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Embezzlement

3t3d

Diamond
Joined
Nov 1, 2004
Location
WI
I keep thinking that maybe I should send this to Russ, and he could keep us all spellbound as the story unfolds....

This last few years has been IMPOSSIBLE to turn a profit. I could not understand that no matter how hard I worked, the cost always seemed to consume the invoices. I was carefully bidding jobs, and looking at the cost of materials, etc.. But in the final analysis the costs were always nearly what the invoices were..
I Knew I was going crazy...

Monday I come to work, and I have a letter from the IRS, they want to levy the entire business... WTH ? There should be no outstanding issues with them...
Cash flow has been hell, but I was sure I had several thousand in the account...

Then the bank calls, we are a $1000 in the hole!
Every dime I ever seen was GONE....
The IRS wants to levy everything.

You know, the typical Monday, same as every other week.

I went to the bank to get a handle on what is going on..

There are a couple of checks out of sequence, let's look at them...
In fact three checks, in the last week, with out of sequence numbers on them....

Who are they written to?

All to the accountant...

We pull up the pictures, and from across the room, I say that is not my signature.

We look back and find dozens, and dozens, and dozens of checks, all to her.....

$2,000 in the last two weeks..

This is someone who I just last weekend helped to move.. 90+ degrees and 80% humidity...
The entire house was just sickening... Crap from Walmart everywhere.
Hundreds of boxes of games in the basement, plastic throw away slum grade toys everywhere. New basketball hoops in the box, a dozen bicycle helmets for two kids, a nearly new bicycle that already does not work...
Sponge Bob going all day on the tube..
A new inflatable boat and paddles, toys, toys, toys..
I will not set foot in Walmart.. and here is trailer loads of crap from there.
Every last thing useless cluttering.

The best thing was that I did not know that I had involuntarily paid for it all.
There would have been a murder on the spot.....


Going back over the years, there was about $60,000 in forged checks.


What happened is that the expense check were entered for the proper amount. So, we got $400 from the steel co. the entry would be for $400.

A couple of months later, the entry would get changed to maybe $700..

This constant inflating the price of everything was hiding the missing money.
I would typically look at the journal entries for the current month, and it all would look OK.
But, at the end of a quarter or year, I had made NO money... Since all the old entries were cooked..

So, the bank told me to report it to the Police..
The Police told me to just get the papers from the bank....

We are going through it all to figure out what happened...


Forging check is pretty clear a crime of forgery.
Not sure what the cooking of the books is..

The Police dept is just a couple guy in a small village.

Not sure how to proceed and what to watch out for.

We called an accounting firm for advice. Not a lot of experience with the proper procedure to clean up a mess like this.....

She has NO assets, and after talking to her, she has Mountains of debt to the point that her wages (at her full time job) were garnished.

Nothing but a recent large dumpster of Walmart crap, and house still full of it. :bawling:
 
If your bank is honoring checks with sigs that do not match your sig card, they are not off the hook... especially with the "all to her" pattern. They are complicit, regardless of their "terms and conditions".

Did checks go to IRS on time?

Good luck man.

Chip
 
It won't help your money troubles, but I have a wood chipper and an excavator you can borrow. I hope it all works out for you.
 
I remember you hinting that there was an issue with something a while back.

Glad you found the leak.

Not sure how on Earth you will ever git'cher 60K back, but at least you plugged the hole!

Man .....
tsk.gif



--------------

Think Snow Eh!
Ox
 
The first thing you need to do is get a good lawyer. You don't want any of this blowing back on you. Who knows what kind of crazy things the IRS or creditors could cook up.

I know it's little solace, but at least now you know that it won't be so hard going forward to make money.

Best of luck,

Henry
 
Was she licensed and bonded? Might be able to recoup from the bonding company, or even YOUR business insurance, as it was a theft.

Good luck!
 
There is a term - forensic accountant - find one of those and they can help you build your case, however, even if you have a judgement for $60k on her, collecting it is another issue. Sorry for your loss but the best thing you can do is take over all the accounting yourself. Suckiest part of the job but you'll never be robbed while you are doing it yourself.
 
