Embezzler Sentenced to 33 Months in Prison for $2.5M Fraud Scheme

On February 28th, a San Jose resident was sentenced to 33 months in jail and ordered to pay $2,618,000 in restitution for mail fraud and embezzlement. The former Emeryville based employee was also ordered to serve a three-year term of supervised release.

According to the plea agreement, between March 2013 and January 2018, the San Jose resident submitted bogus expense reports to his employer’s finance department;, in turn, the company paid him more than a half million dollars. He also acknowledged creating fraudulent invoices from what appeared to be from six different companies. The San Jose resident controlled these six enterprises and created false statements showing that they administered testing and quality assurance services when in reality no services were rendered at all. After the invoices were approved, checks were made payable to the fake entities and sent to post office boxes that he had rented for his illegal operation.

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Prevent This From Happening to YOU!

Where there is an opportunity to exploit a company for money, there is always someone willing to take advantage. It is important for companies to have internal processes to prevent invoice fraud and other crimes. Below are a couple recommendations by Next Process to help prevent this from happing to you:

• Three way matching: This process involves matching an invoice with the purchase order AND the receipt of goods.
• Double Check Invoices: Make sure the invoice you received has a legitimate invoice date, email address, contact information, bank account number, and bank details. It is easy to a quick google search.

For additional recommendations click here to see the full 7 Tips For Preventing Invoice Fraud by Next Process.

Make Sure Your Clients Take a Proactive Approach To Protecting Their Business Should a Loss Occur

Make sure your clients have crime insurance. Take the steps to ensure that your clients are covered by calling one of the Berkley Crime team members listed below.