Deceptive Recruitment: Fraud, Coalitions, and the Dark Side of Routines

Abstract

Investment fraud as a specific form of organizational misconduct has received significant attention from scholars over the years, yet little work has been done to unpack where these practices originate or how new participants are recruited. To address this, we develop an year-long case study of a distributed financial organization, “CTG,” which conducted investment-related activities involving cryptocurrencies between August 2017 and August 2018. Applying a routine dynamics perspective, we explore how a secretive coalition uses deception and roleplay to recruit new members. In tracing the emergence of routines related to financial fraud, our analysis revealed actors whose roles shifted to enact the routines that had entrapped them, thus shifting from victims of investment fraud to transgressors.