A 46 year old Murfreesboro man was sentenced in federal court after embezzling more than $1 million from his employer, Lasko Products. He was sentenced to two years and 3 months in prison for operating a scheme that involved creating and falsifying purchase orders and invoices for equipment parts.
The former employee opened a number of post office boxes under fictitious business names that closely resembled legitimate vendors that already do business with Lasko. He also created bank accounts for each business and ultimately deposited the funds sent to these accounts into his personal account.
Prevent This From Happening to YOU!
One of the most recommended methods for an employer to help protect themselves against employees submitting a false invoice or purchase order for their own financial gain is to ensure that the company has adequate controls in place. Having adequate controls, such as the few listed below, will make it harder for an employee to commit fraud:
- Streamline your accounts payable workflow and include a separation of duties.
- Match each invoice to a purchase order and receipt of goods, this will reduce your chances of paying a fraudulent invoice. Most fraudsters won’t bother fabricating three different documents.
- Set a dollar amount and require that a second employee review invoices over that amount, for example $1,000.
- Cross check your vendors. Look up any new vendors and make sure that existing vendor information has not changed.
- Be aware of residential address or post-office box addresses – you can cross check on Google maps if suspicious.
- Automation!! Automation in the AP department gives you the tools you need to more effectively implement the above suggested controls for preventing invoice fraud.
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.
Sincerely,
Michael Beranek
Berkley Crime
Experts focused on your protection.We deliver.
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National Practice Leader |
Mid-West Regional Manager |
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East Regional Manager |
Amanda VanCauwenberge |
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Patricia Logan |
Everton Barrington, FLMI |
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Cheryl Yorio |
West Regional Manager |
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Alexander Doerflein |
Catherine Vilandre |
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Adam Pardi |
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