Dual Control: Segregate duties among team members

Inventory is an area of your practice where segregating duties will greatly reduce the risk of theft. 

If the person responsible for ordering inventory also receives the inventory and enters it into your computer system, there's no one to verify whether the amount recorded matches what was ordered.

So if 12 cases are ordered and received but only 10 cases are entered into the inventory system, no one will notice that the other two cases ended up in your inventory person's trunk.

Police: Employee steals pain medication from veterinary hospital

A 45-year-old woman is accused of stealing pain medication while working for a local veterinary hospital, police say.

Jennifer Manning was charged with felony embezzlement on Sept. 22 after police say she stole at least 17 bottles of Tramadol from the Jolly Pond Veterinary Hospital, located at 3800 Longhill Road, James City County Police Department spokeswoman Stephanie Williams wrote in an email.

Manning is accused of stealing the medication while accepting deliveries from Feb. 2, 2015 to Sept. 2 as an employee of the veterinary hospital. Police believe she took one full bottle from some deliveries and only logged the remaining bottles, Williams wrote.

Police believe Manning stole about $385 worth of Tramadol. The Drug Enforcement Administration considers the medication a schedule four drug, meaning it has a low potential for abuse and dependence. Other schedule four drugs include Xanax and Valium.

Tramadol is used as a pain killer for moderate and severe pain, including surgical pain. It can become habit forming if used for a long time, according to the Mayo Clinic.

Manning’s case is scheduled to be heard in Williamsburg-James City County General District Court on Oct. 4.

Source:  http://wydaily.com

A dual control system requires the authorization or approval of two individuals to complete a transaction. 

One individual should not be responsible for an entire financial transaction from beginning to finish. 

The dual control system puts a second set of eyes on transactions, greatly lessening the risk of embezzlement.

Inventory Management:

One person orders.  A different person receives in the order.   All purchase orders should be forwarded/transmitted to bookkeeping.  

The Fraud Triangle

Incentive ... Opportunity ... Rationalize = The Fraud Triangle as a three legged stool  -------> Take away a leg!  Business owners must be proactive in preventing fraud/embezzlement! 

MINIMIZE OPPORTUNITY! Companies should always be looking to minimize the opportunity for fraud and unethical behavior. Kathryn C. Tiffany, LLC of Voorhees, New Jersey can assist with this. Working as a outside certified bookkeeper, Kathryn C. Tiffany, LLC can help companies analyze operations, review internal controls and address any current or future vulnerabilities. It is a worthwhile investment for any organization that wants to remain secure against the hazards of fraud.  Internal controls a must for businesses! 

$19K stolen from Mount Laurel medical office:  

MOUNT LAUREL – Two former employees stole thousands of dollars from a medical office by forging checks, authorities said.

The crimes against the Briggs Road office, which police did not identify, occurred over a period of at least five months starting in March. The owner discovered the thefts last month, police said.

One of the suspects, 29-year-old Andrea D. Lecklikner of Turnersville, was arrested Thursday on charges of theft by deception and conspiracy. Police said she forged checks totaling $4,959 in New Jersey and Pennsylvania.

A second suspect, 29-year-old Brittany Mulholland of Sewell, remains at large, police said Friday. She forged checks totaling $14,412, according to police, who obtained warrants charging her with computer criminal activity, theft by deception and conspiracy.

Original article can be found here:   http://www.courierpostonline.com

UNDERSTANDING THE FRAUD TRIANGLE

The three factors that make up the fraud triangle are:

Pressure. Most individuals require some form of pressure to commit a criminal act. This pressure does not need to necessarily make sense to outside observers, but it does need to be present. Pressures can include money problems, gambling debts, alcohol or drug addiction, overwhelming medical bills. Greed can also become a pressure, but it usually needs to be associated with injustice. “The company has not been paying me what I am really worth,” for instance.

Opportunity. An opportunity to commit the act must be present. In the case of fraud, usually a temporary situation arises where there is a chance to commit the act without a high chance of being caught. Companies that are not actively working to prevent fraud can present repeated opportunities to individuals who meet all three criteria of the fraud triangle.

Rationalization. The mindset of a person about to commit an unethical act is one of rationalization. The individual manages to justify what he or she is about to do. Some may think they are just going to borrow the stolen goods, or that they need the money more than the “big” company they are stealing from.

POLICE BLOTTER:

THEFT/ARREST: In August 2016 the owner of a medical office on Briggs Road reported that two former employees had been stealing money from the business over a period of time. 

