To Catch a Thief

Use the Proof-of-Cash Method When Casting for a Fraudster

By Ken Stalcup





"Truth, like gold, is to be obtained not by its growth, but by washing away from it all that is not gold." – Leo Tolstoy

Russell has an online gambling habit and not a lot of money to support it. But he’s got a plan; he’s going to embezzle from his company. He just has to figure out how he’ll do it.
Fortunately, he’s really close to the money. He’s been the bookkeeper for a mid-sized electronics distribution company for more than seven years. Russell and his assistant manage most of the accounting functions.

Russell quickly rules out stealing from the standard stream of customer income. Tammie, the owner of the business, is no auditor, but she would notice if he manipulated any of those large customer payments. Russell considers his alternatives and finally settles on an area he thinks no one will detect – and no one does for more than a year and a half. By the time the company discovers Russell’s crimes, it’s $150,000 poorer.

A hired CFE eventually uncovered Russell’s clever embezzlement scheme with the powerful “proof-of-cash” tool – an excellent addition to any CFE’s arsenal for finding evidence of hidden or missing activity affecting the cash accounts.

Though this case is fictional, it shows the use of a valuable tool for CFEs.

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By mohorton69
A bit oversimplified, but for many organizations (especially the small business and non-profits) such examples are necessary. Most business owners just don't "think like a fraudster" so such lessons are valuable.
By William_14
This is an good presentation. It clearly explains the Proof of Cash technique with a scenario and exhibits that even a jury could grasp.
By t_hughes
By John_124
In real life, it's very easy to compare book/bank Receipts/Disbursements to see if they equal. This example is somewhat poor. I have a way better actual scenario to submit if I can get permission. John K. Pidgeon
By Anonymous