Accounts Payable AnalysisFormer newspaper accounting manager receives jail time for embezzlement
Few businesses can afford to eschew the use of nine times.
Editor & Publisher noted that data in regard to embezzlement in the newspaper industry is scarce, as these publications are often hesitant to report crimes committed against them. However, the source stated that when purchasing manager Betty Finley asked 50 managers at the Newspaper Purchasing Management Association Conference to anonymously recount any such incidents, she received around a dozen stories within minutes.
However, newspapers aren’t the only businesses hesitant to talk about insider fraud. Many companies see admissions of these trespasses as embarrassing, and leaders are afraid that widespread knowledge of such events will damage their organization’s reputation. Putting strong financial controls in place from the start can help any enterprise avoid finding itself in this position.Ex-credit union employee pleads guilty to embezzlement
Close monitoring of finances is particularly vital at banks and other financial institutions. In many cases, access to both company and customer funds is built into the jobs of all or most employees at such enterprises. Accounts payable audits have a key role to play at these firms – and a recent case served as a reminder of this fact.
The Credit Union Times recently reported that Teresa Humphries of Madison Heights, Va., pleaded guilty to charges that she embezzled more than $1 million belonging to the Lynrocten Federal Credit Union, where she formerly worked as a teller. In the wake of Humphries' theft, the Lynchburg, Va.-based financial institution had to shut its doors.
Humphries' scheme was an ongoing, long-term operation that was implemented on a regular basis. According to the news source, Humphries stole between $3,000 and $4,000 every month between 2007 and 2013.
"Her brazen and persistent acts of fraud violated the trust placed in her by the Lynrocten Credit Union and its customers," United States Attorney Timothy Heaphy commented, according to the news source. "This office will continue to vigorously investigate and prosecute instances of financial fraud and do our best to provide restitution to the victims of these crimes."
According to The Roanoke Times, the U.S. Attorney's Office claimed that Humphries had help from the credit union's manager in the fraudulent scheme. The 56-year-old woman alleged to investigators that she worked alongside Linda Newcomb, her supervisor, for more than 10 years in stealing credit union funds by taking out fraudulent loans in the names of the organization's customers and then depositing the funds into family accounts. Newcomb, however, has denied these allegations, and Humphries opted to withdraw her statement at a later date.
Meanwhile, the Culpeper, Va.-based Northern Piedmont Federal Credit Union has filed a civil case against Humphries, Newcomb and Becky Nichols, another former teller at Lynrocten.Ex-banker accused of embezzlement arrested following disappearance
The intelligence of executives who commit fraud is one of the primary reasons why accounts payable audits are so vital at corporations. Unfortunately, some fraudsters are just as smart when it comes to avoiding capture as they are at embezzling funds.
WJCL reported that Aubrey Price, a former banker at Montgomery Bank and Trust in Ailey, Ga., was recently arrested by police during a traffic stop after he committed a road violation. Although he evaded authorities for 18 months, Price faces a charge of bank fraud for allegedly stealing $21 million from the bank at which he formerly worked.
Prior to his arrest, Price was last seen boarding a ferry in Key West, Fla., in June 2012, the source reported. At approximately that same time, the ex-banking executive sent a note to investors informing them that he had lost a large sum of their money and attempted to hide that fact through fraudulent means, according to a statement from the Securities and Exchange Commission.
"Price admits that he 'falsified statements with false returns' in order to conceal between $20-23 million dollars in investor losses," the federal complaint against Price alleged. The statement also claimed that over a three-year period, Price and accomplices raised $40 million by selling membership interests in unregistered funds.Former CFO indicted on fraud charges
All too often, companies put themselves in jeopardy by placing almost complete control of their finances with a single executive. When oversight of corporate bank accounts and income is consolidated in this way, rather than continually monitoring finances through accounts payable audits, fraud can go undetected for quite some time.
According to the Federal Bureau of Investigation, Gregg Pierleoni has been indicted on charges that he embezzled nearly $6 million in funds from a moving company at which he formerly held the position of chief financial officer.
The Greenwich Time reported that Pierleoni, whose official residence is in New Fairfield, Conn., held his former executive position at Collins Brothers Moving Corporation, which is based in Larchmont, N.Y.
