Nonprofit Public Interest Law Group Sues Audit Firm For Missing Embezzlement

Former office manager of a nonprofit public interest law group was sentenced to more than 4 years in prison. The former office manager fraudulently took more than $1M. In handing down the stiff sentence, the judge said he wanted to discourage others from engaging in similar behavior citing a criminal case from the former office manager’s past that contained similar allegations.

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Now the nonprofit law group has filed suit against its auditing firm, claiming that its auditors failed to discover that the former office manager had been embezzling from the group over the past 12 years.

The attorneys for the nonprofit stated that the auditors did not undertake any meaningful effort to confirm that attorney fees paid to the group were fairly reported and reasonably accounted for.

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Prevent This From Happening to YOU!

Fraud detection and prevention should be an ongoing initiative.

To help your business protect themselves from fraud, here are some helpful suggestions:

• Perform a background check on potential employees before hiring them. *
• Create management reviews and independent audit committees.
• Offer fraud training for management and employees.
• Purchase Crime insurance.

* Employer should check with legal counsel about complying with federal/state/local laws regarding background checks.

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.