Talk about sloppy accounting practices...

[REWahoo]

Bookkeeper admits stealing $6.9M

BOSTON (AP) - A bookkeeper pleaded guilty Monday to embezzling $6.9 million to pay for such things as a ranch in Vermont, a life-size statue of Al Capone and a private performance by singer Burt Bacharach, federal authorities said.

Angela Buckborough Platt, 43, pocketed the money over six years while an accountant for J & J Materials Corp. in Rehobeth, Mass....

...Prosecutors said Platt — who made $40,000 a year — wrote checks from company accounts to herself and eventually began writing checks for nearly $50,000. Her theft was discovered in June by another bookkeeper.

Platt's purchases included six talking trees modeled after the "Wizard of Oz" characters; a 20-foot-tall smoke-breathing dragon; a four-bedroom house in Rhode Island; more than 35 vehicles; and a replica of a Ford Model T customized to look like a green goblin.


An annual audit of the books by a competent accounting firm might have been a good idea....

 

[Brat]

It all depends on how she extracted the money.

Years ago there was a routine Wage Hour audit of an employer. The Investigator went out to interview employees to verify that they were paid for all hours worked, couldn't find several. The book kpeeper took off. She had put 'ghosts' on the payroll and was cashing their checks. Since the employer had cost + contracts and she distributed each ghost's hours across several the scam went undetected for years.

This happened before IRS computers matched SSNs. Today that would be difficult but variations on that mo are still out there and can go undetected for a very long time.

 

[REWahoo]

It all depends on how she extracted the money.

Years ago there was a routine Wage Hour audit of an employer. The Investigator went out to interview employees to verify that they were paid for all hours worked, couldn't find several. The book kpeeper took off. She had put 'ghosts' on the payroll and was cashing their checks. Since the employer had cost + contracts and she distributed each ghost's hours across several the scam went undetected for years.

This happened before IRS computers matched SSNs. Today that would be difficult but variations on that mo are still out there and can go undetected for a very long time.

No doubt there are many creative ways to embezzle funds and go undetected for a lengthy period of time, but I don't see much creativity here.

I would think even a semi-competent audit would stumble over multiple checks written by a bookkeeper to herself over a 6 year period, especially when at least some approached $50,000. According to the article, that never happened...she was ratted out by a co-worker.

If I were J & J Materials Corp, I think I would be very unhappy with my auditing firm.

 

[MooreBonds]

A few years ago, there was a similar situation with locally-based global engineering/construction company (Fru-Con). Their CFO (I believe, or some other high-up bean counter) wrote checks to a sham sub-contractor for things like rock removal (very expensive), etc.. Ended up totaling something like $3 million + over a number of years.

In a situation like that, even with an auditor, all an auditor would do is ask the subcontractor shell to verify the funds received. The subcontractor (controlled by the CFO) would simply verify the expenditures.

Of course, with several people involved in the accounting department, the odds of pulling off something this extreme is rare, since someone is bound to see the peculiarity of the CFO being involved in a subcontractor's contract with the firm.


What amazes me is the stupidity of this woman. ***35*** cars!??!! You know what the insurance alone would cost on that fleet? Where did she keep them all?

Embezzling all of that money - even if she declared the income as a corporation and paid taxes on it - would have allowed her to quit her job and quietly retire. Instead, she fritters it away on models of talking trees, a model T ford....yet, continues to slave away at her job. Almost like a drug addict, unable to satiate her addiction to spending money on outlandish things, who continues to work to do nothing more than feed her spending habit.

 

[Brat]

I agree that the embezzler has, broadly speaking, an addiction issue.

Few private companies have an independent audit. They are expensive. Their accountant's job is to prepare taxes and assist in other ways.

As for the construction company, where was the project estimator and manager? They are the ones who should have noticed the scam and are usually the ones who sign off on the vendor's bills. Again, a smart embezzler takes small bites so they may not have noticed.

 

[bssc]

One of the accountants in my Dad's government organization was caught, not by the auditors but by a tip when they were renewing his security clearance. Someone asked them, "How does he afford a huge house and cars on a GS-14 salary?" Government practice was to write a check for any balance in any account at the end of the year and send it to the Treasury. He wrote the check to himself. My dad said that the guy was always helpful and knew everything about the system.