The investigation revealed that between March 2016 and August 2016 employee Andrea D. Lecklikner, age 29, of Turnersville, NJ cashed forged checks at various locations in New Jersey and Pennsylvania totaling $4,959.00.

A warrant for her arrest was obtained charging her with theft by deception and conspiracy to commit theft by deception. 

On September 22nd she turned herself into police.

She was released pending a court hearing after posting 10% of $25,000.00 bail.

The investigation also revealed that a second employee, Brittany Mulholland, age 29, of Sewell, NJ cashed forged checks at various locations in New Jersey and Pennsylvania totaling $14,412.00. 

Mulholland also accessed the computerized payment system of the business and stole an additional $8,985.27. 

Warrants were obtained charging Mulholland with computer criminal activity, theft by deception, and conspiracy to commit theft by deception.

Mulholland remains at large.

- Mount Laurel Police Department

Conducting Internal Investigations

It seems that employees love to complain about anything, and it seems impossible to investigate everything. When employees feel, however, that you are not taking their complaints seriously enough or that you are ignoring them, they will find external sources for their complaints. These external sources range anywhere from the EEOC, the NLRB, Wage and Hour, private attorneys, and juries!! And juries love to punish you when they feel that you ignored an employee's legitimate complaint.

But what are legitimate complaints?
We all know that an employer has a legal responsibility to investigate some complaints but not others. Can you make the distinction?

How you handle internal complaints can make all the difference of whether an employee goes externally with their complaints. It can make all the difference in whether the government or jury will find that you took immediate action and took prompt remedial action for legitimate complaints.

Forensic accounting and bookkeeping – a means to end fraud & an excellent career choice

Catching thieves ingenious enough to stealing millions of cash from companies, or bringing down the notorious mob bosses in history. These endeavors do not require anymore a superhero with powers, but can be taken care by a mild-mannered accountant in the swiftly rising field of forensic accounting and bookkeeping.

Forensic accounting is one of the most rewarding and exciting career choice available. Even though, most people perhaps not know precisely what being a forensic accountant entails.

Understanding Forensic Accounting

The forensic accounting makes use of accounting skills to investigate embezzlement or frauds and to analyze the financial information, which further use in legal proceedings. It is a specialty practice area that explains engagements fall-outs from anticipated or actual litigation or disputes.

The forensic accounting centers around two main zones – investigation and litigation support.

- The litigation support entails the figuring out the amount lost by parties in a legal contest, and also appear as an expert witness in trials to testify.

- The investigative job role requires the combination of both skills, detective, and accountant. An accountant who has a thorough knowledge of financial measures and capability to think deductively is an ideal fit for this role. The key task of a forensic accountant on investigation part is to identify employee securities fraud, theft, and insurance fraud or identity theft, etc.

Who hires forensic accountants, or/and auditors?

The variety of institutions employs forensic accountants including, police forces, government agencies, insurance firms, financial lenders, courts, attorney and law firms, banks, business owners and credit unions, etc.

Typically, they employ forensic accountants based on their qualification and experience. Even, in some instances, they hire them based on their neutrality to the particular situation, if damages are involved.

Job description of forensic accountant

A forensic accountant can be involved in the broad array of investigations. They may comprise:

1. Partnership's and shareholder disputes

Such conflicts require a detailed analysis of several years of accounting records to reach a collective dispute resolution, including – benefit and compensation disputes of partners and shareholders.

2. Business interruption

Such investigation entails reviewing particulars of insurance policy. Business interruption research is primarily focused on enquiring employee dishonesty, property losses claims and other coverage issues. Also, forensic investigation defines appropriate methods of calculating losses in such areas.

3. Matrimonial disputes

In such disputes, forensic accountants evaluate assets like properties, businesses, and other personal assets.

4. Mediation and Arbitration

Situation where forensic accountants are involved in an alternate dispute resolution so that companies and individuals reach to a joint resolution with a nominal amount of time and with a minimal disruption.

5. Criminal investigations

In criminal investigations, the job of a forensic bookkeeper is to represent the evidence in the form of a concrete, concise and professional report.

6. Personal Injury claims

Forensic auditors are asked to enumerate economic damages and often calculate resulting financial losses resulting from accidents, wrongful dismissal, and medical malpractices.

7. Fraud investigation
Such study requires forensic accountants to trace funds, asset identification, and recovery. Commonly, performed in employee fraud cases.

8. Professional negligence

The forensic bookkeeper will investigate through a loss quantification, or breach in an agreement.

Forensic accountant's workflow

Each forensic auditor or accountant is assigned with the unique assignment with each client, but every accountant follow the same structure.

