Stories of employee fraud

Howdy all:
A friend of mine is doing a presentation on employee theft, accounting/ embezzlement-wise and otherwise, and needs some good anecdotal stories. Key to the presentation is that they get caught (and how they were caught). The bigger the theft and the more bizarre or humorous their eventual capture the better, so your buddy stealing office supplies won’t cut it here. Also, any Web sites with these types of stories would be greatly appreciated.

Dunno if this will work, but I was once fired from a gas station for stealing $10,000 in odd taxables and grocery in one month. Yep, they said I stole $10,000 in panty hose and cheese.

They protested my unemployment claim. When I went to the hearing, the new District Manager just said that he wanted to hear my side of the story. I saw the old DM about a year later, clerking for another chain of convenience stores.

I just found out this week that a so-called “friend” of mine (whom I no longer have contact with) embezzeled over $5,000 from an insurance agency he worked for. The “story” is still unfolding. As we speak, he is on the run and the investigation continues. I do know that the insurance “police” have sent him numerous letters trying to get him to respond to the acquisitions against him. I personally think that he will flee the country and go home.

Once he gets the acquisitions straightened out he’d better deal with the accusations too!

“Vandelay!! Say Vandelay!!”

A good friend of mine is a personal injury attorney whose secretary applied for three credit cards in his name, listing herself or her husband as an authorized user. I believe she charged over $20K on those cards, including orthodontist bills and vacations. She was caught when one of the cards maxed out and the credit card company called my friend to let him know they were just going to transfer that balance to an existing card he already had (and knew he had). In addition, she applied for a card in the name of one of the paralegals in the office, who was called by the company to make sure he really did want her husband as an authorized user which, of course, he did not.

From DNRC newsletter 25.0:

This isn’t a clear case of company theft, but there were always suspicions.

At one of my previous companies, a laptop was found missing from the desks of one of the employees of the IS department. This employee asked everyone in the department if they had seen the laptop, no one knew what had happened to it. Even a mass e-mail produced no results.

Finally someone went to check the security tapes from the office building in which our company had leased several floors. The tapes clearly showed the employee’s manager walking out with a laptop. When asked about this, the manager said “Oh yeah, I forgot that I took that one home.”

La franchise ne consiste pas à dire tout ce que l’on pense, mais à penser tout ce que l’on dit.
H. de Livry


      • When I worked at a convenience store some shift managers would steal winning scratched lottery tickets from other people’s shifts and take new tickets for themselves.
  • There were shift managers for day and evening shift - usually during regular business hours the day shift manager was the store manager. There was only one night shift person (that was me) so I dodged all this completely. Shift managers had to do regular accounting-type stuff for their shift, at the end of it. One of those things was totaling up the shift’s redeemed instant lottery tickets.
  • The instant tickets had visible serial numbers on them - these were noted at the end of each shift. There was still a way using the books to steal tickets and it wasn’t possible to tell when they had actually been taken, or who had taken them, or what day the tickets had been taken. Any redeemed instant tickets (and any regular redeemed lottery tickets worth less tha $600) were totaled for the shift and placed in an envelope. All the figures were written on a big paper spreadsheet that was sent into the company headquarters each month. The actual redeemed lottery tickets were collected once a week by the lottery sales rep.
  • The problem was that you HAD to use pencil on the spreadsheet - no pen. The reason was that the spreadsheets couldn’t contain any errors when they were sent in to headquarters- managers caught hell for mistakes here. At the end of the month, the store manager would go over the entire sheet looking for errors. The pencil was so that they could consult you if you had any errors, and make the apropriate changes.
  • The end result of it all was that someone dishonest (let’s say Greg) could “steal” redeemed instant tickets from another person’s shift (let’s say Dave’s) by moving redeemed tickets from Dave’s shift totals to Greg’s. Greg could then take however many new, unscratched tickets equal to the dollar amount that he had stolen from Dave’s shift, trade them for new tickets from that store, and then scratch the new ones himself and redeem any winners at any other store that sold lottery tickets. The lottery totals came out wrong at the end of the week, but it couldn’t be detirmined which shift was actually short. The store’s monthly lottery tickets also came out short, but it also couldn’t be detirmined which day and shift was actually short. - It got to the point that the manager was totaling everything himself at the end of the week. Problem was, he could figure out how much was missing but he still couldn’t figure out who was doing it, or when. And to top it all off, shift managers started doing it to each other. Some stores had four or five people doing it whenever they could; none of their figures for instant tickets were correct at the end of the week or month. It wasn’t uncommon for these stores to lose hundreds of dollars of tickets every week - the store got stuck for missing tickets; they had to return them to the lottery sales rep to get credit. The on-line validation wasn’t enough.
      • Most of this stopped when the chain went to computerization: you had to key in your shift totals in a computer and then nobody else could change them. Last I heard, it was still going on because the computer would only record the quantity of tickets and the total redeemed value of those tickets; so now Greg would trade 10 tickets that won $2 each for ten others from Dave’s shift(s) that won $25 each. Same result. Ill state lottery tickets do have bar-code validation numbers on them; as far as I know the store doesn’t use them for store validation (yet). That would solve this particular problem completely- tracking each ticket from beginning to end.
      • During the time I worked there, the store I worked at was sold from one corporation to another. The second had an even worse reputation for employee theft and fraud than the first. Cashing food stamps, cashing various coupons (especially cigarette carton coupons)- there were ways to do this without affecting the totals. Whole crews got fired for doing this stuff. Computerizing accounting procedures and computerized cash registers do much to eliminate this kind of problem, but new equipment costs money and for a long time, the new owners wouldn’t put it in even though they knew the problems were there. As a result, they got soaked - the new cash registers came “built in” with the new gas pumps so I don’t know exactly what comparable ‘stand-alone’ cash registers would have cost themselves, but that store lost hundreds of dollars every week in instant lottery ticket losses alone for a period of about eight months or so. - MC
      • Well nuts. I forgot to say how people got caught.
      • One guy got caught because the first day that the computer was operatioinal, he’d figure it’d be business as usual. So he swapped the tickets, took the amount of new ones that he scratched off, scratched them off while eating a sandwich, and then went to change the shift totals, , , , , and realized that he couldn’t. He didn’t have money to pay for the tickets he had already scratched (IIRC it was 56 tickets at $1 each). He tried to make up sme bullshit story about it that he told to the manager, but they canned him that day.
      • Another guy was taking tickets as I said, but he wasn’t bothering to take them to another store to cash them in. The computer’s “shift total sales-instants” column did him in.
      • There were thought to be others doing it, but they kinda slithered off quietly on their own - not being able to steal tickets amounted to a huge pay cut on their behalf. - MC