The charges Pierleoni faces include wire fraud and mail fraud, the FBI noted. The 59-year-old man's alleged crimes took place over a six-year period, and he held the office of CFO at Collins Brothers from 1987 to 2013.
In the FBI's statement, prosecuting attorney Preet Bharara accused Pierleoni of using the embezzled funds to support habits beyond his means.
"As alleged, Pierleoni abused the trust placed in him by his employer to steal a substantial amount of money so that he could enjoy a lavish lifestyle. He now faces having to pay the real price for that lifestyle," Bharara commented. The indictment alleges that Pierleoni spent company money to pay off his American Express bills and purchase airline tickets, as well as restaurant meals, sports memorabilia and artwork.
George Venizelos, assistant director for the FBI, reaffirmed the agency's commitment to pursuing those who commit crimes like the ones of which Pierleoni has been accused.
"The FBI will continue to investigate and hold accountable individuals who steal and line their pockets with their victim's' hard-earned money," Venizelos said. The mail fraud and wire fraud charges on which Pierleoni has been indicted each carry with them a maximum sentence of 20 years' imprisonment.YMCA employee charged in embezzlement case
Unfortunately, organizations with charitable or philanthropic goals are just as susceptible to fraud as for-profit businesses. In fact, because they're more concerned with bettering the lives of others than they are with satisfying investors, it can be easy for these entities to maintain less-than-optimal visibility into their finances.
According to the Bethlehem Patch, Theresa Leguillow of Allentown, Penn., was recently accused of embezzling more than $100,000 from the local YMCA. The 45-year-old woman worked for the organization as a building manager, overseeing apartments in the YMCA's Affordable Housing Division.
Among other alleged crimes, police accused Leguillow of withholding $50,000 in rent money that should have been deposited into the YMCA's bank account, according to the news source. She also allegedly failed to render tenants' security deposits to the organization, and the affidavit claimed that Leguillow collected fraudulent emergency shelter grants from the Northampton County Department of Community and Economic Development by using tenants' names without authorization, in addition to overcharging Catholic Charities in their subsidy payments.
The Lehigh-Valley Express-Times reported that Leguillow has been released from jail after her bail was reduced to $1,000.
The case makes it clear that accounts payable audits aren't relevant only to corporations – they can also help ensure that nonprofit organizations can continue pursuing their charitable goals.
Duplicate PaymentsUsing P-cards can save money, boost efficiency
The use of procurement cards (P-cards) is an increasingly pervasive trend in accounts payable management. With the use of P-cards, a variety of organizations can reap numerous benefits, but they also must be careful to keep the challenges, including auditor believes that the use of P-card systems has saved West Virginia approximately $145 million per year. The cost reductions stem from sources such as the lower price to process transactions and the rebates that accompany some purchases.
The NAPCP, the professional association for the commercial card and payment industry, stated that when companies switch their payment methods from more traditional processes to P-cards, they may experience efficiency savings of between 55 percent and 80 percent. Additionally, implementing a P-card system can help managers accurately track expenses while helping businesses procure goods more quickly.Cash flow and payment terms go hand-in-hand
One thing that is clear to every business owner is that cash flow is essential to keeping a company running smoothly. When organization leaders don’t have a strong grasp on how money is moving into and out of their enterprise, it’s possible for numerous problems to crop up.
According to Staples, properly arranged payment terms can play a crucial role in case.
Karl Andersson, CEO of Tech Insight, stressed that because payment terms have a direct effect on when an invoice is entered and when the actual cash is dispersed, misunderstandings can lead to negative impacts. For example, if a business is late in making a payment, the vendor may submit a second invoice. In these situations, Andersson warned that trouble can start if a second check is submitted. Duplicate payments may start to take a toll on the firm’s ability to meet its financial needs if merchants take advantage of these simple mistakes.
Fortunately, the answer to avoiding such mismanagement issues isn’t complicated. With better insight into payment terms and the right accounts payable solutions, organizations can be sure that cash flow remains strong.
