Brian Molony’s
Fraud Trials
A study by: Arpita T., Olumuyiwa Adebisi Momoh, Parth and Steve Blackburn
Part A: Molony’s Crime
The crime under focus for our study is Brian Molony's "White-collar crime." Brian formerly worked at
Canada's CIBC bank and used the bank's funds for his personal gains. The definition of white-collar
fraud is often associated with individuals in positions of higher authority, such as Molony, who are
often- executives, managers, or professionals. These people in positions of control abuse their power
and freedom to extract money from the company to pocket the funds owned by the company they work
for.
Part A cont.
Based on a 2021 study, fraud is the second-most
frequently committed crime in Canada,
On the other hand, Nunavut has only 1.3% of
amounting to a total victim loss of approximately
fraud cases. Other provinces have their stats: New
$357 million, making up around 11.7% of all the
Brunswick at 15%, Quebec at 14.5%, Ontario at
crimes committed in Canada. The province with
14.2%, and Nova Scotia at 14.0%.
the most fraud crimes is Prince Edward Island,
with 19% of all fraud crimes.
Part B: Theoretical Framework
❖ Motivated Offender: The push that leads
an individual to commit a crime. For
R.A.T. Theory: Abbreviation for example, Poverty.
Routine activity Theory, underlines ❖ Suitable Target: This refers to the
accessibility to a victim or property for the
three main reason someone commits a criminal to commit an offence.
crime. ❖ Absence of a capable guardian: The lack
of protection around the Offender’s target.
Part B: Molony’s relation to the R.A.T. Theory
1. Motivated Offender: Molony is an average man with access to significant sums of money, with a
crippling gambling addiction; there is no way he could have afforded his gambling trips to Vegas.
2. Suitable Target: Working at a bank, Molony had direct access to money he would never feasibly
obtain.
3. Absence of a capable guardian: Molony was the guardian of the bank’s funds. Additionally, in
the 80s, the security measures at financial institutions were not as tight.
Part B: Fraud theory- A triangle for white collar crime
❖ Opportunity: weak internal controls, lack
of supervision, and authority abuse.
The three major criminal theories have emerged ❖ Rationalization: justification for his
on the criminal mind. The psychodynamic, actions, and in the case of Brian Molony,
behavioural and the cognitive theory. he was rationalizing his gambling addiction
as his financial trouble.
❖ Financial pressure: It could be debt,
luxurious lifestyle, drug addiction,
gambling addiction, and others. (Puspasari,
2015)
Part B: Fraud theory- Psychodynamic Theory
An individual’s early childhood experiences
can reflect the probability of being involved
in criminal activity. such as exposure to
gambling, financial crisis, family history of
drug, or alcohol addiction.
Brian Molony was exposed to gambling by
his father at the age of 10. He observed the
gambling activity and its consequences.
Psychodynamic Theory Cont.
❖ Three stages of cognitive learning can be seen in the Brian Molony case: Pre-Conventional
Level: being exposed to gambling by his father at age 10. He observed the gambling activity and
its consequences.
❖ The second stage - The conventional level was when he started performing the activity by
himself and got to understand the thrill of gambling.
❖ The third level is the post-conventional stage - in the early 20s, people start to build their
perception of the world and society. A person wants to fit norms by either changing their actions
to meet societal expectations or would justify their activity by challenging conventional ways of
doing things. (Schueneman, 2023).
Part B: Fraud theory- Cognitive Theory
Cognitive theory primarily focuses on understanding
how individuals process information, learn from their
surroundings and the impacts or consequences of their
actions. According to this theory, individuals use their
mental processes like perception, memory, and problem-
solving to interpret experiences and make decisions. For
example, when Molony began gambling independently
at a conventional level, he might have learned to
associate the thrill of gambling and the excitement from
the edgework, influencing his future decisions and
behaviours in similar situations.
