A year-long accounts payable audit recently culminated in the arrest of the former chief financial officer of California-based restaurant chain Hennessey's.
James Cram was charged with 19 felony counts, including grant theft and money laundering, when the AP audit's findings indicated that he had embezzled more than 1.1 million from the company, which is owned by local businessman Paul Hennessey.
"Mr. Cram was basically writing checks to himself or his own creditors (and) signing Mr. Hennessey's name to it," Shawn Freeman of the Redondo Beach Police Department told the Laguna Niguel Patch.
The misappropriation of funds was not discovered until after Cram left the company last year, according to the Easy Reader News. After an internal audit uncovered financial inconsistencies, the police were brought in.
"At this point, our investigation has been very successful," said Joe Hoffman of the RBPD, as quoted by the news source. He praised lead investigator Dave Arnold's tenacity in securing the felony charges.
Cram's embezzlement went unnoticed during his four-year employment with the company. Conducting regular AP audits can help companies identify misappropriation of funds early, avoiding potential future losses.