Monday, August 30, 2010

What Fuels Fraud? Classic Reasons Underlie Most Embezzlement Cases

The South Bend Tribune published a nice article by Dave Stephens about the factors that contribute to employee theft cases called What Fuels Fraud? Classic Reasons Underlie Most Embezzlement Cases. In the article, Stephens quotes Sgt. Dominic Zultanski, lead financial investigator for the South Bend Police Department. The primary factors: Pressure; Opportunity and Rationalization, making up the Fraud Triangle are discussed. Volunteer organizations are at risk due to the nature of the entity and general lack of controls.

Read the whole story here.

Friday, August 27, 2010

Pennsylvania Municipal Manager Charged With Embezzling $178K

Ella B. Jones, 58, of Turtle Creek, Pennsylvania has been charged with embezzling more than $178,000 from borough of Braddock, Pennsylvania, where she had served as municipal manager. Authorities charged Jones earlier this week with three counts of forgery and three counts of theft by unlawful taking for allegedly writing some 153 checks to herself over a two year period. She had served as municipal manager for the past 10 years. According to published reports, Jones appears to have spent some of the stolen monies at local area casinos. Jones, who has been suspended from her position, has plead not guilty to the charges.

Read the story here, here and here.

Montana Woman Pleads Guilty To Embezzling $133K From Tax Preparation Firm H&R Block

Melissa Lynn Sever, 35, of Butte, Montana, pleaded guilty to charges she embezzled $133,000 from a local H&R Block office where she had been employed as a bookkeeper. Authorities alleged that Sever made unauthorized payments to herself, reported hours that she did not work, wrote herself unauthorized checks from the company bank account and pocketed cash payments made to the company before making bank deposits. She plead guilty to wire fraud and tax evasion charges, admitting that she had failed to pay income tax on the ill-gotten gains in her 2008 tax returns. Sever's scheme reportedly spanned about a year, from February 2008 until March 2009.

Read the story here, here and here.

Maryland Woman Sentenced To 15 Years For $900K Embezzlement Scheme

Stephanie Ann Joseph, 50, of Fruitland, Maryland, has been sentenced to 15 years in prison for embezzling $884,277.08 from Thomas H. Ruark Inc., a local development firm where she had been employed as a bookkeeper for nearly 2 decades. Authorities alleged that Joseph would keep cash collected from clients and use a check from another account to conceal any monies stolen. She also allegedly changed the amount of deposits in computer records. Joseph plead guilty to felony theft charges. Auditors believe Joseph's scheme spanned more than 6 years, from January 2003 until May 2009.

Read the story here.

Former Washington State Billing Clerk Sentenced For Embezzling $263K From Shipping Concern

Virginia Lee Uy Stanton, 47, of Graham, Washington, was sentenced to 17 months in prison for embezzling $263,599 from Maersk Inc., where she had been employed as a billing clerk. According to authorities, Stanton stole the money to feed her gambling and methamphetamine addictions. Prosecutors alleged that Stanton submitted 116 fraudulent check requests over a three year period, from 2006 until June 2009 when she was fired. Her co-workers suffered loss of bonuses and pay raises as a result, according to reports.

Read the story here and here.

Illinois Lobbying Firm Reports $370K Embezzlement

An unnamed former secretary of Don Moss & Associates, a well known Springfield, Illinois lobbying firm, is suspected of embezzling as much as $370,000. The secretary has not been identified since there has not been an arrest made yet. According to authorities, the unnamed secretary forged checks for phony bonuses and pay, misused company credit cards for personal expenses and fraudulent expense reimbursements, over a period of 12 years.

Read the story here.


Former Illinois Youth Football League Treasurer Charged With Embezzling $112K

Theresa A. Carlquist, 51, of Downers Grove, Illinois, has been charged with embezzling some $112,000 from the Downers Grove Panther Junior Football league where she had served as treasurer. According to authorities, Carlquist wrote herself checks for as much as $8,500 over nearly a two year period, from February 2008 until December 2009.

Needless to say, the community is shocked...

Read the story here, here and here.

