Case In Point

Not Ship Shape: Tanker Company Officers Embezzle Unhindered

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Written by: Alan Van Praag, J.D. Mark Aspinall
Date: November 1, 2007
read time: 15 mins
Accounting and Auditing Fraud Prevention and Deterrence Fraud Schemes Transportation and Warehousing

Three bodies of auditors -- from the state, the corporation, and Arthur Andersen -- were unable to discover that high-ranking officials in a Middle Eastern oil tanker company had embezzled $100 million in 10 years. CFEs can assess what went wrong and determine red flags, and methods of prevention and detection in this high-dollar loss case.

The three top executives of the Kuwait Oil Tanker Company (KOTC) appeared to be upright conservative managers. They seemed to be calmly steering the shipping company through the rough waters of the Iran-Iraq War of the 1980s and the Persian Gulf War of the 1990s. But these trusted officers were using the company as their own personal piggy banks.

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