... This is regarding an embezzlement case that was brought to my attention. Options for the company: “The investigation of a white-collar crime like embezzlement is difficult due to a lack of physical evidence. Accusations of embezzlement do not take place after a violent act and proof of wrongdoing requires extensive research. You need to take the right approach in order to legally investigate and prove embezzlement.” (eHow Contributor, 2012) There could be a number of options for the company to take for the embezzlement case. I would recommend them to hold back and get as much information as possible before the confront anyone. This way they have a stronger case, if they question anyone right away then the embezzler has a chance to get rid of any kind of any evidence that would destory him at a trial. Paying attention to all the telephone, company emails, and all the internal records will help with determine if he has been embezzling from the company. By looking at the call log can determine who would be helping him. By having someone call the hotline and giving very important information helps stop this kind of crimes. Having the right people working the hotline and asking the right types of questions makes the investigation go smoothly. Steps for the Interview: There are a few steps that need to be done before anyone can start interviewing. You will want to gather as much evidence as possible to have a stronger case. Embezzlement is something that is hard...
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...Albrecht, & Albrecht (2006), fraud is defined as embracing “all the multifarious means which human ingenuity can devise, which are resorted to by one individual, to get an advantage over another by false representations. No definite and invariable rule can be laid down as a general proposition in defining fraud, as it includes surprise, trickery, cunning and unfair ways by which another is cheated. The only boundaries defining it are those which limit human knavery.” In other words, fraud involves intentional deception, false confidence, and reckless trickery. (Albrect, Albrect & Albrect, 2006) Different Types of Fraud What are the different types of fraud? Types of fraud include employee embezzlement, management fraud, investment scams, vendor fraud, and customer fraud. Employee embezzlement is simply the employee stealing from the employer. Investment scams involves fraudulently tricking investors into investing money into fraudulent investments. Management fraud is usually committed through misrepresentation in financial information. Vendor fraud is performed when organizations overcharge for goods or services while customer fraud is committed by deceiving sellers into charging less or giving them something they should not have. (Albrect, et al., 2006) Types of People Committing Fraud Any type of person can commit...
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...the Company in order to fund a lavish lifestyle complete with furs, jewelry and high-end clothing. Sachdeva embezzled the funds through a variety of means, including fraudulent cashier and traveler’s checks, fraudulent wire transfers, and unauthorized payments from petty cash. The Company further alleged that Grant Thornton, the company's auditor during those same years, failed to properly conduct its audits of the company's financial statements and failed to properly assess the company's internal controls, thus allowing the embezzlement to continue and the damage to the company to escalate. In particular, it claimed that Grant Thornton repeatedly assured Koss' management and its board that the company's internal controls were effective and that Koss could rely on those same internal controls and Grant Thornton's work. Grant Thornton fails to properly investigate, audit and report to the Koss board of directors and audit committee on Sachdeva’s embezzlement and fraud through (i) improper use of cashier’s checks drawn on Company accounts at Park Bank;(ii) improper wire transfers from company accounts at LaSalle National Bank;(iii) the improper use of traveler’s checks;(iv) the improper use of manual checks drawn on company accounts at Park Bank. Grant Thornton recklessly disregarded, or was negligent in not apprehending, the manipulation and fraudulent use by Sachdeva, and the concomitant waste, diversion and damage to Koss in material monetary amounts. Also, Grant Thornton made...
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...Case Study: HOW A CFO PLOWED HIMSELF UNDER By Recitta Askew ACCT217 July 26, 2014 Fraud Theory and Prevention is getting a lot of attention these days, however preventing fraud and understanding fraud continues to puzzle corporations and is the focus of many studies and reasons why many internal controls are in place today. As an example Dr. Donald Cressey a fraud expert developed what is known as the Fraud Triangle Theory which essentially states that three elements must be present in order for fraud to occur and those are, Motive, Opportunity and Rationalization. This theory demonstrates how a highly regarded bank CFO committed fraud because all three critical elements were present which enabled him to embezzle $150,000. So in order to prevent fraud we must first understand how an individual such as Mr. McKinley can go from being a law abiding citizen to a white collar criminal. Therefore fraud prevention begins with understanding the Fraud Triangle, the importance of good internal controls and the role of external auditors and how they are all connected. First according to the Fraud Triangle “Motive is the reason people commit fraud…It is the driving force”. (Biegelman & Bartow, 2006, p. 32). In McKinley’s case the motive and driving force appears to have been the emotion of humiliation, after all he was a respectable church going family man, CPA and highly respected bank CFO. Therefore the driving force of protecting his image coupled with the...
