The bookkeeper did it

Source: AMagill

Shalena P. Leggett worked hard while employed by a Sacramento real estate developer. But rest assured, her employer wishes they had never hired her. In fact, they have 468,000 reasons why hiring Leggett turned out to be a very bad idea.

From March 2008 through October 2009, Leggett wired $382,000 from her employer’s bank account to an account in the name of her son’s grandmother. Unfortunately for Grandma, it looks like Leggett used the funds for her own personal expenses and not Grandma’s.

In addition, Leggett stole her company’s credit card and made ATM withdrawals totaling $86,000. (To add insult to injury, we all know that cash withdrawals from credit cards normally come with crushing interest rates.)

Total loss: $468,000

Not a bad return for Leggett, given that she only worked for the developer for 20 months!

Here are some points to ponder:

  1. Could this happen at your business? Does a “trusted” employee have the ability to wire funds from the company’s accounts? (Note: As this case shows, never rely exclusively on your bank to detect internal fraud.)
  2. How often does your company reconcile its bank accounts? Is the reconciliation performed by someone other than the employee who completed the original transaction?
  3. Does the same employee control your company’s bank accounts and handle incoming mail? (Hint: This is a REALLY bad idea.)

The three areas mentioned above are just the beginning. From an experienced fraud practitioner’s perspective, there are many, many lessons to be learned from this fraud.

Here is the problem: businesses rarely invest the time to learn from the misfortunes of others. Unfortunately for them, they may end up being the next victim.

I can almost guarantee that within the next 60 to 90 days, I will read about a similar case involving a bookkeeper, fraudulent wires, and a stolen credit card. The company in question will likely lose at least six figures, and the perpetrator may or may not receive some form of punishment. As for the money, that will be long gone, never to be seen again. The proceeds from embezzlement schemes such as this are rarely recovered.

No one can guarantee that your company can become “fraud free” (if they do, they are lying or don’t know what they are doing). But trust me, you don’t have to ignore the threat or wait for  fraud to happen. Thinking that it will never happen to you is tempting fate. Victims of fraud, especially small businesses, never feel like they had it coming. On the contrary, it normally hits them like a ton of bricks.

With minimal time and money, you can dramatically reduce the likelihood of fraud happening. Really. Prevention does pay off. You can never eradicate the threat of fraud, but you can make it much harder for employees as well as third parties to steal from you.

If nothing else, please invest one minute of your time to consider the points I raised above. It may end up being the best investment you’ve made all year.

If you are interested, here is a press release from U.S. Attorney, Eastern District of California:

Need a writer that understands fraud? When you hire me to write an article, blog post, newsletter, or white paper you get an accomplished writer that is also an expert in fraud.


About Paul McCormack
I have over 20 years of experience in corporate fraud and intellectual theft prevention, detection and investigation. Unlike many fraud experts, I have both industry and professional services experience. To date, I have conducted over 800 interrogations of fraud suspects including numerous senior corporate executives. As a freelance writer, I have written over 1,000 articles on a broad range of topics. My areas of expertise include: • Asset Misappropriation • Big Data • Bribery, Corruption, and Collusion • Check, Wire, ACH, and Credit Card Fraud • Consumer Fraud • Corporate Security • Cybersecurity • Data privacy (Europe, Brazil, Russia, India, and China) • Drug Trafficking • Embezzlement • Employee Fraud • Executive Protection • Fintech • Financial Statement Fraud • FCPA • Healthcare fraud • Identity Theft • Intellectual Property Theft • Internal Audit • Interrogation Tactics • Loss Prevention • Mobile Fraud • Money Laundering • Operational Excellence • Organized Crime • Payments Fraud • PCI Compliance • Retail Fraud • Risk Management • Terrorism and Counterterrorism • UK Bribery Act • Workplace Violence

4 Responses to The bookkeeper did it

  1. Pingback: You read it here first « Fraud Happens

  2. Pingback: Dishonor among thieves « Fraud Happens

  3. Pingback: “She’s just a wolf in sheep’s clothing” « Fraud Happens

  4. Pingback: Bookkeeper plays “hide and seek” with company’s bank records « Fraud Happens

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