I am a firm believer the last thing a person should outsource is the handling of their money. With online banking and most people accepting credit cards bill paying doesn't take a lot of time. Sorry for all of this 3t3d, not trying to kick you while you are down, and hope by sharing your story others will be more careful. Worse yet she spent it all on Walmart crap, she was using your money to stimulate China's economy. Also it appears she has nothing of value to sell to pay restitution. You were nice enough to help her move and she was ripping you off? Nice to see people who have no conscience.
 
Just before I started at my current company they discovered that the accountant had embezzeled $300,000 or so. Fortunately shhe put it toward a house. Once caught the house was sold and my company got all the $$ back. It is beyond me how someone can be that greedy to try and take advantage of you and think things would just be unnoticed. :angry:

Wish you the best of luck getting back on your feet.
 
Happens everywhere.

Have a case in my town where the accounts receivable clerk at the county assessors office was taking money and making false entries.

Guesstimate at over $700,000.

Trial just over, guilty said the jury.

Funny thing there is no money trail: She blew most of the $$ at local casinos. Nothing to show for it!!!

Insurance company paid off the county months ago.

Currently waiting for the judge's ruling on the jail time.

My lady friend is a CPA/MBA. She has a lot of experience at forensic accounting. She says never trust your account, in house or a firm! Always have a third party do audits on a quarterly basis. Her main advice is the first time something does not seem right, get involved with the third party!
 
Yep, happens everywhere.

Last year they arrested the employee / bookkeeper for the local Habitat for Humanity chapter. How f^*&%in' low can you go to embezzle from HFH?

Steve
 
Keep track of every minute that you spend on this (and all accountant/lawyer time as well!) Be sure to go after the $60K plus these expenses!!!

Andrew
 
Wow, that sucks. I feel your pain, honest. I went through similar a dozen years ago. Full time employee got over 40K in 9 months and covered it up by making out checks for 941 deposits and shredding them. First clue I had was the letter from the IRS too. She was sick and missed 2 days of work and I got the mail myself, that's how I found the letter, she shredded the previous letters.

This was someone I knew for 10 years before I hired her, I thought was the best employee I ever had too. Turned out she was keeping her husband supplied with nose powder when his disability payments ran out.

Welcome to the F'ing club.

Since I experienced this, it seems EVERYone has a story, either themselves or someone they know or work for. Only a few make it to the papers.

First of all, DON'T PANIC! The IRS sends those scary letters out to get your attention. It takes a loong time before they actually take any action against you. I owed them over $60K in payroll taxes when I found out. They wound up abating all the penalties I owed them because of the situation. (Didn't affect any of the penalties she had already paid them, though) Communicate with them, let them know what is happening, that's the most important thing to do. Pay back taxes if you can, don't pay any penalties until it's over.

Call your county detective. The local guys won't know what to do. Once the DA gets it, you just have to stand back and watch. Don't do anything that makes it not a criminal case. For eaxmple, if you agree to let her make payments to repay you, it's then a civil case and you have to try to collect from her yourself. Keep it criminal, and the court system takes care of it for you, slowly of course, but surely. Once she is sentenced to repay you, the court system is responsible for collecting from her, and you are first in line ahead of any civil judgements. Took 8 years to collect $20K from her as a bartender in a biker bar, she finally paid off the last $3000 in a lump because she was arrested on a drug charge. She couldn't get off probation until I was paid, and she wanted to be off probation before her drug case came up for favorable treatment on that charge. After not being able to make $65/week payments, she came up with $3K in a lump. Let your imagination roam about what happened there. When it's criminal, no matter how broke she is, she HAS to pay what the court sentences her to pay.

I did find that it took a woman DA to call her on her shit. She manipulated the detective, and her public defender, even embarrassed her PD by getting him to ask for something outrageous in front of the District Magistrate when she was arraigned - she is good at it, worked on me too that's how she got away with it. Never spent a second behind a locked door, let alone a cell. The DA was a short little firebrand woman and immune to her wiles.