While I was in school, I worked in a convenience store (boy, THERE’S an oxymoron) and the assistant manager had a neat little trick. After working in such a place long enough, you get to know the totals of singular items (ie: 12-pack of beer) with tax. So when it got busy, say, weekends in the summer, and the placed was packed, he’d just tell the customer the total and take the money, making change out of the register. When it got busy, he send the other clerk (usually only two people working on a shift) and he take the money out that he should have rung (rang?) up and leave the minor change bits. When the shift was over, the register would come up OVER by a dollar or two. He got caught by a district supervisor (a new guy who identity was unknown). It was estimated that he had taken about $7500 and probably would have gotten away a lot more, at least until the next inventory.

An asst. manager at store in my old chain was suspected of stealing because when he closed, he would let the employees go home while he “stayed late to catch up on paperwork”. So one night the DM waited around the corner at closing time and about a half hour after the last employee left, this asst came out with several cases of cigarette cartons, about $1000 worth. He insisted that the was the only time he ever did it.

Don’t know if this will help, but it’s entertaining anyway:

10 years ago or so, I got caught stealing from a sporting goods store that I worked at. Me and two friends used to put stuff in the trash, put the trash out on the street, then come back after hours and pick it up. We took anything and everything. Sunglasses, Gortex jackets, ski equipment, weights, tennis rackets, shoes (lots and lots of shoes), you name it. Man, it worked like a charm. I thought up the idea all by myself, too, although I’ve heard many, many stories of other people doing the same thing. We finally got caught when one of my cohorts started selling the stuff around school (he was making over $500 dollars a day for a while). Word got back to the owners, and they figured out what was going on. They never pressed charges, but man did they have us scared shitless. They dragged it out for three weeks, having us come in several times with our parents, making us sign this and that, threatening us with everything but execution! I was only 17 at the time, but I was afraid that I would have been charged as a adult. Some months later, the three of us got together and calculated how much we had taken. We figured it to be over $15,000. One good thing that came of all this is that I haven’t stolen anything since then. It was a real wake-up call to get my ass together and stop fucking around. I have a lot more respect now for things that don’t belong to me.

I tried working out once, but the ice kept falling out of my cocktail.

A low-level manager decided she wanted a company car, but she wasn’t eligible. So she went out and leased a brand-new Volvo S70 sedan on her own. Showed it around the office, bragged about how her boyfriend had helped her buy it.

She didn’t even have the money to pay the insurance; the leasing company found it wasn’t insured and sent a notice to our office. Her direct manager was on vacation, so our office general manager opened this unexpected envelope from Volvo Leasing.

Turns out that to lease the Volvo she had impersonated her boss, and had her boyfriend impersonate our CFO (we’re an industrial conglomerate, for heaven’s sake).

When we fired her, we found she’d been scamming from Day 1. She was in charge of renting computers for classes… she kept some. She was in charge of paying maintenance and gas for a small fleet… our vans always seemed to gas up near her house. Every time she went to a customer factory, a wardrobe item always got ruined and had to be replaced at Nordstroms.

Our corporate lawyers decided it was too expensive to prosecute, but Volvo still claims we owe them the balance of the lease.

“It ain’t no sin to be glad you’re alive”
Bruce Springsteen

I was working for an insurance company when one of the claim payers decided to write herself a $50 check, just to see if it could be done. She was escorted out the next day in handcuffs by two policemen. Gee, you don’t suppose that an insurance company might have something in the check-writing program that sees if the name on the check is the same as the name of the person writing the check, do you?

