The following is a true story, with only minor details changed.

Jack was a top sales executive in the fastest-growing division of the company. As such, when the company had its annual sales conference in Las Vegas last month, Jack and his whole team were invited out and held aloft by the CEO as examples of success. Applause was given; gold watches were handed out. Jack boasted to others in the company about the skill and prowess of his team, even as others wondered: had the praise had gone to his head, or was he always this much of a jackass?

The first day of the sales conference came to a close, and Jack hit the casinos. The cards were in his favor; by the end of the night, he was up $28,000. The next day dawned. Jack, triumphant with his new watch and new winnings, spend the second day of the conference wholly drunk. Then came the second evening—a Friday night, the sales conference done, with nothing left to do but enjoy the weekend—and it all started to unravel.

Jack hit the casinos again. This time he lost the $28,000 he had won the night before. In his well-blended state, Jack marched to the nearest ATM machine, pulled out the corporate Amex card, and withdrew another $7,000. Our hero and his money were quickly parted again, and so, defeated and penniless, Jack hopped into a taxi to return to his hotel. At the hotel, however, Jack remembered that he had no money and no credit. This displeased the taxi driver. An altercation ensued. Hotel security was called first, then the police. Soon enough, our salesman Jack was in county jail.

Back home in Texas, Jack's wife awoke the next morning and asked the obvious question: Um, where was her husband? She called Jack's boss, who called around, and ultimately sprang Jack from jail the following Monday. The senior executives were none too pleased about the $7,000 withdrawal he made, and then someone else—whom, I sorely hope, is a devout reader of Compliance Week—asked the other obvious question.

“So if he blew $7,000 at the casinos, what else has Jack been doing?”

Investigations were launched. Soon enough, the company found that for more than a year Jack had been padding his expense reports, and stole at least $180,000 from the business for home renovations and lord knows what else. Conclusion: Jack, fired; senior executives, filing a lawsuit; everyone else at the company furious, titillated, and disappointed all rolled into one.

This tale came to my attention earlier in the week, and I've been fascinated by it because, for the first time in all my years at Compliance Week—Jack the swindler is somebody I know. I don't know him well, but we've met several times over the years through a mutual acquaintance, and I've always presumed he was a decent fellow and his company solid. I was wrong. Behind Jack's pleasant smile and underneath his hair-gelled head, he was committing fraud.

I've been trying to fit Jack's behavior into the famous fraud triangle of rationalization, pressure, and opportunity. The opportunity was easy: bogus expense reports, sometimes with receipts that didn't quite match the reported expenses and sometimes with no matching receipts at all, that were fed into a weak accounting department, suffering from too few people stretched too thin, that could not impose sufficiently strong internal control over financial reporting.

The rationalization and pressure, however… they're what leaves me puzzled.

Jonathan Marks, the anti-fraud guru and all-around sharp guy at Crowe Horwath, has long said that the idea of the fraud triangle is wrong. Marks prefers a model he calls the fraud pentagon, that adds two more dimensions: arrogance and competence. The triangle, he says, only explains low-level employees who commit small-time fraud: the clerk who steals money to pay for his spouse's cancer treatment, or the office manager who scams enough cash to take her family on a vacation she believes they deserve.

That triangle doesn't explain the likes of fraud committed by senior executives or highly successful people, such as our man Jack. Those types of frauds, Marks says, are driven far more by greed and lust for power, committed by men (I mean, have you ever seen a major corporate fraud committed by a woman?) who love the thrill of the game more than the financial reward.

I don't know Jack well enough to say for sure that he falls into that latter category of swindler who belongs in the fraud pentagon. He made good money at his job, certainly, and had a bright future with his company. On the other hand, perhaps he had a gambling addiction to feed or some other personal problems I don't know.

Whatever the reason, Marks' other piece of wisdom about fraud is that understanding the psychology of the fraudster is just as important as developing a strong system of internal controls to fight him. Internal auditors are nowhere nears as savvy on those interpersonal skills as they need to be, Marks says.

Apparently, neither am I.