A former Chief Marketing Officer (CMO) of an online car insurance company pleaded guilty in U.S. District Court to embezzling more than $10.2 million from his employer.
The 43-year-old man of Culver City, California, pleaded guilty to one count each of wire fraud and contempt of court. As part of his guilty plea, the former CMO agreed to pay more than $10.2 million in restitution.
According to court documents the former CMO entered into contracts from November 2021 through November 2022, with four vendors for marketing services. The 43 year old directed the vendors to send a portion of their contract proceeds to banks accounts in the names of business that he owned and controlled. Those diverted payments totaled more than $10.2 million. The Culver City, California man used the millions he stole to purchase a yacht, a Mercedes-Benz G550, an amphibious plane, luxury watches and more.
As a result of his fraud scheme, in February 2023, his former employer, the online car insurance company, sued the 43 year old man.
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Prevent This From Happening TO YOU!
Vendor fraud schemes can be tricky to catch as they come in various forms, though they all relate to the procurement process. Below are a few measures your company can take to help prevent vendor fraud:
- Regular vendor information verification: If there are any missing documents, get in touch with your vendor to investigate.
- KYS (Know Your Supplier) due diligence during the onboarding process is crucial to minimize fraud.
- Invoice matching: There are two-way, three-way, and four-way matching methods according to which types of documents are involved in the invoice matching process.
- Separation of responsibilities and regular rotations: As doing business with vendors requires both the entrance of the purchase information into the system and the approval of the transaction, carefully segregating these duties among different employees can minimize employee misconduct.
For the full list of measures your company can take click here.
Source: AIMultiple Research: https://research.aimultiple.com/vendor-fraud/
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Sincerely,
Michael Beranek
Berkley Crime
Experts focused on your protection. We deliver.
| National Practice Leader Michael Beranek (646) 522-7362 [email protected] | East Regional Manager/Commercial Crime Product Leader Matt McNamara (212) 497-3707 [email protected] |
| West Regional Manager Brian Platt (720) 979-1155 [email protected] | Renewal Team Leader Cheryl Yorio (860) 466-7379 [email protected] |