Trio Accused In California’s Largest-ever Municipal Embezzlement Was Back In Court

Former Pasadena city employee who is accused of defrauding the city out of $6.4 Million returned to court last month along with two others that were charged in a 60-count complaint alleging embezzlement and grand theft.

Prosecutors claim that between 2004 and March 2014, the former public works department employee created false invoices for an underground utility project.  After a city audit was performed, it revealed that the former employee submitted almost 300 fraudulent invoices.

Pasadena officials reported that the city recovered a payment of $5 Million from its insurance carrier.  Since that time, the city has taken steps to increase oversight and control over the city’s finances. Read the full story here for more details.

Prevent This From Happening to YOU!

Employees commonly use false invoices to perpetrate fraud. The best method for an employer to protect themselves is to ensure that adequate controls are in place. Here are some helpful tips to avoid becoming a victim:

• Implement a system that spreads out the financial duties of the business among two or more employees.
• Insist that all employees, especially those with financial responsibilities, take a mandatory vacation of at least one week of consecutive days.
• Set clear standards from the beginning by implementing a company-wide written code of conduct that includes a zero tolerance policy for employee theft. You could also include an anonymous theft reporting system.
• Conduct regularly scheduled and surprise audits. This can serve as a deterrent.

For Lessons Learned from Pasadena’s $6M Embezzlement Click Here

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.