Thursday, August 26, 2010

Former Louisiana Non-Profit Bookkeeper Pleads Guilty To Embezzling $1 Million

Abigail John, 39, of New Orleans, Louisiana, has plead guilty to charges she embezzled more than $1 million from Louisiana Veterans Research & Education Corporation, (LVREC), a non-profit agency with a US Army contract where she had been employed as a bookkeeper. According to authorities, John embezzled the funds by depositing fraudulent company checks into her personal accounts, cashing fraudulent checks, and by diverting fraudulent company checks to her mortgage company. John was indicted this past June on 11 felony counts, including federal program fraud, embezzlement of federal program funds, wire and mail fraud, and money laundering. According to the indictment, John's scheme spanned at least 3 years from 2003 until 2006.

Read the story here and here.

Read the DOJ announcement of John's indictment here.

Read the indictment here.

Former Indiana Crime Stoppers Treasurer Charged With Embezzling $100+K

George Timlin, 67, of South Bend, Indiana, was charged with embezzling at least $100,000 from the local Crime Stoppers program where he had been employed as treasurer. Authorities believe Timlin could have been stealing from the program for as long as 16 years, but he is charged for only a five year period, due to the statue of limitations. He had served as Board Treasurer for more than 20 years. According to investigators, Timlin used his position to write checks to himself or for his own personal benefit.

Read the story here and here.

Wednesday, August 25, 2010

Rhode Island Woman Charged With Embezzling Nearly $300K

Linda Munroe, 55, of Cranston, Rhode Island, has been charged with embezzling $294,126 from Cameron's Pharmacy, where she had been employed as a liquor counter cashier. Authorities believe Munroe stole cash over an 18 months period, between July 2006 and December 2007. Munroe is also alleged to have played Keno with the pharmacy's lottery account while on duty and pocketed the winning tickets for herself to the tune of nearly $21,000.

Read the story here and here.

Wednesday, August 18, 2010

Virginia Man Sentenced In $265K Embezzlement Case

Steven S. Chasmar, 31, of Virginia Beach, was sentenced today to 56 months in prison for embezzling more than $265,000 from Caliper, Incorporated, a local personnel staffing company where he had been employed as a bookkeeper. According to prosecutors, Chasmar used his position to make 216 unauthorized direct deposits from company accounts into his own bank accounts, as well as caused 119 unauthorized payroll checks issued to himself. The scheme reportedly began in February 2007 and continued until 2010. The total amount Chasmar embezzled was $265,613.36, according to authorities. He plead guilty last April.

Read the story here and here.

Wife Of Late Virginia Fire Chief Pleads No Contest To Embezzling $250K

Deborah Lynne Shifflett, 39, of Hardy, Virginia, pleaded no contest to 10 counts of embezzlement for misappropriating at least $250,000 from the Hardy Volunteer Fire Co. where her husband, the late Jeffrey Lee Shifflett, 51 had served as its long-time fire chief. According to authorities, Jeffrey Shifflett, pictured here, committed suicide last year the day after he was indicted on 13 counts of embezzlement from the fire department. He had served there for 22 years. Their son, Cory Mitchell Shifflett, 24, was also indicted on 7 embezzlement charges and he pleaded guilty last November. Deborah Shifflett must give up several vehicles purchased with the misappropriated funds as well as pay back the department for unauthorized credit card charges. The misappropriations, which involved unauthorized checks, fuel charge cards and credit cards, spanned at least two years.

Read the story here, here, here, here and here.

Former Washington State Bookkeeper Charged With Embezzling $200K

An unnamed 42-year old woman from Gold Bar, Washington, was arrested yesterday on charges she embezzled $200,000 from an unnamed local building company where she had been employed as a bookkeeper. Snohomish authorities charged the woman with Theft in the First Degree. She reportedly admitted to the embezzlement upon confrontation by her employer. Details on the case have not yet been released.

Read the story here and here.