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...3-30 1 202 - Compliance with standards 2 501 - Acts discreditable 3 502 - Advertising and other forms of solicitation 4 503 - Commission and referral fees 5 302 - Contingent fees 6 101 - Independence 7 101 - Independence 8 201 - General Standards 9 101 - Independence 10 505 - Form of organization and name 11 102 - Integrity and objectivity 12 203 - Accounting principles 13 302 - Contingent fees 14 301 - Confidential client information 15 202 - Compliance with standards 3-35 1 a - The independence has been impaired b - A partner cannot be employed by a client. This violates Section 101 2 a - Ethical Manufacturing Co. has been involved in fraud. b - Herb standard did not violate any section. His client refused to fix the audited financials and he reported them to the IRS. 3 a - b - 4 a - The independence has been impaired b - This violates Section 101-5. A member cannot can not have a loan to or from an audit client. 5 a - The independence has not been impaired b - As long as Herb does not get involved in the transactions between the two clients, the Code of ethics is not violated. 4-20 Constructive fraud -...
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...ACCT 2211: Forensic Accounting Individual Test 1 Baldor Electric Singapore The finance manager, See Lay See, of Baldo Electric, embezzled nearly $227,000 over a 4 year period (200-2004). Through deliberate falsification of the company accounts, she successfully covered her crime. Required: 5 + 5 = 10 Marks 1. Using the elements of fraud, explain how this case of employee embezzlement would be deemed as fraud. (5 Marks) __________________________________________________________________________________Comments: students should consider the 7-elements (not the fraud triangle here). – “Fraud” is deception that includes the following elements 1. A representation 2. About a material point 3. Which is false 4. And intentionally or recklessly so, 5. Which is believed 6. And acted upon by the victim 7. To the victim’s damage This was a case of employee embezzlement (some might also suggest senior management fraud, as See Lay See was a senior manager; however, this was a non-collusive fraud situation). The 7-elements are required for this to be deemed fraud (but note some jurisdictions take a wide interpretation of “victim” to include potential shareholders or society at large. 1. Representation – this was a claim made by See about the company accounts being true and fair 2. Material point – this was proven to be material as...
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...Council members were receiving extremely large salaries. These salaries were the highest in the United States. According to our textbook Fraud Examination 4e, the fraud triangle examines the potential, opportunity, and rationalization to commit fraud. The above concepts will be used to exam the fraud perpetrated by City of Bell Chief Administrative officer Richard Rizzo, his Assistant CAO Angela Spaccia and the members of Bell’s City Council. The charges allege the officials misappropriated more than $5.5 million, including being paid for phantom meetings. The fact that the CAO for all intent and purposes had complete control and discretion of all administrative functions. Gave him access to the necessary documents and accounts to commit embezzlement using the city’s...
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...Running head: INDIVIDUAL PROJECT: Forensic Accountants: Fraud Busters 1 Individual Project: Forensic Accountants: Fraud Busters Pamela Turner Professor Ann Nelson Contemporary Business 508 February 13, 2013 Strayer University INDIVIDUAL PROJECT: Forensic Accountants: Fraud Busters 2 Individual Project: Forensic Accountants: Fraud Busters Determine the most important five skills that a forensic accountant needs to possess and evaluate the need for each skill. Be sure to include discussion regarding the relationship between the skill and its application to business operations. The age of information technology there is a definite rise in computer crimes, financial frauds, employee thefts and securities scams, insurance and bank frauds. The forensic accountant searches out fraud and criminal transactions in banking, corporate entity or from any other financial records within an organization. Forensic accountants take a more proactive, skeptical approach in examining books of accounting. The base of a forensic accountant is accounting knowledge. The dispersement of the knowledge of auditing, internal controls, risk assessment and fraud detection. There must be a basic or general understanding of the legal environment. The legal environment is essential in order to support the litigation. A strong set of communication skills both oral and written (Houck, 2006). Forensic...
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...models for retail online and mobile banking, call center, and IVR channels, to detect fraudulent monetary and non-monetary transactions. Commercial Banking Multi-channel monitoring and analytics for commercial banking transactions (e.g. wires, ACH, payroll) and non-monetary transactions (e.g. template creation, transaction approval) with user, account, and company-level profiling. Deposit Fraud Best practice rules and analytics for detection of suspicious incoming funds via electronic transactions and checks, to address schemes such as kiting and bust out fraud. Employee Fraud Proven rules and analytics, combined with proactive investigation tools, to detect theft of customer and bank assets, self-dealing, embezzlement, collusion, and identity shielding. Key Benefits of Actimize Integrated Fraud Management Financial institutions are challenged today by creative criminals using sophisticated fraud tactics, evolving regulations and legislation, increasing pressure to release new and innovative products, and the imperative to enhance...
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...Embezzlement and Credit Card Fraud In almost every case, white collar crimes are committed by businesses and government professionals, and are generally of non-violent nature, in which are financially motivated. The Federal Bureau of Investigation now associates a wide range of fraudulent crimes as being white collar. Credit card fraud and embezzlement are two amongst those on their list. This paper will discuss what and how these two crimes are committed, the impacts each have on businesses, and what tools are available to reduce the opportunities of each crime. First, lest start by defining embezzlement. In a nutshell, embezzlement is the theft or misappropriation of funds or property in one’s trust or belonging to one’s employer (HG.org). In order for someone to be guilty of embezzlement, the accused would have had to convert or deal with funds or property entrusted by the victim in a way that was not agreed upon. A basic scenario of this would be a manager of a convenient store pocketing money from the store’s cash register and not documenting the transaction. However, if for instance a store associate were to do the same, that associate could only be charged of larceny, because a store associate is not entrusted with the cash in the register (HG.org). Here is another example. In October of 2014, a woman was sentenced to 12 years in state prison for embezzling nearly two million dollars from her employer. Suzan Glawatz was a bookkeeper for Dr. Grassi...
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...Moise saidkov Term paper Business law Historically, embezzlement became a crime because thefts were occurring in which the elements of larceny could not be met because the thief had the right to possess the funds; thus, the prosecution could not prove the element of a “trespassory taking.” Meanwhile, proving embezzlement only requires showing either that the employee had possession of the goods or funds because of the employee’s position or that the employee had the authority to exercise substantial control over the goods or funds. Courts determine the question of substantial control by considering the employee’s job title, job description, and the practices of that particular company. Some states also have fraudulent conversion statutes, which provide for the criminalization of actions that border between larceny and embezzlement. The government can also charge individuals with attempted embezzlement. Methods of embezzlement differ. Some embezzlers “skim off the top” so that they continually acquire a small amount over a particular time interval. This method reduces the likelihood of being caught. On the other hand, some embezzlers steal a very large amount of the goods or funds on a single instance and then disappear. Sometimes company manager’s under-report income to their supervisors and keep the difference. The Internal Revenue Service requires that embezzlers include embezzled funds in their yearly income taxes. Upon returning the funds or paying restitution...
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...| Josey Embezzlement Case | | | Jeanette Elizabeth Josey is involved in a million dollar embezzlement case. She is accused of embezzling the money from her employer James Gillikin. James Gillikin is the owner of Gillikin Marine Railways, Inc., Morgan Creek Seafood, James T Gillikin Inc, Traveler Captain Jimmy Inc and Captain James II Inc. Josey worked as the office manager for the group for seventeen years. Detectives in Carteret County said that this is the largest embezzlement case they have encountered. According to WITN.com news channel Josey embezzled the money from legitimate payee accounts of the corporation’s general accounts and then converted the money to her own use. She would conceal the movement of money by stamping corporate checks with a made up office stamp with one of the five corporation names so that it appeared the money was going to where it needed to. Deputies say that she then used the money to pay off loans, debts, obtain property, pay insurance, and pay for exotic trips and vacations. Josey had been embezzling the money over the seventeen years that she worked there. It was discovered when Gilliken tried to use a debit card Josey had gotten for him. When asked to enter his zip code it was rejected when he put in his zip code. Upon going to the bank to address the problem it was discovered that it was her zip code that belonged to the card. Josey is currently being charged with two counts of felony embezzlement. Josey was your typical...
