Association of Certified Fraud Examiners
American Institute of Certified Public Accts.
American Institute of Professional Bookkeepers


1498 Reisterstown Rd.
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email: info@auditorsinc.com

The below summary is based on a story printed in FSB
-
April 2002 -
Confessions of an Embezzler
Author: Cora Daniels. Grayed sections represent Auditors Inc. commentary.

Sandra (a false name to protect her identity) is a convicted embezzler. She is a 38-year-old mother of 2. She is standing outdoors, smoking a cigarette during this interview, because when she was in prison, she was not allowed to smoke indoors. She was the bookkeeper for Hollow Metal Door Co., a nine people, small commercial door manufacturer in the heartland of Kansas. And she stole $250,000.00.

"I'm not a bad person. But I did a really bad thing ."

The sad thing is that she probably really isn't a bad person - not in the way that we think of the traditional criminal. She momentarily lost her way and got in too deep. That is how it usually happens.

"White-collar crime isn't rare, which means Sandra isn't unusual. But fraud experts will tell you that small businesses are the most vulnerable to internal theft from employees like Sandra.

The typical scheme occurs at companies with fewer than 100 employees, and the average amount stolen is $120,000.00, vs. just $10,000.00 for Fortune 500 companies. The crime, spread over years, usually forces small companies into bankruptcy."

Ms. Daniels learned more than she bargained for in the area of white-crime including the fact that business owners usually blame themselves when they discover embezzlement, so they rarely report the crime and the criminal goes unpunished.

And the business owner is partially culpable to the extent that s/he made it easy for the thief to steal. We are not trying to absolve the criminal of their guilt. The thief makes the decision to steal but the decision could not be made if the business owner were more diligent.

And big surprise, other small business owners that were stolen from did not want to speak with Ms. Daniels regarding their experiences. Sandra only agreed to speak with Ms. Daniels to "help stop other Sandras".

Sandra began working for the company in 1987 doing administrative work and helping with the bookkeeping. A married couple who founded the company soon treated Sandra like their daughter. "They saw me get married, have kids, grow up -they were good to me."

By 1992 Sandra and her husband found money to be very tight and a constant balancing act. Sandra had fallen behind in her credit card payments. Her debt was building. "I panicked, she says".

Sandra's solution to her debt problems which she now calls the "stupidest idea" resulted in separating her from her family, being sentenced to jail or as she tells it, "my death".

In the dozens of interviews we have done, the person stealing never believed that they would get caught and certainly never would they go to jail. And statistics show them to be right.

Sandra needed $672 to pay a credit card bill. She didn't have it. She thought, "just this one time, just to get back on my feet, no one will know, she says".

The check cleared and nothing happened. Why should it? She was trusted! So Sandra wrote another check, and another and another and well. . . She saw how easy it was and succumbed to temptation. "As crazy as it sounds, it was so easy after a while. It had gotten to the point where it truly didn't feel like I was doing anything wrong."

She didn't purchase luxury items - she simply paid her common ordinary bills -for seven long, sleepless years. She was caught during a vacation given to her by her parents. One of her old canceled checks appeared and upon her return she was confronted with the evidence and immediately fired.

For the first time, she suddenly realized that she would be going to prison. Sandra was indicted over the cries of her 2 children to 18 months in jail. But her family wasn't the only one to be affected.

The family that owned this small door company was also affected. There were signs that the business was stressed. At Sandra's hearing, the owner testified that his company would spend the next 10 years digging out from under the theft. The owner stated "I've worked 10 to 14 hour days for 30 years. My sons have worked summers. My wife has mopped floors and cleaned bathrooms... she wiped out years of my hard work."

The emphasis on this story is from Sandra's point of view - how her life was devastated. But she brought this on herself.

The owners of the business did not - except that their vigilance was lax .

While in prison, Sandra discovered many others that had embezzled and that they had taken much larger amounts of money.

"And Sandra is convinced, and takes some comfort from it, that the Cary's, stung once, could never have this problem again. But could you?"

 
 
 

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