Recently, we were engaged to assist in quantifying the loss associated with an employee theft. Company management became suspicious when by chance they identified a QuickBooks check entry issued in the name of a sales rep that they believed hadn’t made a sale for the company in quite some time. They verified this in a telephone call with the sales rep. This revelation prompted an internal investigation that eventually led to the discovery of nearly $500,000 of check, electronic transfer and credit card misappropriations in a little over one year. The company had no clue whatsoever that they had been the victim of such a material embezzlement.
As is customary in many of our forensic examinations, we initiated a complete background report on the perpetrator. The results were breathtaking. The results associated with background checks vary for many reasons, such as areas resided, employers, family members, criminal and driving convictions and others. In this case, the background check was nearly an inch thick—and we were advised that it was incomplete due to the volume of data.
Not surprisingly, the individual’s resume presented to the employer at the time of hire was a complete fraud. During the interview process, the candidate was professional, articulate and obviously very convincing (as are many that perpetrate financial crimes, let alone identity theft). He was hired at a $70,000 salary. The employer was so convinced he was the “perfect fit” after the interview that they extended him an offer on the spot and wanted him to start immediately, which he did.
Prior to the theft discovery, and during his 18 months of employment, he had performed exceptionally well—so much so that he was in line for either a substantial raise, performance bonus or combination thereof. Needless to say, the employee also believed that he was performing exceptionally well – as was the company – and as a result he decided to reward himself with a substantial amount of the company’s revenues.
The background check we initiated identified the following:
- 11 aliases
- 41 residential addresses
- 26 criminal records in five states
- 10 liens and judgements
Anyone of the above likely would have prompted the company to move on to the next candidate, had they only known.
A $500,000 embezzlement could have easily been prevented had the company taken the time to initiate a thorough background check on their star candidate who was going to handle their books.