Weights That Don’t Measure Up (Part 1)

False Billing Scheme Case Study

By Joseph R. Dervaes
joseph-dervaes-50x50.jpg   Fraud’s Finer Points 

"Richard” was a rising political star in the community. He worked on voter registration projects, was the campaign manager for a gambling initiative, and donated to many state political campaigns. Known as a high roller, he entertained local dignitaries at his rented home on a lake near a major metropolitan city and hosted parties on an 80-foot, leased yacht.

To fund his extravagant lifestyle, Richard began a trucking business and used his political contacts to secure a lucrative freight contract with the Washington state Liquor Control Board (LCB). Unfortunately, he wasn’t a good businessman, so he eventually resorted to submitting false invoices to the LCB and received nearly $840,000 in unauthorized payments over a three-year period for services he didn’t provide. “Gerry,” the complicit LCB supervisor, processed the fraudulent payments, which included inflated weights on legitimate deliveries, deliveries that didn’t occur, and duplicate billings. In fact, 76 percent of all Richard’s invoices to the LCB were false.

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