- Conduct initial meeting with client to understand the significant people, facts and issues on hand

- An efficient conflict check is performed

- Preliminary investigation is completed

- Build an action plan containing – objectives to be
achieved and methods to be used to accomplish them.

- Acquire relevant proof of occurrence of an event, or other evidence including, assets, economic information, and documents, etc.

- Preparing a final report

Qualification of Forensic accountant

The licensed forensic accountant must have minimum bachelor's or preferably master's degree in accounting or related field. Besides relevant education and licensing a forensic accountant also must have following personal characteristics –

-Confidence
-Strong communication and organizational skills
-Creativity
-Persistence
-Capability to make sound personal judgments.

Source: http://www.selfgrowth.com

Woman ordered to pay $170K-plus for embezzlement

An Oklahoma City woman who pleaded no contest for embezzlement was ordered Monday to pay more than $170,000 in restitution and serve a split sentence of two years in prison, eight years out.

District Judge Thad Balkman also ordered the woman remain on supervised probation for one year following her imprisonment.

Rebecca Lorene Ray, 43, was originally charged with embezzlement in January 2012 after owners of Millennium Roofing found out she was making unauthorized purchases with a company credit card.

A liquor store, a casino, a boat marina and convenient stores were some of the locations the owners discovered Ray had swiped the company card, court records show. She used the card after she was no longer employed there, telling law enforcement those purchases were treated as advances for supplement, or commission checks, as part of her job.

An affidavit filed with the 2012 charge shows Ray made unauthorized purchases with the company card totaling to approximately $26,000.

The owners later found out Ray also had forged the owners’ names on business checks and would either change the payee names or delete checks in their Quickbooks program to avoid detection, the affidavit shows.

The unauthorized payments made to herself and others through the company checks came to a total of approximately $60,000 according to the affidavit. Testimony on Monday indicated that Ray stole more than $100,000 from the company while she worked there as an office manager.

Felony information filed states the embezzlement occurred between December 2009 and June 2011.

Ray’s testimony Monday was that she was not trained properly to handle certain duties, such as bookkeeping, but was assigned the task after the two owners fired one of their partners. She testified that she changed the payee names on checks and deleted checks in QuickBooks at the request of the owners to reduce the amount of taxable income.

The affidavit states Ray admitted to signing the owners’ names on checks but did it out of necessity when they were not in the office.

After Ray testified that she had tons of employers say she was a good employee, Assistant District Attorney Zack Simmons questioned her about numerous jobs in which employers had accused her of theft, which often led to her either quitting or being fired.

According to her testimony, all of those employers were lying.

Ray has no prior criminal history, but because she had engaged in an alleged continuous pattern of this behavior, Balkman said there was a moderate risk that she would reoffend. Evidence also showed that Ray had a “lack of remorse” and instead of taking responsibility for her actions, she pointed a finger at others.

“This is a person that over the past several years has victimized businesses, and ultimately customers, as the judge said, and for the most part has gotten away with it over the past several years,” Simmons said. “The owners of Millennium Roofing decided to take a stand against her and follow through with this case to make sure she was held accountable.”

Simmons said he hopes Ray learned something from the case and the victims are somehow made whole again.

Assistant District Attorney Dane Towery also was a prosecutor for the case. Attorney Steve Parker represented Ray. 

Original article can be found here:  http://www.normantranscript.com

To stop fraud encourage whistleblowing

The average business loss due to fraud is estimated at 5% of gross revenue.  What can you do about it?

According to the Association of Certified Fraud Examiners, more than 40% of fraudulent acts are identified by employees.  This has led many firms to set up a system where employees can report fraud to a third party in the form of a hotline or administrator. 

The problem is that employees are often hesitant to report wrongdoing to external third parties. Here's how to overcome this reluctance. 

When your third-party administrator or hotline is established:

Make sure any third-party system, such as a hotline, is perceived by employees to be part of your company.

Stress that your firm prefers and supports this method of reporting.

If you use a hotline, do not call it a "hotline" because it implies something to be used only in emergencies.  Instead, use terms such as Open Line or Help Line.

Let employees report fraud anonymously to prevent fear of retaliation or being too involved with the wrongdoing.

• Periodically ask employees if they are aware of potential fraud; quarterly or annually is fine.
• Remind them that it is everyone's responsibility to report wrongdoing because losses due to fraud can cost jobs by threatening the firm's financial health.
• Institute policies for following up on reports of fraud to make absolutely sure that such reports are not ignored or brushed aside.

