File this under “things you hear about that never happen to anyone you know, until they do.” The nice husband and wife accounting team that we’ve used for 7 years were arrested Thursday. She had a regular job and worked part time in her husband’s accounting business. I’d seen a lot of her lately, with tax season and all. She was here last Saturday to pick up the checks for our tax returns.
So we read yesterday in the paper they have been arrested and charged with embezzling $750,000 from the company she worked for! My supervisor filed an extension, and they have all her 2000 tax information. Our office is in total shock!
handy I don’t want to post specific suggestions (for hopefully obvious reasons) but as the director of a small non profit, I have some idea of how that could happen.
The accountants would have access to bank account numbers etc, often would have the checking account statements coming directly to their office. In some cases, they are making out the checks for your signature, or even perhaps making the deposits themselves. Now, a good director/CEO will have some idea about costs etc. but in a large co with substantial cash flow, something like this could go undetected for quite some time.
Audits should uncover major problems, but frankly not always, especially since the auditor is relying on the books presented.
OTOH, professionally speaking, embezzlers have a more difficult time gaining employment again post incarceration (go figure).
ON the OP. My sympathies, seriously. It’s shocking, one tends to replay scenes involving the person, questioning your assessment skills. Please be aware of these, and don’t let this experience cause you more pain.
Well, a good auditor should be recognizing control weaknesses that could allow something such as this to happen. An audit based solely on the financial statements of a company(such as an accounting firms sometimes do) does not present the full picture. This type of audit does have it’s place, however and does give a good picture of the financial standings of a company, assuming no one is falsifying the books.
Annie X-mas these things always come as a shock. I cried over the first case of internal theft I found. It was from someone that I didn’t expect it ofm who had been with the company for years. I was just glad that I didn’t have to do the termination.
It is also worth noting that we don’t know how long the embezzlement was going on; $750,000 over 20 years at a company with a cash flow in the tens of millions might not jump out at even a good auditor, provided she was smart.
First of all, the money was embellzed from a company she worked for as an accountant. I’m not going into specifics, but it can be done. She worked there less than 2 years, but managed to do it.
She only reconciled our bank statements and did the company and some personal taxes. I always thought she was a very nice person. Like I said, you never know.
I realize this is a little bit off topic, but somewhat related…if you ever find out that someone has been defrauding the federal government–overbilling, billing for goods and services not provided, billing for inferior goods and services, etc…then you can file a lawsuit under the Civil False Claims Act and rake in some nice $$$$ as a qui tam relator. Basically, the government pays a bounty to whistleblowers if a judgment is recovered.
Never steal anything worth less than twice your annual salary. This includes pens and paperclips.
The collorary for business is: Never give anyone, except officers of the company, unchecked access to more than twice their annual salary.
I’d bet that $750,000 was more than twice her salary.
Back in '96 our Admin. Assistant imbezzeled about $50,000 – not quite twice her salary, but she got away clean.
I’m wondering what the husband’s involvement was. Did he help her imbezzle the money, or just help spend it?
Even the officers of a company should not have unchecked access.
I would love to know if there were red flags that should have aroused suspicion. Were they living beyond their means-new cars, new houses, financial problems? (This is just the auditor in me thinking, and there is really no answer required.)
There are different types of thieves-and that’s what embezzlement is, no matter what you name it. There are the ones who just want to see if they can get away with it(that’s how it starts at least). There are the ones who are in financial difficulty and see it as a way to “borrow” the cash that they need. And there are the ones who set out to take advantage of the company and get away with all that they can.
The fact that she was there only 2 years and managed to get away with $750,000 says to me that she entered and immediately began looking for ways to siphon off funds. My ‘gut’ tells me that her husband was in some way involved, with that much gone in that short an amount of time.
[sup]I’m dying to know how it happened, but I know I won’t get told. What kind of auditor would I be if I didn’t want to know?[/sup]
Just a guess, but if they own a small business together, I suspect that he helped launder it (Or attempted to. Dosen’t look like they did a great job).
Again, I know how they did it (someone in my office tried to do this on a very smaller scale, but didn’t get away with it). I’m not posting any instructions for illegal activity, particularly when it is not foolproof.
They were living very expensively, including having five expensive cars and buying a house and putting over $100,000 in improvements. I would guess she would tell people the money came from her husband’s business. She left the company right before she got caught.