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.