Dual control system: Why it's important to establish an internal control system to prevent embezzlement

Woman allegedly stole $30K from company
A former bookkeeper for an Oak Harbor property management company is accused of embezzling about $30,000 from the business, according to documents on file in Island County Superior Court.

Prosecutors charged Theresa M. Gonsalves, 54, of Oak Harbor, with first-degree theft Nov. 3 in Island County Superior Court.

The co-owner of the company contacted police earlier this year and reported his suspicion that Gonsalves embezzled money from the company, according to the officer’s report.

The man reported that he discovered a $1,500 discrepancy in the company’s accounting in March and approached Gonsalves about it; she allegedly admitted to taking the money because “she had fallen on hard times,” the report said.

The man said he told the bookkeeper that she should have come to him if she needed money.

“He had helped other employees who were in similar circumstances and they had come to an agreement on paying him back,” the officer said in his report.

Gonsalves became very emotional and started crying when the owner told her that she was fired.

The man became suspicious and realized that the situation might be worse than the missing $1,500, the report said.

The owner said he reviewed the business’ financial records and discovered alleged shortages totaling more than $30,000 from the period of March 2011 to March 2014, according to the officer’s report.

Story and Comments:  http://www.whidbeynewstimes.com
 
Dual control system requires the authorization or approval of two individuals to complete a transaction. It’s that simple. One individual should not be responsible for an entire financial transaction from beginning to finish. Many small companies fall into the trap of having one bookkeeper handle all accounts payable and accounts receivable and write, sign, and deliver the checks. The dual control system puts a second set of eyes on transactions, greatly lessening the risk of embezzlement.

Fake Yellow Page Scams Took Small Business Owners for Millions of Dollars

It doesn’t take a lot to fool a hurried small business owner. Case in point: The Federal Trade Commission just announced a series of legal actions against three Montreal operations accused of talking U.S. small business owners into paying millions of dollars for local yellow page listings the merchants neither bought nor received.
 
A common version of the scam went like this: The crooks called small businesses (some nonprofits, churches, and local government agencies also fell victim) and asked to confirm the shop’s name, address, and telephone number. Then the fraudsters call again to tell the business that they owed amounts as high as $1,800. When the business owners protested, the crooks played back recordings of the earlier phone calls, doctoring recordings to make it sound like the merchant had agreed to pay.

It sounds crude, but plenty of business owners coughed up the cash. One group of scammers tricked thousands of victims out of at least $4.9 million, according to a complaint filed by the FTC in U.S. District Court in Florida.
 
Directory listing scams aren’t new. In 2012, an Illinois court ordered a group of companies operating out of Palma de Mallorca, Spain, to repay $10 million to small businesses shaken down for payments for listings the merchants never agreed to buy. In that version of the scheme, crooks sent faxes bearing the “walking fingers” logo associated with local yellow pages. Merchants who returned the faxes were billed for $1,000 and threatened with aggressive collection tactics.

By trading fax machines for tape recorders and audio editing, the scammers may have climbed up a rung on the ladder of low-tech schemers who prey on Main Street. They’re not as sophisticated as the tin-foil bandits who clamber on the rooftops of convenience stores with rolls of aluminum wrap in an elaborate ploy to buy cigarettes with stolen credit cards. But they’re way ahead of the crude criminals who simply call small business owners and ask for cash.

http://www.businessweek.com

Bookkeeper Stole $830K from Veterans Organization: Police

The bookkeeper of a national veterans organization is accused of stealing more than $800,000 from the organization and using company credit cards for her personal airfare, vacations, and Internet purchases.

Cynthia Tanner appeared in court on Monday, where bond was set at $500,000.

In late May, the president of the National Veteran Services Fund called Darien police to report embezzlement after an accounting firm discovered irregularities in the company’s financial statements, police said.

The National Veteran Services Fund released a statement saying they worked with their CPAs after the audit revealed issues, contacted an attorney and met with Darien Police.

"The matter is in the hands of the authorities for action and therefore we have no further comment at this time," and e-mailed statement from Phil Kraft, executive director of the fund, says.

Investigators said Tanner is accused of embezzling more than $830,000 from the organization’s checking account alone over a five-year span.

The charges, however, are just for what she is accused of embezzling in 2013. Police said Tanner is accused of writing 135 unauthorized checks in 2013 for more $185,000, made payable to herself and her family members.

Tanner had worked for the National Veteran Services Fund since 2008 and was responsible for payroll and disbursing funds to the charity’s clients, according to police.

The fund, based in Darien, accepts donations to help veterans and their families across the country and used the money to pay for wheelchairs, scooters and ramps for veterans.

They have also paid utility bills for veterans and their families in danger of homelessness, as well as provided temporary housing.

