Between 2003 and 2004, Microsoft accountant Randal Ray Seal embezzled more than $1 million from the company in order to expose alleged flaws in its accounts payable system, the Seattle Post-Intelligencer reports.
"I made the poor decision of revealing the defects by exploiting the flaws in the department's system," Seal said during a recent court appearance, as quoted by the news source.
TechFlash explains that Seal exploited a shortcoming in the company's accounting procedures to redirect money to a personal bank account opened in his mother's name. Despite numerous accounts payable audits conducted by the company, the misappropriation went undetected for one year.
Seal was recently sentenced to two years in federal prison. After a recovery audit determined the extent of the embezzlement, he was ordered to pay back the full amount. This equated to an additional $550,380 on top of the more than $515,000 in restitution that he had already paid to the company.
The Seal case underscores the importance for companies to conduct regular, thorough AP audits, and offers a reminder that accountants who know the system may be skilled enough to exploit loopholes for personal gain.