Forensic accountants - the county has them on the payroll.

If your bank is honoring checks with sigs that do not match your sig card, they are not off the hook... especially with the "all to her" pattern. They are complicit, regardless of their "terms and conditions".
This is true, but this might take civil action to get your money from them.

Above all, Don;t take it personal, and don't beat yourself up over it. Watching this woman manipulate the detective and others made me realize I had no chance against her, no matter how smart I thought I was. It's their job to know these things and she was way ahead of them. Your field is to make things, not to judge cheaters, good ones are very difficult to see coming. If you beat yourself up and make it all about you, questioning your own judgement, how could you trust someone so crooked, you'll wind up on anti-depressants. Find people to talk to who understand this, it's important for your sanity, and your continued business health. The good news is you ARE making money, it just went somewhere else.
 
Thanks everybody..

If she blew it all on drugs I would not be as upset as seeing it all go to Walmart. :angry::angry:

I went to the IRS, and was able to settle with them.

The bank does cover so many days of forgery. And Then THEY go after the forger :eek::eek::eek: !

I just two weeks ago, got a new insurance policy, with a new agent..

We talked about all the various policies, and what they covered.
I questioned the need for the Crime rider, asked what it covered.
She told me it covered theft of money. Theft of copper, etc, was covered under the shop policy.We decided that I didn't need that, since we have NO money in the office, everything is all on open accounts, etc..

THAT is the policy that would (have) cover the theft of money...

Talked to the insurance agent to give her a heads up... And we went over that previous conversation.....

Turns out, it is part of the overall package..... They would not issue the policy without it. So, it ~might~ be covered. Don't know yet. :eek:

She told me that the theft is considered to have happened at the time of discovery.


And about the wood chipper....
I am just a few miles away, south on HWY 53...



What I told my friends, was that I just got the biggest raise of my life.
From now on every job should be WAY more profitable... :cheers:
 
Always look at your bank statements!

Even if you don't do the books yourself, look at every item on the bank statement. If you are so big you can't look at every one, skip a week every now and then, but never be predictable.
 
Happened to my Boss, before I came on board. 100 Large, down the tubes. According to her (the office manager who stole it), it all went to the local Riverboat casinos. Took three years before it was noticed.

You need a forensic accountant to separate the thievery from righteous business checks. They know how to do it.

You'll never get your money back, but here's what you do: Once you have an unchallengeable dollar figure, get her (and her attorney) to sign off on it. Offer to drop the charges. Once you have that, 1099 her for the whole amount, and expense out the money. You can be a nice guy by not pressing for jail time, and the IRS will never turn her loose.
 
So... did you fire her, or is she buried in your backyard???? Will she be in to work on Monday???

Happened to a guy I worked for, just before I started there. About 250k.

It took many years for it to go to trial. Apparently, from what I hear, she was sentenced to 2 years, the judge looked down to do some paperwork or whatnot, and she turned around and gave a thumbs up to her druggie buddies. The prosecutor "Ah-Hemmed" and pointed it out to the judge, who then said "I'm sorry, I meant 4 years".

She got out in a bit over 2 years. I was in the honest book keepers office shooting the shit with him the day the first retribution check came. $25 bucks. 7 years after the fact.

I'm all for having a book keeper, but for god sakes, write your own damn checks.

It can be so super stupid simple, you have the checks under lock and key. The thieving bitch does her quick book thing. Then prints out a check, ON PLAIN PAPER. Paper clips it to the PO, the invoice and drops it in your box. You slam the plain paper check on the copier, slide in a real check, and hit copy. Sign it, put it in the envelope, and send it. Couple minutes a day, and she (its always a 'she' that does this) has no way to get into your account.

3t3d, sorry man, expensive lesson to learn. I do hope she is buried in your backyard though. I have a very low tolerance for thieves. I think they make great fertilizer.
 








 
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