Corporate entities are often responsible for the funds of individuals, but when regulatory duties fall to one position, safeguarding large sums of money requires careful monitoring. In banking facilities, especially, an AP audit solution should be leveraged in order to diminish the possibility of fraudulent activity.
The Huffington Post reported that George Kalmar, former employee of Morgan Stanley, has been given a two-year prison sentence for embezzling almost £400,000 from the big-name entity between Sept. 2012 and Feb. 2013. As a high-ranking official in the finance firm, he had access to the company's funds and could, unilaterally, make fiscal decisions on behalf of the organization. According to the source, Kalmer used his access to these funds to transfer money into dormant accounts, which he then accessed later.
According to HITC Business, the accused was considered a "rising star" and was therefore removed from most scrutiny. Kalmar also used his seniority to order that money be transferred into the above-mentioned accounts by junior-level executives, which is how he managed to carry out his plans without risking immediate exposure.
The Huffington Post noted the money was spent primarily on adult entertainment in the form of prostitutes, drugs, expensive restaurants and nightclubs. Inevitably, Kalmar's schemes unraveled, and after pleading guilty to the embezzlement charges, he was sentenced accordingly.
When anyone is given full access to a corporation's budget, the decision-makers responsible for the promotion are entrusting the individual. Although Kalmar is guilty of exploiting this trust, not all financial officers are predisposed to fraud. It's important, however, for organizations to safeguard their assets by leveraging accounts payable solutions. Financial institutions, especially, should consider how this strategy could help prevent crimes like the example noted above.