Checking Account Fraud

When Employees Steal (Part 6)

By Regent Emeritus Joseph R. Dervaes

Fraud's Finer Points 

It was a classic fraud scenario: a key employee who was dishonest and an enterprise without critical internal controls. It cost the employer a whopping $188,037. The combination enabled "Julie," the custodian for two checking accounts, to steal from both an employee union fund and an advance travel fund.

Julie regularly took checks from a wide variety of miscellaneous revenue sources and deposited them into the two school bank accounts but in ways that profited her - not her employer. The scheme lasted five years before external auditors detected it during a routine audit of the advance travel fund. That was when the auditors noticed the name of the payee on the front of some redeemed checks didn't match the endorsement information on the back. It was that simple to uncover.

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