To learn more, download Tech Insight’s whitepaper, Payment Term: Friend or Foe?Ind. drilling mogul expected to plead in embezzlement case
The public has looked rather unfavorably upon the oil industry in recent years, especially as gas prices have risen and more sustainable energy sources have become available. In light of these negative feelings, one would expect executives in this sector to be inclined to do whatever it takes to ensure that they are well-regarded by consumers. And surely, some have made efforts to shore up their companies' reputations. But a recent case served as a reminder that not all oil companies have learned their lessons – in addition to making clear how far-ranging the effects can be when firms fail to perform duplicate payment audits.
According to TribLive, a federal court recently charged Larry Winckler, a former executive at Indiana-based oil drilling company Falcon Drilling, with embezzling more than $9 million in corporate funds. The formal charges include mail theft and falsifying income tax returns. The alleged crimes took place over a considerable window of time, from February 2004 to February 2012. The prosecuting attorneys claimed that the 53-year-old wrote fraudulent checks, which he then concealed by forging invoices and financial accounting documents.
Court documents claimed that Winckler used the stolen funds for "personal expenses, gambling or uses entirely unrelated to any legitimate Falcon business expense," the Pittsburgh Post-Gazette reported. The former drilling company executive allegedly perpetrated the scheme in part by billing the company for "'bits' or other fictitious materials."
Reportedly, Winckler and the federal government have worked out a plea deal.
"He'll plead to everything, and we'll see how it plays out," said Martin Dietz, Winckler's attorney, according to TribLive.
Furthermore, Winckler is not the only person to have gone to trial in relation to the alleged embezzlement. In June, Daniel Pikel pleaded guilty to charges that he conspired with Winckler to cover up the embezzlement, TribLive reported. And in January, former Falcon controller Cheryl Brooks pleaded guilty to conspiracy, mail theft and tax fraud.Del. woman pleads guilty to embezzlement charges
At firms that specialize in financial services, it's essential to implement tools that protect against embezzlement of either the company's or the clients' money. Without effective oversight in place, it can be all too easy for employees at such organizations to take advantage of the position of trust in which they've been placed. Especially in instances where large amounts of money are at play, recovery audits are vital.
Reports of a recent case brought this truth to light. According to the Washington Post, Kimberly Drummond of Middletown, Del., pleaded guilty to charges that she embezzled nearly $350,000 from a New Castle, Del., branch of Discover Financial Services.
Court documents showed that Drummond was accused of having stolen these funds by falsifying Discover's accounting in an effort to conceal duplicate payments, the news source reported. Allegedly, she deposited fraudulent checks into her personal bank account and went on to put the embezzled funds toward her mortgage payments. The alleged scheme is reported to have gone undetected for around four years.
According to the Middletown Transcript, the Federal Bureau of Investigation stepped in to investigate the alleged crimes, which dated back to November 2008. On Dec. 12, Drummond pleaded guilty to embezzling funds from a federally insured financial institution. She faces up to 30 years in prison, in addition to six years of probation and a $1 million fine.
"Yet another breach of trust by someone entrusted to protect financial resources," U.S. District Attorney Charles Oberly remarked in an official statement, according to the news source. "These cases will be vigorously prosecuted by this office and appropriate punishment will be sought."
If Discover had implemented a duplicate payment audit system, the activities with which Drummond has been charged might have been prevented – or at least halted before being allowed to go on for as long as they did.Residential college advisors may benefit from P-card system
Companies aren't the only entities that can reap the benefits of purchasing card (P-card) systems. In fact, some universities are also starting to leverage P-cards for improved operations.
According to The Princetonian, RCAs' personal bank accounts. The news provider explained that RCAs would submit numerous receipts to show how they'd spent their allocations. Switching to a P-card system also means because of increased visibility, there will be a lower chance of fraud.
Director of Student Life Devon Moore told The Princetonian that RCAs will be able to funnel the time and effort they once spent on managing their finances into "community building."
Because P-cards furnish organizations with a great deal of convenience, reduce the likelihood of abuse and minimize the chances of duplicate payments, many enterprises will find modernizing accounts payable through these tools is a strong choice that results in a better-managed, more successful business.