“The large print givith, and the small print taketh away.”
Tom Waites, “Step Right Up”

We had an maintenance shop where the clerk would purchase equipment for various work crews. He was taking kickbacks from various vendors. He had some kind of scheme where he would inflate the amount of material charged to each job so that he could pay for more than was actually delivered. The vendor would give him (or split) the profits. The work crew foremen kept having high production costs that they knew were wrong so the head office finally sent in an auditor. He could never actually get a paper trail on the guy. So, the auditor came in one day and put his briefcase on the desk and said, “Do I have to open this briefcase or will you resign?” He resigned on the spot. Last I heard he had been arrested for embezzling funds from the Multiple Sclerosis Society where he had been working as a fund raiser. He did jail time.

I spent most of my younger years working as a picture framer for various art supply and craft stores.

At one craft store there was a friendly, old lady working a a gift wrapper. Very kind and outgoing and not at all the type you’d guess was sticky-fingered. Once she left her purse at the store after her shift, so the owner and myself decided to drop it by her house after closing.

When we pulled up to her house I should have started to be suspicious. The little front yard was full (FULL) of the dried stick reindeer and wooden windmills and other junk the store sold.

The door was answered by the lady’s sister, who happily invited us inside. The whole of the little house, top to bottom, was full of every example of pilfered craftsy crap imaginable. Dried apple head dolls, christmas wreaths, wooden Santa Clauses, a veritable forrest of silk flowers, teddy bears, and dozens, (DOZENS!) of ceramic angels all still in their display boxes, all still bearing the stores price tags. I have seen real operating craft boutiques that had less inventory.

We were friendly and cordial and said nothing as we excused ourselves. On the drive home the store owner said not a word as he slowly turned bright purple.

Another time I worked at an art supply store with a really shy quiet young woman. I don’t think I spoke more than a few words to her while working there, and diddn’t think about her afterwards even once, but five years after quitting I got a knock at the door and there she was (athough I diddn’t recognize her at first) toting a red wagon with a big box behind her.

We had a quick, really awkward conversation. Husband left, she had given herself to Christ, moving to Salt Lake City, something about medication, then she opens the big box to reveal hundreds of tubes of oil paint. Really EXPENSIVE oil paint. She remembered I was an artist and all, and since the store was out of business and all, and she couldn’t use them now that she was a Christian and all…

Two hundred twelve tubes. While sorting my windfall I noticed via the date printed on the price tags that she had swiped constantly throughout her eight year tenure at the store, and she had an eye for the most expensive (cadmium yellow, cobalt blue, were talking about $60 a tube stuff here) the total was about three thousand dollars all together.

The weirdest thing was that none of the tubes had been so much as opened. Not one. What do you make of that?

I just diddn’t have the heart to tell her I only painted with acrylics…


I work in a prison and the superintendent (aka warden) is provided with use of a state owned house on the grounds for a nominal rent. Two years ago, a new superintendent was appointed and decided “his” house needed some renovation. He quickly went through the budget for housing upkeep (which was supposed to be used for all housing, not just his own) and his discretionary fund. He then started placing purchases on budgets in other areas of the prison and using them on his dwelling. In addition of course, all of the work was done by employee work crews who were on duty. I have been reliably informed that over seventy thousand dollars was spent on his house in a single year.

Someone (no, not me) made an anonymous phone call to the department’s internal affairs office and a local paper. He kept his job due to the technicality that he hadn’t actually stolen anything; he had spent the money on a state owned property. However, it was decided that he had misspent twenty six thousand dollars and would have to pay it back personally within ten days. At first it appeared he wouldn’t be able to do so, but at the last minute he found the money. I have again been reliably informed that he was given a “loan” by another employee. This employee was under investigation for sexual harassment. Within a few weeks of this incident, all charges against him were dismissed and the employee who had filed the charges resigned shortly thereafter and moved out of state.

Of course, I realize that this might not be the best example of “how the system works”.

Back in college, I used to work delivering bread. Believe it or not, this is a commission job; I was considered a salesman. All of us breadmen used to trade stories about how So and So pulled some stunt to increase his sales.

The best story was about some breadman who must have had balls of steel. He had a large grocery store on his route with a very busy loading dock. The breadman took advantage of the confusion caused by the business in a creative way. First, he would wheel in a 12-high (a rack of 12 trays, each holding 10 loaves, or 120 loaves total), catch the eye of the dock supervisor, and announce, “120 loaves.” As soon as the dock super got distracted, the breadman would wheel the rack outside, turn around and come back in. He’d then tell the dock super, “240”, as if he had brought in a brand new 12-high. On really busy days, he’d go up as high as 360 or 480!

This went on for about 6 months, and could have gone on forever, except that the store was finally audited. No one could figure out why their purchase of bread was so high but sales were so low, so they monitored the dock (I believe with a surveilance camera). It didn’t take long for this enterprising breadman to get busted.