Part B: Fraud theory- Behavioral Theory
Behavioral theory implies that our actions are influenced by the rewards and punishments we
experience. Molony began by writing out loans for fictitious companies and extracting large sums of
cash, which he would just put in his pocket when boarding an airplane. After a situation where he had to
pass through a metal detector, he had to remove his keys from his pocket. The problem was that Brian’s
keys were buried under thousands of dollars in cash. Fearing punishment and realizing that he had to be
more careful and efficient, he then began using a company called- California Clearing Corporation. The
company’s sole purpose was to let people drop lump sums of money into the casinos in Las Vegas. This
theory explains how consequences shape behaviour. (Schueneman, 2023).
Part C: Brian’s journey joining and building his career at CIBC
❖ Molony initially intended to work as a financial writer; however, after performing so well
on the CIBC aptitude test, he was hired straight out of university and placed in their fast-
tracked managerial program.
❖ Molony began working as a teller and then savings, current accounts and foreign exchange.
He later "floated" around the bank's network of 1600 branches, giving him a better
understanding of how the bank works.
❖ By the time Molony was 26, he rose to the position of assistant branch manager. This
position gave him access to all accounts held within CIBC.
Part C: Brian’s embezzlement scheme
Brian Molony's case serves as a cautionary tale
about the risks of unchecked power and the
importance of implementing rigorous internal
controls and audits to prevent such fraudulent
activities within financial institutions. To
embezzle money, Molony engaged in a
sophisticated and deceptive scheme to feed is
own addictions.
Brian’s embezzlement scheme Cont.
False Transactions: He conducted a series
Fake Accounts: Molony opened numerous of fictitious currency options transactions
fake client accounts in the bank's computer between these fake accounts. The
system. These accounts had no customers transactions were designed to make it seem
but appeared legitimate in the bank's like genuine trading activity was taking
records. place, but in reality, they were simply
moving money around to obscure the
fraud.
Phantom Trades: Molony recorded non- False Statements: He fabricated false
existent trades in the bank's system, statements and account summaries to
making it seem like real currency options cover up the discrepancies in the bank's
deals were occurring when, in fact, there records. These fake documents made it
no counterparties or external trades appear as if the bank's funds were
happening. accounted for and all transactions were
legitimate.
Part C: Into the mind of a con man
➔ Brian’s seniors believed- “He has an impeccable record and excellent judgment” - they
trusted him with big money deals.
➔ He started with few thousand dollars of money from his clients from a bank which he was
supposed to take on the client’s behalf but used to gamble.
➔ Had a gambling addiction which affected his personal relations with his girlfriend, friends,
and obviously his career.
◆ Made big bets on impulse, showed no consistent pattern for gambling
◆ Lying to his partner and showed desperation for gambling.
◆ Did manipulation of funds of millions of dollars to gamble at Vegas as well as
Atlantic gbhnj casinos.
Part C: How did Molony execute the heists?
To pay off his debt he used gambled even
more in hopes to win a jackpot to cover his
losses.
His confidence strengthened exponentially as
he embezzled money from the bank each time
and at one point he used more than 1.25
million dollars at the Vegas casino, and around
a similar amount at the Atlantic City casino.
Part C: The casino’s negligence
He used corporate accounts and bonds to loan himself lump sums of money which he withdrew in cash
to splurge at casinos.
Another loophole involved the casino suspecting that Molony, despite being a common bank employee,
was amassing significant amounts of money. However, they chose not to dive deep into the fund
information and solely focused on maximizing their profits.
Gambling addiction
Molony had shown many of the symptoms of Gambling addiction disorder or compulsive gambling.
➔ Preoccupied with gambling and related thoughts
➔ Increase the amount of gambling to reach the same thrill. (same as alcohol, or drug addiction)
➔ Unsuccessful in stopping gambling
➔ When cutting down on gambling feels irritated.
➔ Trying to get back lost money by gambling more (chasing losses)
➔ Lying to family members or others to hide the extent of his gambling
➔ Risking or losing important relationships, a job, or school or work opportunities because of
gambling
Gambling addiction (cont.)