Finance OperationsLack of financial controls results in lost money for Ohio school
Taking a hands-off approach to financial management is often a recipe for disaster. When organizations allow these operations to go unsupervised, they run the risk of encountering costly mistakes and fraud. Ultimately, this could put them in a position that will require the use of a crime.
The news source explained that the women are accused of using the money for numerous purposes, including giving out unauthorized Christmas bonuses, purchasing diet meals and non-school-related vacations. The audit noted that there were few internal controls and monitoring protocols in place to prevent such situations for occurring.
CSO Online explained that one of the major ways internal fraud can be avoided in through better oversight. A simple step that most organizations can take is to get multiple employees involved in various financial processes. With more people checking their work, employees are less likely to feel tempted to steal. By eliminating the opportunity to embezzle through stronger controls and audit solutions, businesses can ensure their financial health.Former Tenn. bank teller pleads guilty to embezzling funds
Another case of fraud committed by a former bank employee brought to light the need for accounts payable recovery audits at organizations that handle consumers' money.
According to the Nashville Business Journal, Kaley Gregory of Gallatin, Tenn., recently pleaded guilty to charges that she embezzled more than $264,000 from a local branch of Volunteer State Bank, United States Attorney David Rivera said in a statement. The 29-year-old woman formerly worked as the bank's head teller. She committed the crimes between 2009 and 2013.
The Tennessean noted that Gregory told the Federal Bureau of Investigation she falsified bank records in an effort to cover up her thefts. She admitted to entering fraudulent information into the institution's electronic accounting system, in addition to manipulating audits to conceal her actions. She allegedly used an account under the name of one of her relatives to transfer the stolen funds to her personal control.
"She kind of manipulated the system and we eventually caught it through our normal audit procedures," said Volunteer State Bank President and CEO Matt Ricker, according to the news source. "I guess you could say she's pretty sharp; she knew how to work the system."
One wonders if the institution would have caught the theft sooner had it implemented more effective audit solutions.Former rock management exec pleads guilty to embezzlement
The need for proper financial visibility to protect against fraud is not industry-specific. Rather, a recent case of executive-level fraud in an unlikely sector made it clear that companies with a range of specializations can benefit from tools like audit solutions.
According to a statement by the King County, Wash., Prosecuting Attorney's Office, former Curtis, Inc., Chief Financial Officer Rickey Charles Goodrich recently pleaded guilty to six charges of theft in the first degree. Goodrich's company is best known for providing management to Seattle-based rock band Pearl Jam. The charges stated that he embezzled more than $300,000 from the firm over a three-period ending in 2010, although he has already repaid $125,000 of that total.
Goodrich may face a considerable reduction in sentence if he makes good on his commitment to refund the remainder of the embezzled money.
"As part of the plea agreement, if the balance of restitution is paid before sentencing, the state will recommend a six-month jail sentence," the state attorney's office wrote. If he doesn't pay, he'll face a 14-month term.
The Sky Valley Chronicle reported that in addition to paying off personal debts, Goodrich allegedly purchased spa treatments and family vacations with the stolen funds. Hopefully, the case will encourage firms in the industry to be more proactive about protecting their internal finances.Girl Scouts official accused of fraud
In many organizations, high-ranking officials are often given enough power that abuses become easier to conceal. Recent years have proven that to be true in both the private and public sectors, but nonprofits and charities are also susceptible to fraud. Wherever employees are allowed access to and control over company funds, visibility into their actions with that money is essential, and accounts payable audits play an important role in protecting organizations from embezzlement.
According to the Los Angeles Times, Channing Smack of Marina Del Ray, Calif., has been accused by federal authorities of stealing $370,000 from the Girl Scouts organization, for which he worked in an executive capacity as a property manager. His primary responsibility in that position was to manage the Los Angeles-based property holdings of the Girl Scouts. Allegedly, Smack laundered $50,000 of the total amount embezzled and, if convicted, could face up to 10 years in prison.
After being confronted by the Federal Bureau of Investigation, Smack allegedly withdrew a large sum of cash from the bank accounts that were believed to contain the embezzled money, the source reported. Not long after that, the FBI arrested the 51-year-old man.
The L.A. Times noted that according to court documents, the alleged embezzlement took place for over a year, from August 2012 to October 2013. Smack is accused of having approved fraudulent invoices from ZB Land Maintenance and Engineering, a company registered in the name of his deceased brother.