Tuesday, August 17, 2010

Blagojevich Guilty On 1 Count; All Other Counts Deadlocked; Case To Be Retried

Former Illinois Governor, Rod R. Blagojevich, 53, (Democrat-Illinois), was found guilty on just one of the 24 fraud and corruption counts he was tried for. The federal jury found Blagojevich guilty on the charge of lying to federal agents. On this count he will face up to 5 years in prison. The jury was deadlocked on the 23 other counts and U.S. District Court Judge James Zagel declared a mistrial on those charges. Assistant U.S. Attorney Reid Schar declared that the government would re-try the case. He had been charged for, among other things, using his office to attempt to "sell" the U.S. Senate seat vacated by now-president Barack Obama.

Read the story here, here and here.
Read FraudTalk's earlier post on this story here, here and here.

Update: Former Virginia CFO Pleads Guilty In $389K Embezzlement Case

Judy Hall, 59, of Abingdon, Virginia, has pleaded guilty to embezzling some $389,000 from Tug River Health Care Association, a non-profit health care services provider where she had been employed as chief financial officer. According to prosecutors, Hall used her position to issue at least 66 checks to herself over a period of about a year and a half. She is also alleged to have forged the signatures of two executives at the non-profit. Authorities believe that Hall erased records of the phony checks then intercepted checking account statements from Tug River’s bank, altered them by replacing the phony checks with copies of legitimate checks, and then photocopied the altered record so it would not be detected. Hall faces up to 10 years in prison, plus a fine of up to $250,000 and restitution upon sentencing, which is scheduled for December 14, 2010. Hall was originally charged this past June.

Read FraudTalk's original post on this story here.

Read the story here and here.

Former Texas Paralegal & Husband Charged In $1 Million Law Firm Embezzlement

Rosanne Stogner, 57, and Michael Stogner, 58, both of El Paso, Texas, have been indicted on charges they embezzled more than $1 million from the law firm of Oaxaca, Bernal & Associates, where Rosanne had been employed as a paralegal and office manager. Authorities alleged that Rosanne, left, used her position to issue checks from the law firm to herself, her husband, her husband's fence company and her daughter. The total alleged to have been embezzled is $1,002,050.47, according to a police affidavit. Stogner's scheme spanned more than a six year period, from March 2001 until May 2007. A trial is scheduled for next January.

Read the story here.

Sunday, August 15, 2010

Michigan Bank Teller Charged With Embezzling $150K

Sylvia Anita Wallace, 45, of Onsted, Michigan, has been charged with embezzling more than $150,000 from OSB Community Bank, where she had been a longtime bank teller. Authorities believe Wallace, who was in charge of the bank vault as well as served as a teller, misappropriated "between $150,000 and $200,000" from the bank. She has been charged with embezzlement of more than $100,000, a felony. Wallace faces up to 30 years in prison if convicted, plus restitution and fines.

Read the story here.

Update (8/20/11): Wallace, now 46, pleaded guilty to embezzling as much as $182,000, the amount the bank's forensic audit showed she took.  The thefts reportedly began on December 1, 2009 and continued through June 2010. 

Friday, August 13, 2010

Texas Couple Indicted On Charges Of Embezzling More Than $220K From Non-Profit Health Care Program

Melanie Newman, 25, and Michael Anthony "Tony" Goodloe, Jr., 29, of Carrollton, Texas, have been indicted on charges they embezzled some $220,000 from the Medical Center of Louisiana Foundation in New Orleans where Newman had been employed as a bookkeeper. Prosecutors allege that Newman used her position to write unauthorized checks to pay for personal expenses, including automobiles, student loans and the couple's wedding in May 2009. It is believed that the thefts occurred over a two year period from 2007 until 2009. They have been indicted on 34 felony counts including conspiracy, health care fraud and uttering forged securities. On her LinkedIn page, Newman lists her current position as "Accounting" at Zion Oil & Gas, Inc. in the Dallas/Fort Worth area.

Read the story here and here.

I hope the good folks at Zion Oil & Gas know about this and check their own books...

