The trick to fraud is maintaining control. If you’re siphoning company funds into a bank account that you own through a dummy vendor, it’s key that you’re the person who approves those transactions and it’s even ideal if you can literally or figuratively cut the check. Yes, those are atrocious internal controls, but as we’ve documented on this site many, many times, lots of businesses have atrocious internal controls. Also, it helps if management is clueless.
Anyway, if you’re a business owner or manager and you have the slightest inkling that something untoward is going on in your accounting department, try this: Promote your prime suspect and reassign all their responsibilities to someone else.
This story from the Deseret News reports on the allegations against Daniel Scott Richardson, who is accused of swiping more than $1 million from his former employer, Pegus Research Inc., and includes how the jig was upped:
From about April 2013 through December 2016, prosecutors say Richardson made “180 unauthorized transactions totaling just under $1.3 million.”
Some of the items Richardson purchased using his company’s money included a Hawaiian vacation; two Lincoln SUVs for more than $50,000; hotel stays; groceries; tens of thousands of dollars of airline tickets from Delta, including trips to London, Amsterdam and Australia; European hotel stays; $10,000 at Pottery Barn; and thousands of dollars of purchases from Apple and Amazon, the charges state.
The fraud was discovered by the person who took Richardson’s position after Richardson was promoted to senior accountant, according to the charges. He was fired on Dec. 5, 2016.
What’s not clear is if Pegus thought Richardson was doing a great job or if they got wind of his globetrotting or his spending sprees at Pottery Barn and wanted to flush out their suspicions. If it’s the latter, then good for them. If it’s the former, well, then catching a fraudster by dumb luck works too.