The fund has also provided veterans with snow tires, dentures and a veterinary bill for a veteran’s companion animal.

Police said Tanner is accused of writing checks from the fund to pay herself money she was not entitled to, as well as checks to relatives.

However, she fabricated the financial ledger to indicate the checks were written to veterans or clients of the fund, police said.

Tanner turned herself in to police on Monday.  She has been charged with first-degree larceny. She  was being held on a $250,000 court-set bond, but that amount was doubled. She is due in court on June 30.

Her attorney did not comment on the allegations and said he needs more time to speak with his client.

Tanner was arraigned in Stamford Superior Court on Monday and is due back in court on June 30.

Police said more arrests are expected.

Darien Police 

 Cynthia Tanner, a bookkeeper for National Veteran Services Fund, is accused of embezzling more than $830,000 from the Darien organization that helps veterans.

Fraud funded breast enhancement and shopping sprees

A PPI claim company admin manager illegally pocketed more than £90,000 of compensation and used it to fund a breast enhancement a car and shopping sprees, a court has heard.

The actions of Louise Hitchen, 27, had wider implications for her company and colleagues, some of whom lost their jobs because of the cost to the firm.

At Liverpool Crown Court today, she was sentenced to 12 months in prison after admitting two counts of fraud by abuse of position of trust.

Hitchen, of School Street, Newton-Le-Willows, was employed by Hardwick Financial Solutions LTD - a company that deal with Payment Protection Insurance (PPI) claims and settlements to clients - in 2011 as an admin manager.

The company is based in Goose Green, Wigan.

Following poor performance, Hitchen left the office on October 19, 2012, and did not return for her next shift. She later resigned.

In December 2012, Hitchen's former line manager was contacted by a customer who was querying where her compensation was.

An investigation was launched and it was established that the client's money had been paid into Hitchen's account, rather than the account of Hardwick Financial Solutions LTD.

Some funds were returned by Hitchen, including a Vauxhall Astra convertible that she had bought.

The firm also discovered electronic and paper records of transactions had been deleted so they had no way of establishing whether any other funds had been stolen.

A further client then contacted the firm in March 2013, who was claimed to be owed cash.

Police were called and an investigation was launched.

Hitchen's bank accounts were checked and 15 transfers were identified that had come from two companies who settle claims with Hardwick Financial Solutions LTD.

The total payments into Louise Hitchen's bank account was £93,250.56, £23,849.98 of which has been repaid by her.

The money was used to pay for a breast enhancement, a car and numerous transactions were made at food and retail outlets.

Detective Constable Mark Edwards, from Greater Manchester Police’s Volume Fraud Team, said: “In the space of about four months Louise Hitchen stole close to £100,000.

“With the exception of the cosmetic surgery and car - which has since been returned - Hitchen frittered away much of the cash on shopping sprees and trips out.

“The cost to Hardwick Financial Solutions LTD has been significant and has included staff losing their jobs but the only person Louise thought about while she had her 'hand in the till' was herself."  

http://www.sthelensstar.co.uk

On Your Side Alert: Debit card fraud protection

NBC12.com - Richmond, VA News RICHMOND, VA (WWBT) - Your smart phone is probably the most popular thing you carry every day. But there is a 12 On Your Side Alert about your debit card. Unlike a credit card, thieves can debit away "hundreds" of dollars of your money -- that you could end up responsible for. But a bill on Capitol Hill could change all that. 

If you are the victim of credit card fraud the most you would be responsible for is $50. The same is not true for your debit card. If crooks go an illegal shopping spree with it, that $50 liability expires if you don't notify the bank within two business days. If you wait longer, you could be on the hook for $500 or more.  

Senator Mark Warner wants to change that through the Consumer Debit Card Protection Act.

"More and more of our kids and people who have less credit history, are using debit cards rather than credit  cards," Warner said. 

No matter what card you use, consumer advocates say the key is to report fraud as quickly as possible. While Senator Warner says there is a disparity in consumer protection regulations between debit and credit cards, the banking community doesn't agree. Some experts say because most debit cards carry the MasterCard or Visa logo, the rules of protection are similar and no change is needed. 

Bruce Whitehurst with the VA Bankers Association weighed in on the proposal.

"I think the main message here is that consumers already really have the same kind of protections in place. There are some differences in the actual regulations but ultimately with so much rolling up to Via and MasterCard, you really have a similar situation with credit and debit cards," he said. 

Whitehurst, says instead of new regulations, there needs to a bigger push to go after criminals.

