In opening our weekly town newspaper, a particular article caught my attention. The title, in itself, was vague, “Former 5-Star employee arrested, charged, released.” Our town’s crime rate is relatively low, so I decided to continue reading when I saw the subtitle, “Police allege she stole $130,000.”
This news now had my attention and, sadly, when I got into the weeds of the article, I thought to myself, “Here we go again.”
According to the police report, said fraud took place almost as soon as the office manager arrived at the non-profit organization and lasted four years. Her MO was writing checks from the company’s account and using a company credit card for personal expenses.
I already knew what was to follow—management and co-workers were “devastated.”
“She was just the nicest person you could ever meet,” declared a stunned co-worker.
How many times have we investigators heard that kind of character reference?
Regrettably, all too many.
And how could this long-time trusted employee of the popular non-profit betray their trust?
Easy. The alleged embezzler was in financial stress and saw opportunities to mitigate that stress.
Was Due Diligence ever conducted? Was a background check ever done?
Unlikely. It turns out the purported embezzler was already in the justice system—her prior multiple felonies of grand theft, preparing false documents, forgery and identity theft already recorded at the County Superior Court for all to see.
Exasperated, I shook my head. I was hardly consoled to learn, ‘due to the embezzlement, management is now implementing a comprehensive plan to strengthen financial controls to make sure this is never repeated.’
Aren’t we a tad too late? And isn’t this always the case? The predictable ‘cover your …you know what’ from management.
In this case, had the non-profit conducted a perfunctory criminal records check before hiring the manager, she would never have been hired in the first place.
But let’s say for argument’s sake, said manager arrived without any criminal record. How was she held accountable in her duties? Who reviewed her work and scrutinized her company transactions and accounts? Perhaps her bosses gave her several duties within her job without any oversight or, at best, lax oversight. If so, was there any separation of duties?
It’s still too early to learn the specifics on how the manager pulled off the financial theft, but I would bet ‘dollars to doughnuts’ it took place in a passive financial control environment. We’re not talking about a complicated financial scheme here.
I’m working on a third book, my first one about fraud. I suppose I count myself lucky—there is never a dearth of subject matter relating to this topic. And I’m not shy to pick up a phone or ask to meet with victim companies to discuss what happened. You’d be surprised how welcoming management can be. People like to talk, vent and justify what happened to them. I hear them out, offer some ideas from the lessons learned and leave my business card. Work has never been better!
OK, time to put the newspaper down and help in the kitchen. There will surely be another article of its kind in the next few weeks.