Fall/Winter 2016-2017 | BWD 11
By using the Corp Ltd. sales structure to siphon work into his own
pocket, he ultimately collected close to $1 million in improper earnings.
When the company became suspicious that fraudulent activity might be
occurring, human resources began interviewing employees — a move
that proved to be unfortunate. While some already knew about the
issue, others became aware as a result of these interviews, bringing more
attention to a situation that should have been kept under wraps.
By the time Rehmann was brought on board, the pot had already been
stirred, adding to the complexity and duration of the investigation. The
team worked around this hurdle and interviewed current employees
who were willing to talk, as well as former employees who were
undaunted by the prospect of coming forward. Rehmann also analyzed
financial records and created a timeline of the sales director’s activities.
Once the investigation was complete, Corp Ltd. was hesitant to
terminate the sales director or press charges. Their concern: negative
publicity that might result from involving law enforcement and,
potentially, the media. In response, Rehmann created a detailed report
that highlighted what the company stood to lose if they did not take
action, in terms of further monetary loss, reputational damage and
potential copycat behavior from other employees.
Ultimately, Corp Ltd. chose to dismiss the sales director to protect its
assets, data and reputation, and deter others from attempting fraud.
The crooked credit card
When a trusted employee at StarGaze Rentals* decided to commit
credit card fraud, she started small. If anyone questioned her, she
intended to claim that she carried many credit cards in her wallet and
accidentally used the wrong one.
When some time passed and nobody noticed, she began utilizing the
company credit card to a greater degree, and for much larger monetary
purchases. She also began funneling cash to her bank accounts
through pre-signed company checks. She eventually misappropriated
approximately $700,000 before the dubious credit card charges and
forged checks raised a red flag.
With that red flag flying, StarGaze Rentals immediately hired Rehmann.
Because company leaders did not alert employees to the fact that
something was amiss, Rehmann’s investigation was shorter than that for
Corp Ltd., and, as a result, more efficient.
After forensically analyzing financial transactions, it was determined the
credit cards the suspect had access to were indeed used inappropriately.
In addition, investigators confirmed the employee’s ties to the
bank accounts where the pre-signed checks were deposited. When
confronted, she confessed and was immediately terminated.
*Company name has been changed.
Investigative
strategy for
best results
If you suspect occupational fraud at your
company, turn to experienced investigators for
advice and consultation. This will help control
costs, protect evidence and preserve the
integrity of the investigation. Make sure the firm
you hire has forensic accounting expertise and a
law enforcement background.
To be as effective and thorough as possible, their
investigative strategy should provide:
1. Identification of key personnel to interview
(with the help of the organization’s
management team), followed by
investigative interviews.
2. Analysis of policies, procedures and
internal controls.
3. Implementation of background intelligence
research.
4. Employment of digital forensics analysis of
data and communications.
5. Enactment of forensic accounting on
appropriate financial transactions.
ABOUT THE AUTHOR
Bill is a Principal and Director of Operations
for Rehmann Corporate Investigative
Services. He served as a Special Agent
with the FBI for 26 years. He currently
oversees complex fraud investigations
for public and private sector entities.
Contact him today at
[email protected].