An official statement from the Girl Scouts said that the crimes of which Smack has been accused "clearly violate the fundamental values and beliefs of the Girl Scout organization and the girls it serves," The Associated Press reported. The organization fired Smack in advance of his arrest. Public defender Miriam Yasmin Cader, who is representing Smack, elected to give no comment on the case.NC woman pleads guilty in embezzlement case
Employee fraud can have disastrous consequences for small businesses – and without financial audit solutions, it can be very difficult to detect discrepancies in accounting.
A case that recently came to a close after several years provides evidence of this fact. Back in 2010, WRAL reported that Sue Byrd Hicks of Lumberton, N.C., had been charged with 530 felony counts in connection with her alleged theft of funds from her employer, textile company Accent Fabrics.
According to the news source, the company only began taking a closer look at its finances after the IRS informed the owner that the firm owed the government several years' worth of back taxes.
On Dec. 9, 2013, Hicks pleaded guilty to 348 of the charges, the Robesonian reported. Her sentence for the $200,000 embezzlement does not include prison time, however. Instead, Hicks will serve six months of house arrest and five years of probation, in addition to repaying the company's $29,000 in back taxes and putting in 500 hours of community service.
Perhaps the most disturbing component of the case is how serious the consequences of the crimes were. According to the news source, Accent Fabrics had to shut its doors in the wake of the events.
"The sad part about this is the fact that Accent Fabrics went out of business solely because of her actions," said District Attorney's Office investigator Erich Hackney, according to the Robesonian.
Meanwhile, former Accents Fabrics owner Charlie Hall noted that he gave Hicks, one of his longest standing employees, more trust than she deserved.
"I'll be the first to admit that I should have kept better controls on her, but after 28 years, you think you can trust somebody," Hall told the news source. He's since opened a new textile business, although it took him "a couple of years," he said.
In the future, accounts payable audits might help Hall avoid making the same mistake twice.
Financial ComplianceDC woman admits to charter school fraud
Executive officials who are responsible for large sums of money typically have the autonomous authority to make decisions on behalf of the organizations they represent. As such, it is important for these enterprises to have a method of safeguarding their assets in case funds are endangered – whether externally or internally.
According to the Washington Post, Monique Murdock, the former executive director of a Washington, D.C., public charter school pleaded guilty to embezzling $29,000 in funds. Additionally, she admitted to having used a government-issued purchase card to make $11,773.92 worth of purchases during her tenure as the director of the U.S. Army's Cody Child Development Center at Fort Myer.
In both instances, Murdock held positions of power that made it easy for her to commit the crimes without other members of staff noticing The Washington Examiner noted that her accounts payable fraud began in 2008 when she wrote five checks with school funds, totaling $29,000, that were deposited into her own checking account.
In order for organizations to prevent issues like the above-mentioned from occurring, decision-makers should deploy AP audits. Additionally, enterprises should consider adding a reinforced system of checks and balances to preempt any fraudulent activity.What really deters white collar crime?
Preventing embezzlement is among the most important elements of ensuring a company remains in good financial standing. But what really keeps employees who might otherwise dip into business accounts from misappropriating funds?
According to Reuters, the answer might not be the threat of legal action. The source reported that the United States government is currently being pressured by the American Bar Association (ABA) and many federal judges to locking someone up that doesn't impose a threat to safety for the purpose of deterrence," said James Feldman, a Florida defense lawyer and member of an ABA task force rallying for revisions, the news provider reported.
While some businesses may be concerned that a reduction in the legal repercussions for embezzlement and similar crimes will place them at greater risk of suffering at the hands of insiders, this may not be true. In fact, the frequent use of audit solutions can be an even better way to deter misappropriation than the threat of jail time. Employees require the opportunity to steal to consider embezzling, and AP audits can successfully eliminate an opening staff members may look for.Audit-exempt firms not necessarily better off
Compliance requirements serve an important role in many industries, and the Sarbanes-Oxley Act is no different. However, just because these standards exist, doesn't mean that all American businesses must submit to audits of their internal financial controls. However, it may be beneficial for all companies to conduct necessarily a good thing. For example, the news provider stated that the Government Accountability Office found 64 percent of financial restatements between 2005 and 2011 stemmed from exempt enterprises. Meanwhile, exempt businesses that opted to still use audit solutions made fewer restatements.