Gambling addiction for the brain works the same way it works for drug addiction, or alcohol addiction.
Brain’s reward system stimulates one to go for gambling.
➔ A reward is a natural process during which the brain associates diverse stimuli (substances, situations, events, or
activities) with a positive or desirable outcome. This results in adjustments in an individual’s behavior, ultimately
leading them to search for that particular positive stimulus.
➔ Dopamine plays an important role in this reward system. When rewarding stimuli are experienced, the
dopaminergic mesolimbic system is activated which causes the release of dopamine to the targeted nuclei.
➔ Reward system includes survival rewards like, eating, drinking, and mating, which are necessary for maintenance
of our specie.
➔ Substances of abuse, whether illicit (e.g. cocaine, heroin, etc.) or licit (e.g. alcohol, nicotine, etc.), hijack the
mesolimbic system by offering a reward without an obvious biological function. However, the pleasure and reward
linked to initial substance use are then lost by their abuse, which leads to a vicious circle of addiction.
➔ According to recent studies, it is evident that reward is a subjective matter, and it depends on, chemistry of an
individual, homeostatic state, and genetics, as well as the environment, and epigenetics. (Lewis et al., 2021)
Gambling addiction (cont.)
The factors for Molony’s gambling addiction could be biological (brain reward system), psychological
(psychological illness), or sociological(environment). However, it is not well understood about the exact cause of
the gambling addiction, but some of the psychological disorders increases the possibility of developing gambling
addiction.
❖ substance misuse problems, personality disorders(antisocial, borderline, histrionic, and narcissistic
personality disorders) (Problem Gambling, Personality Disorders Often Go Hand in Hand, 2014),
depression or anxiety, bipolar disorder, obsessive-compulsive disorder (OCD), or
attention-deficit/hyperactivity disorder (ADHD).
Other biological factor could be drug.
❖ Drugs called dopamine agonists have a rare side effect that may result in compulsive behaviors, including
gambling, in some people. - drugs used as a medication for Parkinson’s disease.
Gambling addiction (cont.)
One’s personality and competitiveness also contributes to their gambling addiction.
➔ Being highly competitive, a workaholic, impulsive, restless, or easily bored may increase your risk of
compulsive gambling.
➔ Age and gender also plays vital role: more common in younger and middle-aged people. Can also be an
issue in old-aged people, but not very prominent. More common in men than women, however, if a
woman is addicted to gambling their cases could be more severe.
(Compulsive Gambling - Symptoms & Causes - Mayo Clinic, 2022)
Part C: Brian’s conviction
Brian Molony's luck finally ran out when he went Eventually, CIBC started getting suspicious about
all in and bet five thousand dollars on forty some questionable activity in their books. They
football teams, and to his misfortune, not a single decided to dig deeper and found out that Brian
one of those bets came through, and he ended up had been writing fraudulent transactions and
losing about two hundred thousand dollars in just doctoring documents for his embezzlement spree.
one night. To add fuel to the fire, not too long On April 27, 1982, the authorities came, and
before that, he blew one million dollars playing a Molony was arrested in his limousine.
dice game called craps at Caesar's Casino in
Atlantic City.
Part C: Prosecution
Ultimately, CIBC and Caesars Atlantic City
settled the matter privately, keeping the details
undisclosed. District Judge H. Mitchell Cohen
stepped in and enforced the settlement. As part of
the order, the judge ordered the casino to shut its
doors for a whole day as a penalty. It is estimated
that Caesars Atlantic City took a hit, losing
somewhere between $700,000 and $800,000 due
to that order.
Prosecution Cont.
Brian Molony pleaded guilty to embezzlement in
November 1983. There are varying sources
regarding the length of his prison sentence. Some
indicate that he served two and a half years, while
others suggest a six-year sentence.
