ABC News reported earlier this week that police had a arrested 33-year-old woman on charges of embezzling over $1.6 million from the law firm at which she worked. Detectives traced the missing funds to the personal bank account of the woman arrested (a former employee of the law firm) who had used wire transfers and other means to divert the money.
Earlier this week the U.S. Attorney for the Southern District of New York announced the arrest of Dennis Dowd, former senior manager of human resources for Hitachi America, a New York and
California-based electronics manufacturer, in connection with a scheme to embezzle approximately $8 million.
Briefly, according to the complaint, Hitachi America maintained a plan to provide health benefits to eligible employees. Dowd was a senior manager of corporate benefits for Hitachi until March of this year responsible for managing various aspects of Hitachi’s employee benefits programs, including the health benefits plan. In January 1997, Dowd opened a bank account in the name of a fictitious entity into which he later deposited millions of dollars in payments for insurance claims belonging to the health benefits plan.
Dowd diverted the funds in the bank account he created to pay for personal expenses related to himself and his family, including, among other things, consumer goods, luxury cars, and a house in Vero Beach, Florida.
Dowd was charged with one count of embezzlement, one count of fraud, and one count of money laundering. He faces a total maximum sentence of 30 years’ imprisonment if convicted.
According to a CNN report today, community organizing group ACORN has fired two board members, Karen Inman and Marcel Reid, it had asked to investigate allegations that the brother of ACORN's founder embezzled nearly $1 million from the group eight years ago. Inman responded that the termination will lead to a criminal investigation. There is already a lawsuit underway in which Inman and other members of a committee appointed to look into possible embezzlement and its concealment have sought access to ACORN books and records.
In a recent podcast published by the law firm of Pepper Hamilton, Maureen Dwyer, an attorney in the firm's Philadelphia office, and member of the firm’s Litigation and Dispute Resolution Department, was interviewed concerning the issue of employee theft. In the 9-minute interview, Dwyer provides recommendations for how companies should handle employee theft. Among other things, Dwyer advises that, when addressing embezzlement, a company needs to be careful not to overstep its bounds and expose itself to liability. Dwyer also covers warning signs of embezzlement, how to conduct an investigation into employee theft once discovered (e.g., conduct an internal investigation or call in external resources; preserving evidence, etc.), when to notify the company's insurance company and the police, and alternative corrective actions.
The forensic accounting firm of Rosenfarb Winters LLC has recently published a condensed version of its popular 3-part series on embezzlement detection and prevention by partner Stephen Linker.
After defining embezzlement, the newly published article discusses the three key factors that determine whether a person will commit fraud.
The three factors, which comprise the so-called “fraud triangle,” are:
The article also reviews characteristics of embezzlers, different types of embezzlement schemes, and the importance of internal controls.
Read the full article here.
As one of its top stories for 2007, the Carroll County Times, a Maryland newspaper, cited the case of Karen Ann Malinowski, a Maryland woman who is awaiting sentencing after pleading guilty in July to embezzling nearly $250,000 from an elderly resident, Lois Hundertmark, to whom she was providing care.
Malinowski was the third person in Carollo County to be charged with embezzlement in the last two years. Malinowski had been stealing from Hundertmark for more than four years, even after Hundertmark died in 2006. Hundertmark's son alerted authorities to the theft after he noticed the loss of funds.
See the full story here.
The FBI announced earlier this month that Gary M. Aumann, a manager for American Airlines at O'Hare International Airport, was charged with embezzling more than $3 million from the airline to fund a lavish lifestyle that included the purchase of numerous vehicles, riverfront property in Missouri, a 35-foot yacht, and monthly payments to a dancer.
The scheme involved the diversion by Aumann of more than $3 million in "business" toward companies owned by co-defendant Donald Down even though Down's companies, A & D Supplies and Addison Business Supplies, did no work for American. The two simply split the proceeds, according to the charges.
See the full story here.
The prevalence of massive corporate financial scandals and white-collar crimes such as embezzlement in recent years has increased demand for forensic accountants. Colleges are meeting the demand by starting up courses of study that provide students with a degree or certificate in forensic accounting.
One such institution is Middlesex County College in New Jersey, which began offering a certificate program in forensic accounting this fall. Richard Ellison, chair of the Department of Accounting and Legal Studies at the county college, described forensic accounting as part accounting and part "detective work" that requires a combination of auditing and investigative skills.
Middlesex's program is patterned on the Forensic Accounting and Fraud Investigation program offered at West Virginia University. WVU's program is among the most highly regarded in the nation.
Utica College in central New York offers a program in Economic Crime Investigation.
A 65-year-old former town official in Maine who embezzled more than $46,000 from the town over 10 years will be spending 15 months behind bars after pleading guilty on Friday.
See full story here.
The District Attorney for the District of Massachusetts announed in late October that Grace Oliver, of Acushnet, Massachusetts, was sentenced to 46 months incarceration on charges of possessing forged securities of a corporation engaged in interstate commerce.
Oliver had earlier pled guilty, on August 6, 2007, to embezzling funds from her employer, Superior Drywall in Westport, where she served as a bookkeeper from January 2004 to December 2006. Oliver forged 447 company checks payable to herself, as well as her credit card companies, mortgage holders, and others to whom she owed money. Oliver secretly prepared the checks and forged the signature of the company’s principal owner. Oliver deposited some of the checks into her personal bank accounts, others she used to transfer money to her friends and associates. Oliver covered up her scheme entering false payee information into the company’s accounting software, to make it look as if the checks were legitimate. Over the course of the scheme, Oliver embezzled a total of over $1.1 million.
See the full release