Former Pennsylvania Paralegal Sentenced For Embezzling $100+K From Law Firm; Has Prior History Of Embezzlement

Kathy Foer-Morse, 50, of Spring City, Pennsylvania, has been sentenced to 21-84 months in prison for embezzling more than $100,000 from High Swartz, LLP, a local law firm where she had been employed as a paralegal. Prosecutors alleged that Foer-Morse wrote herself 12 unauthorized checks totalling $100,937.32 between 2008 and 2009. At the time of her arrest in May 2009, Foer-Morse was on bail pending sentencing for embezzling some $285,000 from the law firm of Satterlee Stephens Burke & Burke LLP in New York City. She reportedly was also convicted of stealing money from her child's school in New Jersey.

Read the story here, here and here.

Read the D.A.'s announcement of her arrest here.

Montana Woman Pleads Guilty To Embezzling "Hundreds of Thousands" From School

Cynthia Jane Rasmussen, 55, of Kalispell, Montana, has pleaded guilty to charges she embezzled "hundreds of thousands" from the Montana Academy in Marion, where she had been employed as a bookkeeper. According to authorities, over a four year period from 2004 through February 2008, Rasmussen issued herself extra paychecks, gave herself unauthorized raises, and made unauthorized credit card purchases for her own benefit. She is scheduled to be sentenced in November.

Read the story here.

Update (11/18/10): Rasmussen was sentenced to 21 months in prison, plus three years of probation and ordered to pay $160,218.74 in restitution. Read the updated story here.

North Carolina Couple Charged With Embezzling $360K From Church

Alan Eugene Roland, 55, and his wife, Linda Guffie Roland, 55, both of Mount Holly, North Carolina, have been charged with embezzling more than $360,000 from the Way of the Cross Baptist Church where they had served as Treasurer and Assistant Treasurer, respectively. According to prosecutors, the Rolands use their positions to write more than 800 checks to themselves totaling $366,156 over a three-year period between 2007 and 2010. The Rolands own a local landscaping business, Let’s Go Outside.

Read the story here, here, here and here.

Update (7/19/11): In a plea agreement, Alan and Linda Roland each pleaded guilty to 4 counts of embezzlement and were sentenced to 24 to 32 months in prison.  Read an update of the story here.

Thursday, August 12, 2010

Former Virginia Church Bookkeeper Charged In $300K Embezzlement Scheme

Michele Moeser Roberts, 61, of Virginia Beach, Virginia, has been charged with embezzling nearly $300,000 from King's Grant Baptist Church, where she had been employed as financial administrator. According to prosecutors, Roberts misappropriated $287,678 from church coffers over a six year period beginning in October 2004. The scheme was not uncovered until the church's new financial administrator took over the job recently, following Roberts' apparent "retirement."

Read the story here and here.

Watch the video here.

Update (4/20/11): Roberts, now 62, was sentenced to 20 years in prison with 16 years suspended for a four year term. She plead guilty last December to felony embezzlement.

Monday, August 9, 2010

Michigan Municipal Employee Sentenced For Embezzling $174K From Township

Tommie McCarthy, 38, of Alpha, Michigan, was sentenced to one year and a day to fifteen years in prison for embezzling $174,000 from the Village of Alpha, for whom he had been employed as town clerk. According to authorities, McCarthy's scheme spanned nearly two years, from April 2007 until March 2009. According to his attorney, McCarthy used the stolen funds to buy items such as groceries, movies, toys, and Wal Mart gift cards for himself and children he coached on local sport teams.

Read the story here and here.

Former Florida Pops Exec Charged In $200K Embezzlement Scheme

Robert Ira Aronson, 63, of Boynton Beach, Florida has been charged with embezzling some $200,000 from Lappin Communications-Florida, owned by Bob Lappin, the controversial conductor of the Palm Beach Pops, for whom he had been employed as director of business and finance. According to authorities, Aronson transferred funds at least 69 times from Lappin's company to his personal accounts. The scheme spanned nearly two years, from January 2, 2008 through December 21, 2009, totaling $191,650 in misappropriated funds. Aronson also gave himself extra pay and unauthorized raises. He has been charged with grand theft, a felony.

Read the story here and here.

Former Michigan Bookkeeper Charged With Embezzling More Than $1 Million

Pamela Rene Heavner, 53, of Fenton, Michigan has been charged with embezzling more than $1 million from WPM Construction, where she had been employed as a payroll clerk. According to prosecutors, Heavner siphoned funds from the company over a five year period beginning 2005 through a sophisticated payroll scheme. Heavner was arraigned last week on a 39-count warrant, including 10 counts of embezzlement, 12 counts of uttering and publishing, 11 counts of larceny, 5 counts of fraudulent use of a computer and one count of conducting a criminal enterprise. Heavner had been employed by WPM for some 20 years.

Read the story here, here and here.
Update (9/27/10): Heavner pleaded guilty in a plea agreement to 7 felony counts, including four counts of embezzlement of at least $20,000, two counts of using a computer to commit fraudulent access and one count of uttering and publishing. She is due to be sentenced on October 4th.
Update (12/28/10): Heavner was sentenced to 23 months to 14 years in prison. She must also pay $610,200 in restitution.

Sunday, August 8, 2010

Connecticut Bank Exec Pleads Guilty To $1 Million Embezzlement Scheme

Robert A. Nixon, 48, of East Haven, Connecticut, plead guilty Friday to one count of theft, embezzlement, or misapplication by a bank officer or employee, and one count of income tax evasion in connection with the misappropriation of more than $1 million from Castle Bank and Trust of Middletown, now Naugatuck Savings Bank, where he had been employed as a vice president. According to prosecutors, over a period of as long as 8 years, Nixon caused fund transfers from the bank's general account to a friend's account and then either withdrew funds directly or had his friend give him some of the funds. The total amount Nixon misappropriated, according to authorities, was $1,039,227.34. Sentencing is scheduled for October 25, 2010, when he faces up to 35 years in prison, plus fines and restitution.

Read the story here and here.

Update (10/26/10): Nixon was sentenced to 55 months in prison for embezzling $1,039,227.34 from Castle Bank and Trust where he had served as vice president of operations.

New York-Based Burger King Franchise Owner Accused Of Embezzling $263K From Employee Retirement Fund

Steven M. Zavidow, 51, of Hillsdale, New Jersey, has been charged with embezzling some $263,000 from the retirement fund of his employees at the 11 Burger King restaurants he owns. According to prosecutors, during 2006, Zavidow wrote checks from the retirement fund account to himself and deposited them into his wife's and mother's accounts or cashed them. Zavidow faces up to 5 years in prison for each of the felony embezzlement counts he has been charged with, if convicted. He also faces fines and restitution. Zavidow appears to be currently affiliated with Paramus, New Jersey-based The Goldstein Group, a real estate management and investment firm.

Read the story here and here.

Update (10/14/11): Zavidow, now 52, has been sentenced to 18 months in prison.  Prosecutors alleged that Zavidow began siphoning funds from the company's pension plan as early as 2003, but cut a plea agreement admitting to the thefts in 2006.

Thursday, August 5, 2010

Former Mississippi Bookkeeper Sentenced In $231K Embezzlement Case

Anne Marie Neal, 41, of Lauderdale County, Mississippi, was sentenced to ten years in prison for embezzling some $231,000 from Stallworth Lumber Company where she had been employed as a bookkeeper. According to prosecutors, Neal siphoned funds from the lumber company over a nearly nine year period, from January 2000 through December 2008. She plead guilty to the charges this past May. Neal must also pay full restitution.

Read the story here and here.

Former Michigan Office Manager Charged With Embezzling $2 Million

Bonnie J. Deppert, 59, of Brighton, Michigan, was charged with embezzling nearly $2 million from Delta Research, a local machine shop operator where she had been employed as its longtime office manager. Authorities believe that Deppert manipulated payroll over a six year period to her own benefit. Deppert, who was charged with embezzlement of more than $100,000, has plead not guilty. Sadly, Delta Research, which services the auto and aviation industries, has had financial difficulites and had to cut back on employee salaries and benefits in recent years. Deppert had been employed by Delta Research for 19 years.

Read the story here and here.

Update (9/24/10): Deppert pleaded guilty this week to charges she embezzled approximately $1.8 million from Delta Research, a machine shop based in Livonia, Michigan where she had been employed as office manager.

Update (11/15/10): Deppert, now 60, was sentenced to 1-20 years in prison. She was also ordered to pay restitution.

Former California Bank Manager Pleads Guilty To $550K Embezzlement Scheme

John Tran, 37, of San Jose, California, pleaded guilty to charges he embezzled some $553,000 from Wells Fargo Bank, where he had been employed as a bank manager. Prosecutors alleged that Tran victimized mostly elderly bank clients by making unauthorized withdrawals from their accounts or by cashing cashier's checks meant for investments for himself. He was originally arrested last march on felony charges of theft from an elder, grand theft and forgery, when it was believed he had embezzled at least $900,000. Sentencing is scheduled for October 5, 2010.

Read the story here and here.
Read the San Jose Police Department announcement of his arrest here.

Wednesday, August 4, 2010

2 California Conspirators Plead Guilty To Embezzling $1.3 Million From Wells Fargo

Kimberly Kerr, 44, of Palo Alto, California and Nicholas Perrone, 42, formerly of Palo Alto and currently of Cameron Park, pleaded guilty yesterday to charges they embezzled some $1.3 million from Wells Fargo Bank where Kerr had been employed as customer service representative. According to prosecutors, Kerr used her position to execute unauthorized wire transfers of funds from one of the bank's accounts, IRA Services, to Perrone's personal account. Perrone in turn, paid Kerr a kickback percentage of the funds transferred. Kerr's and Perrone's scheme spanned a six year period, from 2002 until 2008, according to reports. Sentencing is scheduled for November 17th.

Read the story here and here.

Former Virginia Bookkeeper Sentenced For $270K Embezzlement Scheme

Rose Johnson, 45, of Hampton, Virginia, was sentenced to three years in prison for embezzling $278,013 from the offices of Hampton Roads Obstetrics and Gynecology where she had been employed as a bookkeeper responsible for payroll, paying vendors and managing bookkeeping. According to authorities, Johnson issued checks to herself for personal expenses and made unauthorized credit card charges for personal expenses. Johnson plead guilty last April. She must also make restitution of $256,126. Johnson's scheme was reportedly uncovered in 2007 after an audit revealed the discrepancies. At the time, Johnson reportedly admitted the thefts and agreed to repay the medical practice. However, the seven checks she issued were all returned for lack of funds. Her schemes may have dated back as far as 1997, when she began working for the medical office.

Read the story here and here.

Former Arizona Treasurer Of Hockey Association Accused In $500K Embezzlement Scheme

Mary Ann Williams, 47, of Phoenix, Arizona, was charged with embezzling at least $500,000 from the Arizona High School Hockey Association where she had been employed as treasurer. According to authorities, Williams used her position as volunteer treasurer to issue herself unauthorized checks and made unauthorized debit card transactions to pay personal bills with association funds. Her scheme reportedly spanned nearly a five year period from 2005 until earlier this year. Williams is also accused of forging loan documents to obtain a $75,000 loan in the association's name. During this time, Williams was employed by the Estancia Club, a private golf club in Scottsdale, as assistant controller. Observers have voiced concern that the club could also have been a victim of embezzlement.

Read the story here, here and here.

Update (5/15/11): Williams, now 48, pleaded guilty to theft and forgery charges, admitting she embezzled at least $500,000 from the Arizona High School Hockey Association where she had served as treasurer.

Update (6/14/11): Williams was sentenced to 3 1/2 years in prison followed by 7 years probation. 

Former Illinois Treasurer Sentenced In $266K Embezzlement Case

Donald W. Jacobs, 62, of Posen, Illinois was sentenced to six years in prison for embezzling $266,414 from the Posen Park District where he had been employed as treasurer. Jacobs, who was arrested last May, pleaded guilty to one count each of theft of government property and official misconduct. He had served as treasurer since 1995, according to reports. Prosecutors alleged that Jacobs used a variety of means to embezzle from the District: issuing himself 94 additional paychecks; issuing checks to a phony vendor he controlled called "D & D Services; and using District funds to pay his personal credit card bills and make mortgage payments. Jacobs' scheme reportedly spanned a five and a half year period, from March 2004 to December 2009.

Read the story here and here.

Violence In The Workplace: Can It Be Stopped?

Yesterday morning’s tragedy in Manchester, Connecticut, where eight people were killed by an apparently disgruntled employee at a local beer distributorship before he turned the gun on himself, underscores the omnipresent threat of violence in the workplace. According to published reports, 34-year-old Omar Thornton, who had recently been hired as a union driver for the distributorship, was at a disciplinary hearing with local union officials and co-workers when he opened fired with a handgun, killing 7 and wounding 3. Thornton then fatally shot himself. One of the wounded later died at the hospital. At the disciplinary hearing, Thornton reportedly had been offered the choice of quitting or being fired after he was confronted with video evidence that he had stolen beer on more than one occasion from the distributorship. There are also reports that Thornton, who is African-American, had claimed that he was a victim of racial discrimination.

According to Department of Justice statistics, approximately 800 murders occur each year in the workplace. While many of those murders are committed during robberies, an estimated 75 percent of the incidents involve co-workers, supervisors, disgruntled employees, former employees, estranged significant others, vendors, customers and clients.

What can a prudent organization do to mitigate this risk?

Clearly, it is impossible to completely prevent threats and violent incidents from occurring in the workplace. However, a comprehensive program for organizations of all sizes can significantly reduce the threat and help employers become better prepared to respond to incidents when they occur. Such a program incorporates elements of prevention, detection and response.

Prevention & Detection

Contrary to popular belief, most workplace rampages are not caused by someone who “just snapped.” There are often behavioral clues prior to the violence. Some of these include threatening statements made by the perpetrator or significant lifestyle changes. All employees, especially managers and HR personnel, should be trained to spot the signs of potentially violent individuals and circumstances. Most perpetrators of violence in the workplace possess what we have determined to be typical characteristics for violent employees. These include: males over 35 years of age; prior history of violence; chronically disgruntled; inconsistent employment history; loner with little or no family support; former military or police; excessive interest in weapons; difficulty accepting authority or criticism; substance abuse problems; and mental health problems. The training of employees and managers should also include such elements as aggression management, conflict resolution, listening and communications skills and the identification of “red flag” warning signs.

While the investigation of Omar Thornton is ongoing, Michael “Mucko” McDermott, a disgruntled programmer who killed 7 co-workers at Edgewater Technologies in Woburn, Mass a decade ago, exhibited at least six of these characteristics. McDermott had also made threatening statements to co-workers that should have set off alarm bells.

Another key to prevention is a robust code of conduct and “zero tolerance” policies. Employers must make it clear from the outset that threats and violent behavior will not be tolerated and that if corporate policies are violated the consequences are clearly outlined. Employees must understand that the company policy grants a minimum of privacy, occasionally necessitating the screening of e-mail communications, inspection of their physical workspaces and video surveillance.

Another preventive measure involves the screening of all employees. In my firm’s experience, at least 25 percent of the resumes we scrutinize include material misrepresentations or omissions. Employers must therefore have a regular background checking procedure to independently verify the information provided by the applicant. Employers should pay particular attention to gaps in the resume and should be sure to interview references and non-references alike. Likewise, criminal records must be independently checked. Does the applicant have a prior history of violent acts? Other types of employee screening to consider include psychological/personality testing and substance abuse testing.

Employers should also conduct periodic security reviews as an essential component of prevention. Policies and procedures must be regularly updated including all relevant physical, electronic and personal security considerations. Corporate facilities must have adequate entry/egress controls, along with video cameras and panic buttons installed in key locations, ideally monitored from a central station. When problematic employees are terminated, keys and access cards should be collected immediately, codes and passwords changed or deleted and employees notified of the termination.

Once preventive measures have been taken, it is also crucial to implement tools for detection. Establishing an employee integrity hotline is essential to the early detection of potentially violent occurrences. Analysis at one hotline provider showed that more than 20 percent of the (integrity-related) calls involve reports of violence, threats and harassment. The most effective hotlines have trained crisis professionals available 24-hours a day and all callers are guaranteed total anonymity. This encourages better reporting of threats and incidents in the workplace that might otherwise be dismissed.