"We really want to see attention given to making sure there is a system of accountability in place, where those who perpetrate the fraud are held accountable for the cost," he said. 

Senator Warner agrees the banks can't do it all. He says consumers  also have to empower themselves.

"That means regularly changing your PIN number, not giving out your PIN numbers to folks who shouldn't have it and understanding in this new and involved cyber security world, we all have to help guard our own credit," Warner explained. 

Make sure you check your statement on a regular basis, never carry your PIN on you -- and the moment you notice anything suspicious, contact your card provider. Also, keep in mind, some banks may voluntarily waive all liability for fraud if it's determined you took reasonable steps to protect yourself.  

Something else to remember, the change may sound good, but if banks are forced to revise regulations, your bank fees may increase. 

Links:

http://www.consumer.ftc.gov/articles/0213-lost-or-stolen-credit-atm-and-debit-cards

http://www.warner.senate.gov/public/index.cfm/pressreleases?ContentRecord_id=e8b1de2d-c920-4eaf-a9f9-219a3e41df47

http://fdic.gov/consumers/consumer/news/cnfall09/debit_vs_credit.html 

New York woman accused of stealing thousands of dollars from a former employer; 36-year-old Lisa Taber accused of embezzling more than $48,000

SHAFTSBURGH, Vt. —A New York woman is accused of stealing thousands of dollars from a former employer, almost ruining the business, police said.

Police say Lisa Taber, 36, of Hooski Falls embezzled $48,155.27 from Latif Plumbing and Heating in Shaftsbury, to pay her property taxes and personal bills between January and April.

The missing money forced the small-business to layoff employees.

Taber's husband, Jeremy Taber, was also arrested for allegedly threatening the boss, Donald Latif for going to police.

Still more Crundwell assets to seize, return: Loans to fire chief, former city engineer unresolved

DIXON – The U.S. Marshals Service isn’t done trying to seize the remaining assets of former Dixon Comptroller Rita Crundwell.

In December, the city received a $9.2 million check from the sale of many of Crundwell’s assets – mainly 400 horses, her homes, and other large items.

Crundwell was arrested at City Hall in April 2012 for stealing nearly $54 million over 2 decades. In February 2013, she was sentenced to 19 years, 7 months in prison.

The Marshals Service and Jason Wojdylo, chief inspector of its asset forfeiture division, are working to seize 13 remaining assets and turn them over to the city.

Among those assets are personal loans Crundwell made to Fire Chief Tim Shipman and then-City Engineer Shawn Ortgiesen.

The amounts of those loans haven’t been released, and in April, Mayor Jim Burke told Sauk Valley Media’s editorial board that he wasn’t aware of the terms of the loans.

Wojdylo, who said he doesn’t know the terms of the loans, is working to obtain loan documents and take them under his control.

The other known remaining assets, already in cash form, according to Wojdylo, include Illinois Municipal Retirement Fund contributions, a retirement fund with Nationwide, $1,000 in inheritance, and scholarships and royalties of the American Quarter Horse Association.

Other assets, which would have to be appraised before being sold, according to Wojdylo, include a trophy collection; show clothing; personal effects such as household items; an old pickup truck currently in possession of a Crundwell family member; offspring of the horses she owned; and a stake in a family partnership.

Monetizing some of those assets, like offspring from Crundwell’s former horses and the personal effects, can be complicated and not yield a large return, but Wojdylo said he’ll explore every option and any new leads.

“I don’t want to spend a lot of money and make this worthless for me and the city,” he said. “And I also don’t want to leave assets on the table.”

The family trust is split five ways and controls 347 acres of farmland near Dixon. The Marshals Service has a 20 percent voting stake, equal to other family members, so it doesn’t have complete control over what happens.

There are options, Wojdylo said, which include selling the share in the partnership or selling 20 percent of the land.

http://www.saukvalley.com

Church employee arrested on embezzlement charge

WARREN A 58-year-old employee in the Niles Sewer Maintenance Department was arrested on the job Friday afternoon on a secret indictment charging him with embezzling $97,000 from a local church.

An indictment against Michael Marrara, of 215 Sayers Ave., accuses him of a fourth-degree felony charge of theft, punishable by up to 18 months in prison.

The indictment also spells out allegations of how Marrara used a Sam's Club credit card from Our Lady of Mount Carmel Church to make a variety of purchases between June 1, 2008, and Dec. 31, 2012.

Bookkeeper accused of keeping $400K in North Carolina taxes

RALEIGH, N.C. —North Carolina revenue officials say a bookkeeper at a Concord-based business has been arrested and accused of keeping more than $400,000 in state and county taxes for the company.

