34 Year Old from Queens Arrested for Defrauding Ex-Employer of $4.4M

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A 34-year-old man, from Queens, New York, was arrested on February 24th for his involvement in a years-old scheme to defraud his former employer out of approximately $4.4 Million.

According to the allegations contained in the complaint, which was unsealed in Manhattan federal court on February 24th , from at least July 2018 until at least August 2022, the 34-year-old engaged in a scheme to defraud his former employer of approximately $4.4 million through false invoices designed to look like those received from legitimate suppliers of the company. The former employee used his position as the company’s purchasing manager to process the fraudulent invoices for payment. In doing so, he would often attach the fake invoices to email messages that, in some cases, he would send on behalf of employees of the company’s real suppliers, so that it would appear that the real suppliers were requesting payment for the fake invoices.

The false invoices, however, stated that payment was to be made to entities with names that often differed slightly from the true providers. The 34-year-old then formed companies and opened bank accounts in the name of some of the entities listed for the payment of counterfeit invoices so that he could collect the payments that the company made on counterfeit invoices. He repeated these fraudulent tactics with more than a dozen fictitious entities and caused the company to pay approximately 40 false invoices totaling approximately $4.4 million.

Click here to read the full release.

Prevent This From Happening To YOU!

Invoice fraud can be a real danger to organizations and should not be ignored. You may believe that your accounts payable process is airtight. However, the post-pandemic increase in remote workers can mean a reduction in an organization’s control over AP processes. Below are a few tips that will help reduce the risk of your company falling victim:

  • Employ 3-Way Matching – If you can match each invoice to a purchase order and receipt of goods or services, then you’re much less likely to pay a fraudulent invoice.
  • Watch Invoice Amounts – Amounts on invoices can provide clues that the invoice isn’t on the up-and-up.
  • Keep Up Morale – Invoice fraud can come from inside the company or from an outside source. Happy employees are unlikely to commit fraud and more likely to catch fraud from outside sources.
  • Effective Vendor Management System– Fraudulent invoices are typically issued under fake business names or by the use of a legitimate name with a fake address or bank account number. Institute an effective vendor management system to make it easier to manage vendor risk efficiently to significantly reduce the chances of fraud.

Click here to learn more.

Source: www.nextprocess.com

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