A former Facebook DEI executive had embezzlement down to a science. Between 2017 and 2021, Barbara Furlow-Smiles took her role as a trusted employee of the social media platform to steal millions in company funds to pay for a lavish lifestyle, including spending ten grand on “specialty photos” and eighteen thousand on preschool tuition.
In her role, Furlow-Smiles had the authority to approve invoices and purchases for Facebook and access company credit cards. She rang up phony expenses, paying out her friends, babysitters, hairdressers, associates, and family members for fraudulent services and forging invoices to match the expenses. Her accomplices received the money and then paid it back to her in cash.
Furlow-Smiles successfully swindled $4.9 million from Facebook before losing her job and moving on to Nike. While serving as the athletic wear company’s DEI officer, she continued her fraud, racking up around $120 thousand from Nike’s diversity program before finally being caught. She is serving five years in prison for wire fraud and must cough up $5 million in restitution to the corporate giants.
Furlow-Smiles has joined the group of elite embezzlers, including Elizabeth Holmes, Mike Lynch, and Sam Bankman-Fried.
Sam Bankman-Fried, the ex-CEO and co-founder of the failed crypto exchange FTX, was sentenced to 25 years in prison for embezzling an estimated $8 billion from customers and investors. In November, he was found guilty on seven charges, including wire fraud, money laundering, and conspiracy linked to FTX’s downfall.
It was a fate shared by Holmes, founder of the medical diagnostic company Theranos. The company claimed it could revolutionize blood testing by using minimal amounts of blood, like from a fingerprick. In 2015, Forbes named her the youngest and richest self-made female billionaire in the U.S., with Theranos valued at $9 billion.
However, it was later revealed that Theranos’s claims were fraudulent. In 2018, the U.S. Securities and Exchange Commission (SEC) charged Theranos with defrauding investors out of $700 million. Holmes settled by paying a $500,000 fine, returning shares, giving up control of Theranos, and agreeing to a ten-year ban from being an officer or director of a public company. In 2022, she was convicted of defrauding investors and sentenced to over 11 years in prison.
Another big-time fraudster, Mike Lynch, is still awaiting his fate after being caught hyperinflating the worth of his company, Autonomy Corporation, during its acquisition by Hewlett-Packard. The fraud is estimated at $11 billion. Lynch faces 16 charges, including wire and securities fraud, and could face a 25-year sentence.
These examples of high-profile fraud may not seem to have a commonality, but psychologists see similarities in the personalities of embezzlers. These white-collar criminals often deal with financial issues like heavy debts, costs related to addictions such as gambling or shopping, or trying to maintain an expensive lifestyle.
Embezzlement happens when individuals exploit weak internal controls to steal funds secretly. For instance, employees with access to company accounts might create fake invoices or alter transactions, as DEI executive Furlow-Smiles did. Embezzlers justify their actions to themselves. They might believe their behavior is acceptable due to feeling wronged by their employer or thinking they deserve more. This rationalization helps them align their actions with their self-image. But it’s not always about financial needs or overwhelming debts.
White-collar crime results from a combination of individual susceptibility and situational factors. Exposure to unethical norms in the workplace can shape behavior. According to differential association theory, people adopt behaviors accepted by their colleagues and professional circles.
White-collar criminals justify their actions, convincing themselves they deserve the monies because of perceived grievances or entitlement. Embezzlers have an inflated sense of ego and carefully calculate their risk assessment to see how much they can get away with. Like a gambling addiction, however, they underestimate their ability to keep their behavior under control until eventually they get caught.
For Furlow-Smiles, the crime occurs when many corporations are turning away from DEI policies. Her actions will draw further scrutiny to an already controversial business practice.
Nike, meanwhile, already has enough DEI issues to battle. The athletic wear company hired fallen-from-grace Bud Light’s transgender influencer, Dylan Mulvaney, to model sports bras and leggings. Nike has yet to learn that just because they can do it doesn’t mean they should – no matter what their catchy tagline says.