The News & Observer of Raleigh reported the woman also is accused of keeping more than $260,000 in income tax from employees' paychecks.

Sixty-one-year-old Barbara Butler of Harrisburg was arrested Wednesday and was charged with two counts of embezzlement of state property and one count of embezzlement by a public officer or trustee.

Butler was the secretary treasurer and bookkeeper for Butlerbuilt Motorsports Equipment, which sold customized seats and other gear for race cars. Warrants say the money was used for the company, not for Butler personally.

It was unclear if Butler has an attorney. 

 RALEIGH — The secretary/treasurer and bookkeeper of Butlerbuilt Motorsports Equipment, a Concord-based vendor of customized seats and other gear for race cars, was arrested Wednesday on charges that the company kept more than $400,000 in state and county sales tax and $261,000 in income tax from employees' paychecks from as far back as December 2003. 

Barbara Butler, named in three arrest warrants obtained by the state Department of Revenue, was listed in those as Barbara Beard Butler and on Wake County arrest records as Barbara Jean Butler.

Butler, 61, of 8263 Addison Drive in Harrisburg, was being held in the Wake County Detention Center in lieu of $1 million bail for a first court appearance Thursday in Wake County District Court.

Read more here: http://www.newsobserver.com

Don’t Lose Money Because of Sloppy Bookkeeping

Condos and HOAs
Living with Rules

by: Lisa Magill, Esq. February 19th, 2014 | 7:20 AM

About 2 ½ years ago I wrote about a case involving the Wellesley at Lake Clark Shores HOA which lost out on collecting close to $2,000 in interest and late fees and also lost out on collecting a whopping $10,000 in attorney’s fees due to bad recordkeeping.  The Court, in that case, said that the association’s accounting methods were “woefully inadequate” to collect money as a result of the Claim of Lien filed against the property.

Another case with a similar result was recently issued by the Fourth District Court of Appeal. In that case, Plaza 3000 had problems with a particular owner over the years.  Maintenance assessments were rarely, if ever, paid on time and they were always arguing what was actually due and owing.  The lot owners complained that Plaza didn’t credit checks on a timely basis and that resulted in improper interest charges against the account.  Meanwhile, the owners often marked checks with a restrictive endorsement (i.e. “paid in full”).

Plaza wound up recording a claim of lien and commencing foreclosure proceedings against the owners.  It claimed there was approximately $26,000 due on the account, some of which for interest charges.

The owners filed several counterclaims in response as well as raised many affirmative defenses.  One of the counterclaims was for Slander of Title.  Slander of Title occurs when someone falsely alleges an ownership interest in the property of another, or when someone disparages the property interest of another. The elements of slander of title claims are:

(1) Defendant communicated to a third person;

(2) A statement disparaging plaintiff’s title;

(3) The statement is untrue; and

(4) Defendant’s communication caused plaintiff to suffer actual damages.

The owners claimed that the claim of lien recorded in the public records and the lis pendens recorded as a result of the foreclosure slandered title to their property.  The trial court (lower court) dismissed this counterclaim because they found that the owner failed to allege actual damages (element #4).  The appellate court disagreed and found that if the lien prevented the owners from obtaining a conventional loan that meant they had to pay higher loan costs and higher interest.  The owners also claimed that they lost a contract to sell the property, couldn’t rent out the property and suffered from credit problems.  These were all special damages that supported the counterclaim.

The appellate court reversed an award for attorney’s fees for Plaza 3000, since the trial court didn’t make a finding that the counterclaim was “completely frivolous or entirely lacked merit”.

In the end the appellate court found that Plaza 3000 didn’t prove it was owed any portion of the $26,000 it included in the claim of lien and since Plaza refused to accept payments tendered by the owners (even with the restrictive endorsement) it couldn’t collect interest or attorney’s fees on any assessments that came due after the claim of lien was filed.

This case again shows the importance of crossing “t’s” and dotting “i’s” when it comes to accounting records and the obligation to accept payments on account, even if for less than the full amount due.

Story and comments/reaction:   http://blogs.sun-sentinel.com

Chiropractor faces IRS bribe charge

BOSTON -- A 55-year-old Lowell chiropractor was arrested Thursday on a charge of bribing an IRS auditor to ignore two improper deductions -- payoffs to two women he inappropriately touched during medical appointments -- on his 2011 income-tax form.

A probable-cause hearing is scheduled for March 5 in U.S. District Court, according to U.S. District Attorney Carmen Ortiz.