The Global Association of Risk Professionals pointed out that a survey by Protiviti showed that while it can initially be costly to come into compliance with Sarbanes-Oxley, organizations do generally see the long-term benefits of following these guidelines as outweighing the initial budgetary strains. Additionally, 70 percent of respondents asserted that their internal financial controls had improved since achieving compliance.P-card use can enhance compliance
For any company, compliance with industry standards is of the utmost importance. If a business doesn't have the right controls in place, it's possible that errors or mismanagement issues will spiral out of control and result in violations, ultimately taking a toll on the firm's productivity, reputation and more. No organization can afford the negative effects that come with non-compliance, and this is one reason the use of procurement cards (P-cards) is becoming more common.
According to American Express, there are far more benefits to utilizing P-cards than saving on processing costs and other advantages often associated with this payment method. The source noted that in one study by Accenture, researchers revealed that P-card use can improve compliance by approximately 33 percent. Another study by the Aberdeen Group found that P-card users valued the technology because of how it simplified the process of complying with Sarbanes-Oxley emma watson pokies regulations.
Sun National Bank explained that P-cards bolster regulatory compliance by making it simpler for organizations to accurately track expenses. Using electronic means of payment not only allows transactions to be automatically recorded, but it also helps enhance visibility, which allows leaders to react more quickly to any instances of inappropriate spending. Additionally, better compliance stems from being able to make more secure transactions over online channels.
Running a business well requires attention to financial management methods. In addition to taking precautions such as frequently using AP audits, decision-makers should consider the advantages of implementing a P-card system. If they do put such an initiative in place, they may be able to make maintaining compliance an easier and more intuitive process.
To learn more, join Tech Insight at its "The Hidden Value of P-Card and A/P Analysis" event in Chicago on August 14.Prevention can stave off fraud
Once an instance of fraud is found, it’s already too late. Many organizations have been faced with the shortcomings of their financial controls in a moment of crisis, but it shouldn’t take an incident to spur a company into protecting its accounts. Preventing fraud through audit solutions is one of the most effective strategy.
According to PropertyCasualty360, a recent Marsh webinar revealed that there were these instances, the source stressed that monetary losses are often not the greatest impact of fraud. In fact, the ensuing investigations, criminal prosecutions and bad publicity are what really take a toll on the organization.
Corporate Compliance Insights noted that in order to boost financial compliance and protect against theft, organizations should take a few basic measures to ward off fraud. The source recommended that these procedures should include such actions as forming an audit committee, performing risk assessments and establishing a whistleblower hotline.
Additionally, the news provider pointed out that employers should put comprehensive anti-fraud policies in place and train staff on how to play a role in the firm’s financial health.
Recovery AuditAvoid duplicate payments for a healthier business
When financial controls fall to the wayside, mistakes are likely to occur. In order for companies to be successful, leaders need to take steps toward ensuring accuracy and consistency. While prevention is key, there are steps such as performing a recovery audit that can be taken to come back from a misstep.
According to The Advocate, the Kenner Housing Authority in Kenner, Louisiana, recently discovered the source of its budgetary woes through the use of a recovery audit. Experts found that the agency had paid a former director more than $143,000 after his retirement, while these disbursements should have been capped at $8,800.
The audit revealed shortcomings related to internal controls, the news provider noted, with some processes being absent entirely. This opened the organization up for duplicate payments, overpayments and other financial issues. The Kenner Housing Authority also lacked a verification system for submitted invoices and tracking solutions to measure inventory levels.
RPI Consultants stressed that duplicate payments in particular can be devastating to enterprises of all kinds. The source pointed out that these mistakes are common and often go unnoticed until a vendor comes forward or a recovery audit is performed. Many of these issues never come to light, meaning that money can continue to leak.
RPI explained that duplicates can happen either in situations where invoices are submitted multiple times or when an AP processor makes a data entry error. In either case, prevention is the most effective way to manage funds.
In terms of auditing, companies should keep a few things in mind. First, it's important to implement audit solutions early on. By investigating account accuracy before errors become immediately noticeable, some of these problems can be staved off. In addition, if it appears loss has already occurred, a recovery audit may be able to find the source of the missing funds, allowing businesses to rectify their operations and finances.Construction company accountant sentenced to prison in embezzlement case
Every organization is susceptible to fraud if the correct preventative steps aren't taken. With the right financial controls in place, including the frequent use of to pay personal expenses.
In addition to serving the prison sentence, Lord is required to pay $640,000 in restitution, the news provider reported.
According to Michigan's Attorney General Bill Schuette, it's critical for companies to implement the right financial policies to stave off embezzlement. These include ensuring that all payments and reimbursements are accompanied by documentation, engaging in extensive record keeping and making sure to assign several employees to money-related duties.
Schuette noted that in the event embezzlement does occur, it's important for organizations to take the proper steps toward getting the lost funds back. These may include performing a recovery audit.Massachusetts University Official Charged with Larceny for Fraudulent Purchases
A former university official has been charged with Larceny after using his procurement card to purchase hundreds of Visa gift cards, which were then sold for cash or exchanged for illegal drugs.
Robert Walmsey, 34, was arrested on Tuesday after an investigation by the Massachusetts State Attorney General. He was a former employee at Framingham State University, where he worked at the school’s Office of Development and Alumni Relations.
Walmsey pleaded not guilty on Tuesday afternoon for three counts of larceny over $250, and two counts of Presenting fraudulent claims to an employer for payment. Bail was set at $20,000 cash. He will return to Framingham District Court on Thursday, September 4th.
The case is another example of how company-issued credit cards can lead to an increase in employee embezzlement. Businesses must ensure that they have the proper tools in place to identify fraud.Ohio man accused of embezzling credit union funds
When it comes to giving high-ranking officials control over company finances, trust simply isn't enough. Firms need the assurance provided by accounts payable and recovery audits in order to feel confident that executives aren't mishandling the funds with which they're entrusted.
According to the Cleveland Plain Dealer, William Memmer of Lakewood, Ohio, was recently charged with embezzling more than $1.8 million that belonged to the local GIC Federal Credit Union where he previously worked as a treasurer and assistant manager. United States Attorney Steven Dettelbach alleges that the 63-year-old man used the stolen funds to pay off personal credit card bills.
"Memmer took advantage of his high-level position of trust by falsifying records and funneling money that was not his to himself," said Stephen Anthony, a special agent in the Cleveland office of the Federal Bureau of Investigation, according to the news source.
Dettelbach said that following the alleged fraud, the GIC Federal Credit Union shut down and initiated the process of liquidating its assets, The News-Herald reported.
Memmer is also accused of having falsified the financial reports and records of the credit union, The Cleveland Plain Dealer noted. Federal claims allege that those fraudulent entries may add up to $5.7 million in falsifications of the organization's assets.Maine health care clinic closes after employee embezzles funds
Lack of care in financial monitoring can open the opportunity for less-than-trustworthy employees to perpetrate fraud – and often, the results can put an end to a business.
Bangor Women's HealthCare, a clinic based in the Maine city with which it shares its name, recently announced that it would be permanently shutting down its operations "due to unforeseen circumstances."
The events surrounding the practice's decision to close its doors, however, may be more complex than that statement suggests. According to the Bangor Daily News, Dr. Robert Grover, the clinic's owner, had been dealing with the fallout from an embezzlement case that began in 2009 when he reported unusual billing activity to the federal government.
According to the source, Dawn Zehrung, a former employee at the clinic, was charged with fraud and convicted in 2011. She was dealt a three-year sentence for fraudulent overbilling.
"Ms. Zehrung regrets her actions and is saddened by the closure of the practice," said Virginia Villa, the public defender who represented Zehrung, according to the news source.
But Grover's trouble's didn't end with Zehrung's conviction. The Bangor Daily News reported that the doctor had to pay the federal government nearly $300,000 in a settlement. Grover owns two other practices – and hopefully, he's implemented accounts payable and recovery audit solutions at those operations.