Case in Point: Employee Embezzlement

Trusted Employee Gnaws Away Profits at Termite Control Firm


By William R. Kauppila, CFE, CPA

The author, a university instructor, reads a newspaper account of an embezzler, interviews the firm's owner, and shares the results with his class. Here are warnings to business owners and lessons for fraud examiners.  

That morning at breakfast, I read in the local newspaper about Joanne Rodrigues, 54, the former office manager at Aloha Termite and Pest Control, who had embezzled nearly $900,000 from the company. She had been sentenced to one year in prison, placed on five years of probation, and ordered to pay restitution for the money she had stolen in 3 1/2 years.1  

I decided that I would take the article to a fraud class I would begin teaching that evening in the MBA program at Chaminade University in Honolulu, Hawaii, because it included some embezzlement basics but also raised some questions.

Following her indictment, Rodrigues claimed she had a gambling problem. However, the deputy city prosecutor said the problem was "purely greed." The article said Rodrigues wrote checks to purchase chemicals for the business but then cashed the checks herself. Company owner Shawn Murray said he considered Rodrigues a dear friend; she was godmother to his firstborn child. "She would always show me the numbers, and they looked OK. She was paying the bills, and she assured me not to worry, that we would get through these tough [economic] times, and we would get through them together. All the while, she was pocketing every penny she could."

As I read the article, I couldn't help thinking about how much in common this embezzlement case had with so many other cases with which I was familiar:


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By Jane Fowler
 
By Bernardo
 
By Douglas_16
Whew. Nice way to control a pest. Very interesting summary.
 
By Muhammad_Faisal
Few more additions, 1)- Cheque must be crossed and non bearer. 2)- Seperate persons incharge for Finance and Cheque signatures stating levels. 3)- Employee back ground investigation must be consider (at least two levels) 4)- Suppliers back ground must be investigated, in other words must pay to approved and verified suppliers Muhammad Faisal ACMA, FPA