Stephen D. Jacobs, of Lowell, is charged with bribery of a public official. The complaint alleges Jacobs paid an auditor $5,000 in cash to ignore the deductions, which were in fact payments Jacobs made to two different women because he touched them inappropriately during medical treatments in 2011 and 2012.

Jacobs could not be reached for comment at his Lowell office, his cellphone or via email.

According to court documents, an IRS agent was assigned to examine Jacob's federal income-tax form for 2011. The agent reviewed a number of issues, including Jacob's student-loan expenses, business expenses, gross receipts, bank statements and other expenses.

Before their initial meeting, Jacobs allegedly called the agent to confirm the appointment. During the conversation, Jacobs inquired whether the agent had the authority to handle issues on his own.

During the Aug. 6 meeting at Jacobs' office at 16 Pine St., Lowell, several expenses were questioned. Jacobs allegedly admitted he made $5,000 in payments to two different women because he touched them inappropriately during medical-treatment sessions in 2011 and 2012, according to court documents.

When the agent disallowed the expenses, Jacobs allegedly became agitated and asked the agent, in essence, if there were anything he could do for him.

Jacobs allegedly asked, "... you are on the front line, can't we just deal with this...''

On Aug. 13, the agent made a recorded call to Jacobs, advising him they could deal with the $5,000 payments to the women at their next meeting.

During a Sept. 25 meeting, Jacobs was told the $5,000 in payments to the women were disallowed expenses. When the agent then requested other documentation for other personal and motor-vehicle expenses, Jacobs became upset, saying, "...do you want a bribe. Do you want me to pay you..."

The agent acknowledged he was willing to accept cash to terminate the examination. Jacobs allegedly offered the agent $5,000 to end the examination. They agreed to meet later that day to complete the transaction.

Later that day, at a meeting telectronically recorded by video and audio, Jacob allegedly paid the agent $5,000 in cash and the agent handed over a "no-change" audit letter.

Read more: http://www.lowellsun.com

Merrick Bookkeeper Pleads Guilty to Stealing More Than $450K From Her Employer

Merrick, NY - February 7th, 2014 - Nassau County District Attorney Kathleen Rice announced that a Merrick woman has pleaded guilty today to stealing more than $450,000 from the real estate firm where she worked as a bookkeeper by forging her boss’s signature on checks made out to herself and by arranging automatic payments from company accounts to pay personal bills.

Joanne Rocca, 68, of Merrick, pleaded guilty today to Grand Larceny in the 2nd Degree (a C felony) before Nassau County Court Judge Christopher Quinn. Prosecutors are requesting a sentence of 1-1/3 to 4 years in prison and restitution of $164,432.88. Prior to the filing of charges, Rocca made restitution in the amount of $292,000. Rocca is due back in court on June 6 for sentencing.

“Employees that steal this much money damage the trust placed by employers in their employees and put the fiscal health of companies and the jobs of fellow employees at risk,” DA Rice said.

DA Rice said that between July 2004 and April 2011, Rocca used her position as the bookkeeper for a Plainview-based building maintenance and real estate firm to embezzle more than $456,000 from her employer by arranging automatic payments from the company’s accounts to pay personal bills and forging the owner’s signature on company checks. She used the stolen cash by pay her cable television, gasoline, grocery, and utility bills, and to purchase home furnishings.

The theft was discovered in May 2011 when her employer discovered a company check made out to Rocca’s American Express account on her desk while she was at lunch. Though Rocca denied using company money to pay her own bills, an internal review of the company’s checkbook, bank statements, and accounts revealed the extent of Rocca’s theft. DA investigators made the arrest on May 8, 2013.

Assistant District Attorney Peter J. Mancuso of DA Rice’s Government & Consumer Frauds Bureau is prosecuting the case. Rocca is represented by Anthony La Pinta, Esq.

http://www.longisland.com 

Been stolen from? Want to talk about better bookkeeping procedures? Feel free to drop me an email.

Bookkeeper accused of fraudulent check writing

 

FARMINGTON (KRQE) – A Farmington woman who works as a bookkeeper for two small businesses is accused of stealing from them. Mary Hawkins, 65, is being held on 40 felony fraud and forgery counts. San Juan County sheriff’s officials say she wrote more than 220 fraudulent checks and embezzled more than $344,000 from the businesses over a two-and-a-half-year span starting in 2011. A CPA for one of the businesses noticed several checks weren’t authorized by the owner and had been written out to Hawkins. 

Stats on financial abuse of elderly

Elder financial abuse 

Researchers analyzed media reports from April through June 2010, and pinpointed 314 unduplicated reports of elder financial abuse that included detailed information: