Fraud At Samone Enterprises

Fraudulent activities were revealed at Samone Enterprises in which a payroll clerk, Cindy White, embezzled more than $194,000 in 5 years.

Summary
Samone Enterprises is a packaging products and services company. Cindy White worked for Samone for almost 10 years as a payroll clerk. White worked in a small department and was accountable for payroll for about 250 employees who worked different shifts 24 hours a day, 7 days a week. Since Samone used a clock-in system to track payroll, employees forgot to clock in or out constantly, so they needed to complete a missed clock report in order to get paid for unrecorded hours. Manual paychecks were used to adjust underpayments to employees. The manual paycheck system was simple; a manager would fill out a manual paycheck request, submit it for approval to Patricia Gonner, the HR manager, and White would process the check. Everything seemed to be in order because White would try and process the checks and get them to employees within 48 hours. In addition, each department manager was required to review the payroll expense reports for accuracy twice a month.

The business unit controller at Samone, Joe Burke, found a stack of manual paycheck request forms on White’s desk one day when she was out of the office. Burke had a hunch that something fishy was going on so he selected a few manual paychecks to test and he found some patterns that brought up concerns of fraudulent behavior. Burke asked internal audit to conduct an investigation of all manual paychecks processed in White’s business unit. They discovered that in the last 5 years, 60 percent of the manual paychecks processed were fraudulent payroll request forms created by White with Gonner’s forged signature. Internal audit confirmed that White had created the manual paychecks, forged the payee signatures, and signed her or her