08Feb

$1M Embezzlement Scheme Landed Former Controller in Federal Prison

Prevent This From Happening to YOU!

The former controller for a metal-stamping company was sentenced to 33 months in federal prison. The former employee devised a fraud scheme to steal funds which should have been paid to the company. The scheme appeared to have begun when the metal-stamping company promoted the former employee to the role of controller in 2003. As part of that new role, he managed the company’s bank accounts and bookkeeping records but soon began siphoning money from the firm.

According to prosecutors, the former controller pleaded guilty to one count of mail fraud and one count of filing a false tax return.

Read the full story here for more details.

Prevent This From Happening to YOU!

  • Limiting the controller’s or bookkeeper’s access to signature stamps, blank checks and cash can serve as a safeguard against fraud. In addition, requiring a counter signature on all checks is another precautionary means to prevent fraudulent behavior.
  • Conduct surprise audits periodically to either detect theft earlier, or prevent it from occurring in the first place. This can detect possible discrepancies in the financial records.
  • Mail control is a smart way to prevent/deter fraud. Rather than having invoices and payments that are delivered directly to the AR/AP Finance department, consider having them first opened by another trusted employee, logged by that employee into a system/spreadsheet and then delivered to Finance for posting/depositing.

Make Sure Your Clients Take a Proactive Approach To Protecting Their Business Should a Loss Occur

Make sure your clients have crime insurance. Take the steps to ensure that your clients are covered by calling one of the Berkley Crime team members listed below.