Embezzlement--True Story #1

This company was headed for Greatness.  They handled Fortune 5oo companies all over the world and operated out of a small office in Austin, Texas.  Their overhead was fairly low but their message was BIG.  They had a guy in his early 30's that was their bookkeeper.  We liked him and trusted him.  We only saw them/him once or twice a year for tax planning or tax preparation.  We eventually took over the

bookkeeping and he was given his notice.  When we reconciled the bank statement and payroll, we realized something was WRONG.  He was a salaried employee and was supposed to receive two checks a month.  We started seeing three checks a month, one of which was signed by him...forging the owners' signature.  In all, nearly $100,000 was stolen by him that we identified.  We contacted the District Attorney's office.  Our client paid us to create a package of evidence that was without a doubt  enough to convict anyone.  Unfortunately, the bookkeeper had zero assets, no funds and was nearly bankrupt.  My clients could not afford going any further and put a halt to the entire process.  Therefore, this guy is , like most other embezzlers, free to move to the next job.  What could they have done to prevent this?

--have the company bank statements sent to their home (either electronically or snail mail) including the canceled checks.  If they quickly review the checks (front and back), they would have noticed him cashing three paychecks a month instead of two or perhaps saw the forged signature!

Next up - need + opportunity....who is responsible for what?

Look for more juicy tips from the upcoming stories of The Naked Accountant!!

Comments

[stan]

Thanks for the help w this topic. We were embezzled from last year. We didn't have the right controls in place.

[Ici]

Love your blog. Thanks!! Keep it going!

[Pamela Baggett-Wallis]

Way to go, Jean! Very important information for ALL businesses.
Pam

[Stephen P. Holt (Engineer and Musician)]

GOOD, NO GREAT ADVICE! Thank You!!