Stealing Cash with a Smile

The Affable Courier Who Pocketed $250,000


By By Kenneth C. Citarella, J.D., CFE, and Mindy Eisenberg-Stark, CFE, CPA

2010-JulyAugust-Affable Courier 
Fraudsters pay close attention to how systems work in a business. That’s how they find their opportunities to steal. The story of how a successful medical practice lost at least $250,000 in an employee embezzlement scheme illustrates that when internal controls fail, the devil might indeed be lurking in the details.

Here are the details of a classic “from the deposit” cash theft scheme from the Occupational Fraud and Abuse Classification System – the ACFE’s “Fraud Tree.” (See the 2010 “Report to the Nations.”)

Westchester Medical Associates (WMA) was a nine-physician, five-office medical practice in Westchester County, N.Y. Its offices, which provided a wide array of services, were managed from an executive office at a separate location. The practice worked hard to apply good internal controls consistently in each office. All personnel clearly understood WMA’s straightforward money-handling procedures. (All the names of businesses and individuals are fictitious to protect the privacy of the victimized practice.)

 
For full access to story, members may sign in here.

Not a member? Click here to Join Now. Or Click here to sign up for a FREE TRIAL.

Related Articles

Supreme Court Limits Widely Used Anti-Fraud Law

On June 24 the Supreme Court scaled back an anti-fraud law that prosecutors have regularly relied upon to convict business executives and politicians: the “honest services” law.

Expert Guest Instructors

Ways ATF instructors help teach college students practical fraud examination and forensic principles.

Lauded as Anti-fraud Trailblazer

ACFE Chairman and Founder Joseph T. Wells, CFE, CPA, received a Doctorate Honoris Causa from York College of The City University of New York.



 Your Rating:
Your Review:
  
Reviews
 
By Moayad_Al Homsi
 
By Little Bahama Bank
Excellent points! So many assumptions are made about common tasks. It was clear that a detailed understanding of the entire cash collection and deposit process was need - and that it extended to the courier - to even begin to audit the process. That didn't happen with the outside accountants.
 
By Premanand_Dhoomon
As often the case non complying with basic accounting and internal controls result in fraud.
 
By Nick_1
good
 
By JRHelton
Great example of how losing sight of the basics - reconciling bank statements - can cause a lot of harm. Superb job with the story!
 
By Stacie_3