he suffered the consequences. By forcing Lane to resign, Don sent a message to the rest of the firm that this type of behavior will not be tolerated at SCDP. Some Mad Men fans argue that Don was too harsh on Lane, but I think Don did the right thing. How can you continue to trust the person entrusted with a company’s finances after he/she has been caught stealing money from the company?