 

[Nords]

No doubt there are many creative ways to embezzle funds and go undetected for a lengthy period of time, but I don't see much creativity here.

I've heard the urban legend of the civil-service comptroller who created a soldier.

He was eventually tripped up by not submitting a travel claim. By then he was "in command" of a fully-equipped, fully-trained platoon that was eventually going to have to deploy or retire or do something to get him out of the corner he'd painted himself into. He was spending more time nights/weekends taking care of his troops than he was spending on his day job!

My FIL was once given an overtime check that had been calculated by the computer to be the sum of everyone else's overtime paychecks. He managed to keep a neutral expression and to calmly tuck it away for future consideration. He spent the weekend having a lot of pictures taken and deciding whether to cash & run or sell it for its novelty value. Unfortunately he wasn't able to go to the media since the check had been created by CBS news, but he had a lot of fun talking it over with the bosses the next week.

 

[Texas Proud]

Sometimes it is someone else in the company that makes the mistake...

I was a trust officer for a few years... dealt with many dollars every month.. I would say about $2 billion a month with the ins and outs...

Well, there was this claim we had made on an overpayment... it took many months, but we eventually got about $96,000 back... it was sitting in a suspense account in the ops area... they wanted to get rid of it, so called me since they knew it was my trust the claim was from (but, the trust already had the money as we had to pony it up as it was our mistake)... so the trust was not really due the money..

I said, well, send the check to me... the next day I have a check in my hand made out to ME for the $96K... and since nobody was looking for it, I could have easily deposited it and nobody would ever have known... I went into my boss and showed it to her and asked 'what would prevent me from taking the money?',,,, needless to say she was a bit upset...

 

[jazz4cash]

I said, well, send the check to me... the next day I have a check in my hand made out to ME for the $96K... and since nobody was looking for it, I could have easily deposited it and nobody would ever have known... I went into my boss and showed it to her and asked 'what would prevent me from taking the money?',,,, needless to say she was a bit upset...

Wouldn't that payment generate a 1099? As for the construction company scams, I always think about the customers that got screwed into paying for all that garbage. I don't see how a business could properly pay taxes and such with such poor accounting and audit practices. Bookeepers are not accountants.

 

[Nords]

Wouldn't that payment generate a 1099?

Not even close.

A couple months ago I asked a credit union to close a CD that I'd opened as the treasurer of a non-profit. I was going to carry the check from that account to deposit it in the non-profit's checking account at a bank. It wasn't very difficult to figure out-- both accounts had the name of the non-profit in them, I sent the letter on the non-profit's stationery clearly identifying to what the check should be made out and signing my name as "Treasurer".

The credit union made it out to me anyway.

The serious abuse wouldn't be taking the money to Vegas. The real undetectable crime would be writing yourself a nice donation acknowledgment on the non-profit's stationery and taking that mammoth charitable deduction on your next tax return...

 

[Texas Proud]

Wouldn't that payment generate a 1099?

No, it was inside a suspense account and payments from it do not create 1099s...

BTW... I would not have sold out for that little of money... I had other ways of getting some... I probably could have stolen acquired $20 million or so before anybody would have even got a wiff of it... one time I told a new manager when she asked me a question about embezzling money that the one she was asking about would be stupid, I could do better doing X, Y or Z.... she went away worried..

 

[tryan]

We had a VP in my mega corp who set up a scam minority corp - headed by his wife - which whould receive a subcontract to purchase and load new computers for a large government contract. Went undetected for years until government auditors questioned the excessive rates being charged. Turned out the charges were just the tip of the ice berg ... millions of $$ were basically laundered thru the corporation so this VP his wife and one other employee could live the high life.

What's interesting is he settled by serving 2 years in jail (wife did NOT do jail time) and paying $2 million in restituion ... this after bilking the government for more than $6 million.

Sometimes CRIME PAYS !?!? :

 

[Nords]

Sometimes CRIME PAYS !?!? :

I'll have to ask Boesky & Milken to get back to you on that one...

 

[Texas Proud]

I'll have to ask Boesky & Milken to get back to you on that one...

Milken walked away with millions.... now, he could have earned a lot more than he walked away with if he had been honest, but he was not even close to poor...