Threat Response

Proper response to an incident requires good preparation. Every organization should create a crisis plan, establish the members of its crisis team and designate a crisis center. The crisis team should be trained using a variety of simulated incidents. It is far better to be prepared for an incident than to be forced to react to one in an ad-hoc manner.

If a threat is reported, employers must take it seriously and rapidly assess its credibility. A speedy investigation of known facts is essential and swift action must be taken with a problem employee. Intervention and employee assistance programs are excellent means of diffusing potentially violent situations. Law enforcement authorities should be notified when threats escalate or a sensitive termination occurs. In our experience, a search of the office or workspace prior to a sensitive termination may be warranted. In one case I am familiar with, a cache of various weapons was found in a disgruntled employee’s office. Law enforcement was immediately called in which led to more weapons found at the home.

In an increasingly competitive and stressful world, and especially during economic downturns, threats and incidents of violence will continue to occur in the workplace. However, with a few prudent steps, employers of any size can avoid or diffuse most threatening situations.

Washington State Bookkeeper & Non-Profit Founder Guilty In $530K Embezzlement Scheme

Carina Sunga Borja, 45, of Admiral, Washington, pleaded guilty last week to nine felony charges admitting she embezzled more than $530,000 from two of her bookkeeping clients. Borja was originally charged with 15 counts of first-degree theft in February 2009. Prosecutors alleged Borja transferred funds from her client accounts without their permission over a year and a half period from February 2007 through August 2008. Borja is the founder of the Seattle-based non-profit, Animals First Foundation and reportedly claimed that she took the money to help animals impacted by Hurricane Katrina. As part of her plea agreement, Borja was also ordered to pay $530,000 in restitution. She faces up to 3 1/2 years in prison upon sentencing on August 13th.

Read the story here and here.

Update: Borja was sentenced to 33 months in prison and must pay full restitution.

Tuesday, August 3, 2010

Update: Former Colorado Financial Controller At Non-Profit Sentenced In $736K Embezzlement Case

Marlana Lu Howell, 50, formerly of Snowmass Village, Colorado and now of Santa Fe, New Mexico, was sentenced to four years in prison for embezzling some $736,000 from the non-profit Anderson Ranch Arts Center, where she had been employed as financial controller. Prosecutors originally charged Howell with 32 felony theft counts and plead out to one of those counts this past June. Howell was alleged to have made 16 unauthorized wire transfers of the non-profits funds into her own personal accounts over a 16 months period beginning in April 2008. Howell's scheme unravelled in June 2009 when loan documents for a vehicle registered to the non-profit were mailed to the center and discovered by other officers. The vehicle was apparently being used by Howell and paid for by the non-profit. Howell was confronted in August 2009 and she reportedly confessed that she started stealing funds after she was told she would not get a housing stipend she thought she had been promised. Howell apparently changed her name to Marlana J. Atkinson and began an independent accounting practice in Santa Fe, New Mexico.

Read FraudTalk's earlier post on this story here.

Read the story here and here.

Monday, August 2, 2010

Pair Of California Bookkeeper Conspirators Charged With Embezzling $2.6 Million

Maria Lourdes B. Dionisio, 46, of Pacifica, California, and Hannah Yau, 56, of Fremont, California, have been charged in a scheme to embezzle more than $2.6 million from software programming company, Autonomy Inc., for whom they had been employed as a payroll clerk and a financial analyst, respectively. According to prosecutors, Dionisio (upper left mug shot) and Yau (upper right) conspired to issue themselves extra paychecks over a four year period. The scheme reportedly unravelled after Dionisio reported an income of about $450,000 instead of $63,000, her true salary, when she filed for unemployment benefits last May after she was let go for unrelated reasons. The pair, who have both plead not guilty, face up to six years in prison each if convicted.

Read the story here and here.

Read the San Francisco District Attorney's announcement here.

Back From Vacation

Sorry folks - We are back from vacation and will be updating the blog forthwith.