$6.7 Million Embezzled by Former Montgomery County, Maryland Official

Second in command at Montgomery County’s Economic Department has pleaded guilty to embezzling more than $6.7 million in county funds. The former employee controlled the disbursement of county money for new businesses or those needing some assistance on how to become a successful company.

In 2010, the former Chief Operating Officer created bogus invoices, approved payments then routed County funds through checks and direct deposits to bank accounts he organized. The scam was exposed after the IRS analyzed reports of skeptical activity made by several casinos as the former Montgomery County employee would bring cashier’s checks to gambling venues in Delaware, West Virginia and Las Vegas. He has pled guilty and faces 20 years in federal prison for wire fraud and three years for making false statements on his tax returns.

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Prevent This From Happening to YOU!

Embezzlement can happen anywhere and at anytime. It happens when a trusted employee is given responsibility over money or another form of property and she/he steals it for personal gain. It is important to be aware of embezzlement and how to protect the business. Below are Five Disbursement Tests to perform on most any audit to assist with fraud prevention:

• Check for duplicate payments. Accounting can generate the payment of the same invoice twice, allowing an employee to steal and convert the second check to cash.
• Review vendor list for similar names. Fictitious vendor names may mimic real vendor names. Also audit the addresses – a P.O. box or a home address may be an indicator of a fake vendor
• Pay particular attention to new vendors that provide services rather than physical products (e.g., inventory)
• Physical products leave audit trains; services, less so.
• Compare your vendor addresses with your accounting staff’s payroll addresses. Those individuals who have the ability to set-up vendors can create fictitious vendors using their home address.

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.