The New York Times headline blares "French Trader Is Remembered as Mr. Average," and goes on to describe a mid-level employee with nothing in his background to suggest that he would become possibly the biggest rogue trader in the history of the world. The Times reported that:

He failed in a bid for town council in his 20s; he never rose higher than a green belt, a mid-level rank, after years of judo training -- because of his bad knees; and he attended an average college where he earned respectable but unremarkable grades.

It's anticlimactic in a way. We expect crooks and fraudsters to fit a certain image: brash, arrogant, reckless, charismatic. But few people know fraud better than Barry Minkow; in his teens and early 20s he perpetrated the infamous Zzzz Best fraud, spent seven and a half years in prison, and has since helped regulators uncover over a billion in fraud -- and he wouldn't be surprised.

In an interview earlier this year, I asked him about the psychological profile of a con-man. Here's what he wrote back:

Consider two quick examples that could be readily multiplied. Jose Gomez, the partner at Grant Thornton sentenced to 12 years for taking a bribe of 200K was a classic accountant introvert while I was an arrogant extrovert. Or how about the case of Jim Donahue, the Stanford mathematician (Masters Degree) and brilliant fund manager who I met in prison at FCI Englewood was a total introvert who plead guilty to a 100 million dollar fraud? ... People can be very passionate about their company and not be crooks and introverts who are not the so-called "charismatic con-men" can and do commit massive white collar frauds. My point? Never make the mistake of trying to profile subjectively what the typical corporate thief or "thief to be" may look like -- but rather use objective criteria to establish "red flags" or high likelihoods for fraud to occur.

The message for investors is this: To protect yourself from fraud, you're going to have to dig into financial statements and learn to spot red flags. Don't expect con-men to "look" or "act" like con-men. They come in all kinds.