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...It has been all too common about how employees have been caught stealing from the company that they work for. There may be a variety of reasons for doing so. It could be the employee feels the company may owe them something, there could be personal financial issues that the individual is dealing with, or maybe because they feel they are in a position to perform such an act and not get caught. Not all embezzlement cases involve an employee stealing money from a firm. There are some cases that involve employees having access to customers’ accounts in order to misappropriate funds to those accounts for a personal gain. In February 2014, an employee at Dover Downs Hotel and Casino was arrested for allegedly placing unauthorized credits on patrons’ player cards. Jane (whose name has been changed) had worked for the casino for two years. She became employed initially as a Line Cook and then later on, she was hired to work in the Capital Club department in August 2013. This department is responsible for issuing player cards to patrons. These cards serve as a means for customers to earn and redeem points. The ways for a customer to earn points is through playing the slot machines or having points physically placed on their card by a Capital Club representative. The points serve as cash, so for example, 1 point equals $1. The more points you earn, the more money you have to play with. During her employment with the department, Jane befriended two other patrons. They would come see...
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...Business Fraud By: Accounting Information Systems Professor Broderick Martinez September 14, 2014 In Pittsburg, Pennsylvania, an office manager of an Upper St. Clair accounting firm pleaded guilty to last Wednesday to wire fraud and embezzlement of about $270,000 from Cybergenetics Corp. in Oakland, California. Mary Schneir admitted to shuffling money into and out of accounts of three clients when she was working as an office manager of Karna C. Goldsmith CPA firm. She used many of those funds to pay her mortgage and credit card debt. This is not the first time that Mary Schneir stole money, she was recently sentenced to 30 days in jail for stealing $19,000 from Bethel Park cheerleaders organization. The three victims included A.L. Brourman Associates, a Downtown public relations firm; its owner, Audrey Brourman; and Cybergenetics, a forensic crime scene and DNA business in Oakland. Ms. Schneir basically pilfered money from accounts and then maneuvered the money from other accounts when the bills came so that there wasn’t any gaps. Currently Ms. Schneir is free on bail until her sentencing on February 19, 2015 (Ove, 2014). Mary Schneir does not really fit the profile of an average fraud perpetrator, she is active in her local community and served as President of the Bethel Park Junior Cheerleaders. She is a mother of two and it seems that more and more things are coming to light after she was charged in connection with stealing money from the Bethel Park Junior Cheerleaders...
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...Alex Fox Enrollment # 714477 Course ACCT 4235 Lesson 1 1) A 2) D 3) A 4) D 5) A 6) B 7) B 8) C 9) D 10) D 11) D 12) B 13) B 14) C 15) B 16) B 17) C 18) D 19) A 20) D 21) C 22) D 23) A Case 3: 1) Customer Fraud 2) Consumer Fraud/ Investment Scam 3) Employee Embezzlement 4) Management Fraud 5) Vendor Fraud 6) Customer Fraud Case 7: 1) Fraud is being committed against the firm in this case by Bob. Fraud occurs when a person intentionally cheats or tricks others for their own benefit. Regardless of the magnitude of the charges or the fake excuse given to the reason for the charges, he is intentionally charging non-business lunches to his employer. This is also known as employee fraud, or occupational fraud. 2) As a fellow intern at the firm, you have an ethical responsibility to your employer to report Bob’s wrong behavior. In this particular case, the fraudulent act can be easily corrected. Since Bob is justifying his behavior by saying the recent memo pertaining to meal expenses does not apply to him because he is an intern, you should try to help Bob see the error of his logic and encourage him to correct the charges. If Bob is still unwilling to change his behavior after you explain this to him, then the appropriate managers or employers should be notified. Case 8: The additional revenue needed will be the fraud loss divided by the profit margin. The loss here is $50,000 and the profit margin is 7%. If we divide 50,000 by the 7% (...
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