A Houston-area man has been sentenced for embezzling more than $1 million from his employer to fund an online gambling habit.
According to the U.S. Attorney’s Office for the Southern District of Texas, the 34-year-old man used his company credit card approximately 217 times between May 2022 and January 2024 to divert funds through an online payment account opened in his wife’s name, eventually transferring the money into personal bank and gambling accounts. He pleaded guilty and received a 24-month federal prison sentence, three years of supervised release, and was ordered to pay $1,081,722.96 in restitution.
The matter underscores how gaps in internal oversight, such as limited monitoring of company credit cards and infrequent financial reviews, can allow misconduct to escalate undetected, ultimately exposing organizations to substantial financial loss.
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Prevent This From Happening TO YOU!
Recognizing these vulnerabilities, we’re sharing a few suggested best practices that may help strengthen controls, improve visibility into financial activity, and reduce the likelihood of similar incidents. Some include:
- Strengthen Oversight of Company Credit Cards: Regularly review and reconcile corporate card activity to detect unusual or repeated transactions, especially ones routed through third‑party payment platforms. The 34 year-old man misused his employer’s card more than 200 times without immediate detection.
- Implement Segregation of Duties: Limit opportunities for a single employee to control spending, approvals, and reconciliation. The DOJ matter highlights how long-term misuse can occur when one employee holds unchecked access.
- Require Multi‑Level Review of Digital Payment Transfers: Because funds in this matter were routed through an online account in the employee’s spouse’s name, businesses should carefully review digital transfers, even small, recurring ones, for legitimacy.
- Monitor for Signs of Employee Financial Distress or Gambling Issues: The Houston-area man admitted that his actions were driven by an escalating online sports‑gambling addiction. Organizations may benefit from training supervisors to recognize red flags and offering confidential support resources.
- Conduct Periodic Independent Audits: Third‑party or cross-department audits can catch patterns internal teams may overlook, especially schemes that unfold gradually over months or years, as seen in this matter.
Sources: https://www.netsuite.com/portal/resource/articles/accounting/three-way-matching.shtml, https://www.shaunstoltz.com/2025/02/14/5-best-practices-for-conducting-effective-surprise-audits/, https://trustpair.com/blog/call-back-procedures/ , https://www.acfe.com/whistleblower-hotline-report and https://www.padgettadvisors.com/blog/how-to-spot-and-prevent-invoice-fraud-before-it-hurts-your-business/
Encourage your clients to take a proactive approach to protecting their business in the event of a loss!
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.
Sincerely,
Michael Beranek
Berkley Crime
Experts focused on your protection. We deliver.
| National Practice Leader Michael Beranek (646) 522-7362 [email protected] | East Regional Manager/Commercial Crime Product Leader Matt McNamara (212) 497-3707 [email protected] |
| West Regional Manager Brian Platt (720) 979-1155 [email protected] | Renewal Team Leader Cheryl Yorio (860) 466-7379 [email protected] |