Why wasn't she caught sooner?

Factual Questions
21

My accounting prof used to work for an audit firm; he mentioned the case of a construction company VP who got caught - the usual way. He went on vacation so someone got to look at the paperwork he used to do. He was in charge of assorted construction projects, made up fake consulting companies and billed them to the projects, approved the work, signed the checks, etc. While he was on vacation, a secretary took the paperwork for one bill to an engneer and said “you were working at this site the last few months, can I process this invoice?” Cue fan impact…

I used to work on payroll programs, and people would say “oh, raise my salary”, or “create fake employees” as the joking way to embezzle. However, each labour cost is charged to a department where the department head views and approves the budget based on existing/planned headcount. Believe me, these guys will notice if their labour cost suddenly exceeds budget by tens of thousands.

The real money is in faking a service, invoice, and being able to approve the charge. The trick is to find opportunities where nobody questions the bills. One of our acountants where I used to work got caught after about $800,000. Same story, vacation - only this time the junior accountant was on vacation. The guy knew any cheque over $50,000 the bank manager ahd to personally verify, so all his cheques were $40,000. The lady who printed the cheques was on vacation, so they delayed printing a week; as a result, two cheques for $40,000 ended up going in together, and the bank manager called to verify. Again, cue fan impact splatter.

The scary thought is that the rest of the county management must have been totally clued out and severly math challenged to misplace 50% of the county budget in the OP. Theoretically the council or whatever approves the budget. Did they look at the numbers and think “that’s way too high” or “we don’t do that, why are we paying for it” or “that paving was never done”? DId they not compare notes with other counties to see why paving cost twice as much? I agree, the county management seems stupid or neglectful of their job beyond belief.

(I had a friend who was an accountant, told me about catching one lady who was stealing sales tax refund cheques. When he went to tell the owner and his wife, they were totally in disbelief. The wife said the lady was one of her closest friends. My freind told her, “Well, I hope she hasn’t stolen your jewelry and furs too!”. He said the look on the wife’s face was priceless - either something had gone missing, or she’d lent the lady some expensive stuff and was now wondering how to get it back…)

Part of the trick with getting away for so long with it, is to be so disarmingly friendly and charming that nobody suspects they are lifting your wallet while they hug you…

22

Apropos of nothing but I’ve always wondered about the long-term viability of my hometown’s decision to merge town treasurer and town auditor into one position.

23

One major help for avoiding this sort of problem is openness. If the town budget is published in detail, then hopefully someone / everyone does the math. 10 employees??? We only have 8! It cost $2M to pave the Eighth Line Road? I work at the contractor and he signed a contract for $1.4M - what gives? " secrecy and compartmentalization is an embezzler’s favourite friend.

Of course, the easiest way to hide the numbers is by buying off the council who would approve openness - “we better not publish any details or people will figure out you make $80,000/yr for a few hours a week…”

the number one rule in any acocuntability system is that the person who approves the cheques should not be the person who approves the expenditure. That way, at least 2 people have to collude.

24

[QUOTE=rogerbox]
This makes me think it’s more than just greed, but some sort of personality disorder. To me, there’s not any discernable difference between 20 million dollars and 50 million dollars (being realistic, there’s not a ton between 2 million in which I never have to work again and can have the time of my life and 10 either).
[/QUOTE]

The key there is to YOU there is no difference, because you’ve never had that sort of money and it seems like an incredible amount that you could never spend. The reality though is that once you have that level of money, you get addicted to it and to the lifestyle. Sort of like if you were dirt poor and looking at someone who is middle class and saying ‘Why do they need all those things? I wouldn’t need cable/satellite TV, or those cell phones or…hell, they paid $1000 for a PC AND several hundred more for an X-Box?? Why do they need all that???’.

From skimming the article, this lady obviously lived at a higher lifestyle that would have needed to be continuously supported. If you have horses, especially horse breeding facilities, that alone is a money pit that would need constant support.

As a for instance, I was reading about some professional basketball player who made millions over the course of his career. Maybe hundreds of millions. He’s past his prime, so now he’s playing for (IIRC) Turkey, and ‘only’ making around $60-70k per month. But he’s up to his eyeballs in debt because his average expenses are over $300k per month.

Anyway, as for the OP, I’ll also chime in and say RickJay hit it on the nose. This sort of thing happens when someone is given little or no oversight in such a critical position…and it’s a hell of a lot more common than people think it is.

25

Are you serious?

Why not just hire the town burglar to be the sheriff?

As to the amounts, the comparisons to pro athletes are apt. But XT really nailed it by pointing out that to most people, everyone posting in this thread is living a lifestyle of ridiculous extravagance, and they would find it utterly baffling that middle class First World people would complain about bills and debt. They’d look at people with one than one TV, or with bar fridges, or a living room they rarely use, or who buy books first-hand from a bookstore, and wonder how on earth you could be so wasteful as to fritter away the princely annual salary of $57,000 you’re making in your amazingly easy white collar job. Once you become accustomed to X dollars, you find a way to spend it all and want Y dollars.

26

Bad idea, if I recall relevant accounting courses correctly. Generally not considered good practice to have the same person handling everything money-related without someone else checking up, and it’s better to split functions (one OKs expenditures, another balances the checkbook, etc.)

27

A couple of related quick anecdotes:

A local bank has a policy that everyone must be absent from the bank for 10 consecutive days in each year. (e.g. leave on Friday, take a week off, return on Monday). Exempt employees must be absent for 17 days. Those days need not be vacation, so if you have a one-week business trip, you can combine that with a week’s vacation to complete a 2-week requirement. The policy, obviously, assumes that any embezzlement would surface during your absence.

Stealing time, not money:
As a summer job in college, I delivered bread to grocery stores and restaurants when regular delivery employees went on vacation. I started my job at 7am. By 8:30, customers were telling me that I was earlier than Sam usually was. When I returned to the office by 11am, it was assumed that I had skipped many of my customers. No. It turns out that Sam typically spent upwards of four hours a day goofing off and “drinking coffee” with the customers.

28

I think people like to say this but I dislike these sweeping statements. I’ve seen some graphs that prove money after sustainability really doesn’t buy happiness, but we’re talking mega-greed here. I probably make quite a bit less than the average doper (I’m probably quite a bit younger), but I remember even 5 years ago I was sleeping in a sleeping bag on the floor not knowing where rent money would come from or my next meal. Compared to that I do have a princely existance now, the fact that every paycheck I can have some fun took a LONG time to get used to after years of choosing which bill to not pay so that I could eat.

Sure I’d love more money but it wouldn’t be worth it to steal that money NOW and I live a very modest life, so it’s incomprehensible to me that if I had X million, I would deem it a good idea to steal Y million. There HAS to be some personality disorder involved, that level of greed is NOT normal.

29

All we need is a pair of pants, and a coat in winter and food. Everything else is “nice to have”.

30

I’m not trying to justify grand larceny. Obviously the thief noted in the OP is a rather extreme example of greed. Wanting another $X is one thing. STEALING it is another. I think it’s fair to say another $50,000 a year would make far more difference to me than an extra million made to that woman but I’m still not going to steal $50,000.

However, it is demonstrably the case that millionaires - even the ones who make their money legally and honestly - are in general no more satisfied with their lot in life than ordinary shmoes, and seem equally likely to overspend. I could cite examples all day. People are just weird when it comes to money, that’s all.

31

Some people need medicine to survive.