Embezzlement, Fraud, Stealing — OH MY!!

It goes without saying that small businesses are more susceptible to embezzlement, but companies of all sizes can be just as vulnerable if the appropriate levels of internal controls are not in place. Here are some of the headlines from a weekly newsletter – Fraudulent Friday by Coleman.

Bookkeepers Embezzle Over $1 Million From Small Business Clients – Small restaurant owner paid over $130,000 in payroll taxes to the IRS to only later find the funds had been diverted to their bookkeeping firm. The bookkeeping firm used their access to the small businesses’ accounts to transfer the payroll tax funds into their own checking account instead of making payments.

When IRS sent delinquency letters to the business, the bookkeeping company claimed it was a timing difference.

It was not until they applied for their Paycheck Protection Program loans did they discover they owed hundreds of thousands of past-due payroll taxes.

Law Firm Bookkeeper Pleads guilty to stealing $1.7M from Employer – In this case, the law firm’s bookkeeper and financial manager were given complete control of the firm’s business accounts with no oversight.

The bookkeeper was given authority to issue business credit cards to employees and to close the accounts for those who left the firm. The bookkeeper began using office credit cards assigned to employees or former employees to make non-firm-related purchases totaling over $1.2M. Then, she added to her scheme by slowly withdrawing an estimated $417,000 in funds from the operating account. She disguised the withdrawals as vendor payments.

Bookkeeper gets 4 years in Prison for Embezzling Over $1 Million from Medical Practice – Office manager and bookkeeper used her position and wrote business checks to herself to cover personal expenses. To hide her illicit actions, the bookkeeper prepared false business financial records that overstated expenses and estimated tax payments. She then opened a business bank account in the medical practice owner’s name without his consent, deposited checks from the state department of revenue into her own account, and falsified documents. Her web of deceit just goes on!

At B2 Management & Consulting, we understand the need for internal control processes. All of our team members have full background checks performed during the hiring process. Every financial statement and the underlying support documents are reviewed by someone in management before they are submitted to the client. We also understand how to assist you in implementing your own internal controls.

Call us and let us help!