Part 3 of 10

Fraud Details

For emergencies Ted was a signer on the checking account because the owner and main check signer’s office was 25 miles away in a different city.

Forensic accounting showed Ted signed 73 checks paying $231,299 for various personal bills (mostly personal credit card accounts) over a fifty-seven month period. Additionally, there were 5 automatic payments hitting one checking account. 67 of those 73 checks were manual checks, which manual checks were supposed to be used for emergencies happening outside of normal check run periods. We can only imagine what emergency caused Ted to date the last manual check he signed, payable to one of his credit card accounts, early the morning he flew to Italy!

Towards the end of his embezzlement, one of the creative ways Ted found money to steal was to lock away a number of vendor checks in a file cabinet, to be mailed much later, if ever. When suppliers called looking for their check, they were given a check number, an amount, and a date and asked to be patient waiting for the mail.

In fact, the cash crunch got so bad under his watch, after the company credit line was used up in November, 2007, the former CFO put $12,500 cash of his own money (well, by then was it really Ted’s money?) into the company bank accounts, without telling anyone, then continued his fraud for six more months, until he was confronted, confessed and fired in May, 2008.

The last six months of company business was good enough that the former CFO’s last six months of embezzlement netted him another $55,219.

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