“A Trusted Friend” Steals $103,000 from Therapy Business
|November 5, 2012||Posted by Steve Webster under Accountants and Bookkeepers, Payroll, Small Business Fraud|
This news story is about a bookkeeper who stole $103,000 from her employer over a 4 year time period. Apparently she was processing the payroll and paid herself twice for a total of $76,000. The “trusted friend” also wrote company checks to herself for $27,000. The fraud wasn’t detected until after the bookkeeper was fired.
The news story doesn’t explain if she wrote the checks out in her name or if she tried to hide the fraud by writing checks to a fictitious company she created. If the company checks were in her own name, this fraud should have been very easy to catch. Either way, she obviously did not have any oversight from the owners or outside accounting business. I assume she wrote the checks, signed the checks and reconciled the bank statement which is a very poor business practice.
Two simple steps to avoid this fraud would have been for the owners to review the bank statement monthly and review the payroll register every pay period. If they did not understand how to do a review or didn’t have the time, they could have paid an outside accountant a rate between $50-$100 a month to do simple audit checks for them that likely would have caught this fraud. It would have saved the owners a lot of money and hurt feelings. At the very least, the bookkeeper would have thought twice about writing checks to herself if she knew someone else was reviewing her work. The only thing the owners look forward to now is some jail time for their former bookkeeper and based on her age jail time is not guaranteed.
Let me know if you have any insight into this type of bookkeeping fraud.
[schema type=”person” name=”Steve Webster” city=”Sellersburg” state=”Indiana” postalcode=”47172″ ]