Part D: Impacts
Fraud is often described as a victimless crime, but this could not be further from
the truth. Fraud can be defined as “wrongful or criminal deception intended to
result in financial or personal gain” The victims of this criminal deception can be
individuals, businesses, governments, charities or any other organization. It is not
only the individual or organization targeted that feels the impact of fraud; a
cascading effect affects all people directly connected to the primary victim. If a
business falls victim to fraud and has to shut down, the employees and their
family members all feel the impact.
Part D: Impacts Cont.
Human Impact: Aside from the financial losses, Financial Impact: The most apparent impact
victims of fraud also have to cope with of fraud is financial. For individuals, the
embarrassment, shame, fear, and anger due to financial impact of fraud can be devastating.
being victimized. These feelings, left untreated, Life savings can be taken, which may be
could lead to mental health problems such as difficult or impossible to track and recuperate.
anxiety or depression. Victims may also endure
Businesses often have insurance, but fraud
social challenges such as loss of reputation,
prevention must become part of their budget.
vulnerability, isolation, and exposure.
Part D: Impacts Cont.
Reputational impact: When fraud is exposed, the Government Impact: Government agencies have finite
victim and perpetrator can experience negative resources. Money and time are used for police
impacts on their reputation. Individuals who fall investigations or criminal proceedings that could be used
victim to fraud may be seen as weak or gullible, and elsewhere. Defrauding government social welfare systems
is a significant problem with a widespread impact. When
they may have difficulty re-gaining respect and
fraud occurs within government assistance programs,
credibility. Reputational damage can occur to
money and resources intended for people that need them
businesses victimized by fraud. Employees, investors,
are redirected to dishonest criminals. Tax fraud, such as
and clients may see the company as being careless under-reporting or non-reporting, leads to decreased
and not able to protect sensitive information, as well Government revenue; this can have a negative impact on
as the inability to manage secure transactions. public services and infrastructure development.
Part E: Solutions
Some of the advancements adopted by banks to lessen the possibility of fraud.
❖ AI (Artificial Intelligence): Many banks use advanced security algorithms powered by AI to detect fraud
in real time. AI is highly adaptable to new threats and can analyze vast amounts of data, making it more
accurate and efficient than manual security measures.
❖ Digital Money and Paper Trail: With the prevalence of digital banking and transactions, there is always a
paper trail for each transaction. Digital payments are more traceable, making it easier to detect fraudulent
activities.
❖ Biometric Authentication: Banks utilize biometric data, such as voice, facial features or fingerprints, to
verify the identity of customers, adding an extra layer of security to prevent unauthorized access.
❖ Two-factor or Multifactor Authentication: Banks often require customers to provide two or more pieces
of evidence to verify their identification, adding an extra layer of security to protect against fraud
(Wingard, 2023).
Solutions (cont.)
Although these solutions are already being used in the banking system, they are not
perfect as the advancement of technology helps to reduce the chances of traditional
fraud; it also forces criminals to evolve and find new methods and exploitations.
Creative criminals stay one step ahead by creating new ways to do old crimes such as
money laundering, cheque fraud and identity theft while using today’s technological
landscape to create new types of theft and fraud like login credential theft by phishing,
wire transfer theft and caller ID spoofing.
Solution (cont.)
❖ Fraud Awareness Training: Regular and free fraud awareness training provided by the
government helps educate bank employees about fraud risks, prevention techniques, and best
practices.
❖ Internal Fraud Detection: Banks monitor employees with access to accounts without a
legitimate business purpose and monitor their activities, helping detect and prevent potential
internal fraud.
❖ Database for Known Theft: Creating a database of known theft incidents helps raise awareness
among employees about emerging theft patterns and modus operandi, enabling them to be vigilant
and proactive.
❖ Real-time Transaction Monitoring: Monitoring every single transaction in real-time helps
identify suspicious activities promptly. Additionally, employing multilayered verification for large
payments adds an extra layer of security against fraud (Wingard, 2023).
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