Bookkeeping Crimes: Just One of the Good Reasons We Recommend the Segregation of Duties

Examples of What Happens When Businesses Rely too Heavily on their “Trusted” Bookkeeper

(See Below for Tips to Prevent this from Happening to Your Business)

CrimePublicationLocationAmount of Money StolenArticle Published
NCI accuses employee of embezzling millionsWashington Biz JournalsWashington, DC$18,000,0002017/01
Ex-bookkeeper sentenced to prisonnewsandtribune.comJeffersonville, Indiana$105,0002016/12
Bookkeeper pleads guilty to stealing $1 million from employer for vacations, new carsDaily AdvanceMoyock, North Carolina$1,000,0002016/12
Former bookkeeper denies stealing from Midland Printingbillingsgazette.comMidway, Montana$170,6932016/12
Former School Bookkeeper Arrestedidahopress.comHomedale, Idaho$11,0002016/12
Bookkeeper accused of taking $14K from Georgia schoolAJC.comTalmo, Georgia$14,0002016/12
Bookkeeper accused in $300k in payroll schemeindystar.comIndianapolis, Indiana$302,6012016/12
Ex-bookkeeper gets prison for theft from Londonderry employerunionleader.comBrentwood, New Hampshire$80,0002016/12
Woman gets 90 days jail time in embezzlementroanoke.comTroutville, Virginia$10,0002016/12
Former high school bookkeeper accused of stealing more than $10,000kentucky.comLexington, Kentucky$11,7872016/11
Lambertville woman charged with cooking the books at cake shopmycentraljersey.comSomervile, New Jersey$112,0002016/11
Bookkeeper arrested in theft of nearly $300,000 from Fresno fruit companyfresnobee.comFresno, California$287,0002016/11
Mound woman charged with swindling 2 organizationskare11.comSt. Paul, Minnesota$200,0002016/11
Former Iowa credit union bookkeeper pleads to $2.5M embezzlementCredit Union TimesChariton, Iowa$2,500,0002016/11
Call 6: Bookkeeper to learn fate in $5.5M embezzlementtheindychannel.comIndianapolis, Indiana$5,500,0002016/11
YMCA embezzler fradulently gave land awaytdn.comLongview, Washington$500,0002016/11
Ex-bookkeeper gets jail for theft of $160k delcotimes.comPhiladelphia, Pennsylvania$160,0002016/11
Former credit union bookkeeper gets 6 years for embezzlement kcrg.comChariton, Iowa$2,500,0002016/11
Half Moon Bay: Bookkeeper arrested on embezzlement grand theft chargesmercurynews.comSan Jose, California$55,0002016/11
Travel company fraudster set to face jail from $350,000 rip-offheraldsun.com.auMelbourne, Australia$347,2262016/11
Former bookkeeper for non-profit health centers sentenced for $116,000 theftal.comCullman, Alabama$116,0002016/10
Nevada woman arrested in Loomis business embezzlement casesacbee.comSacramento, California$65,0002016/10
Former bookkeeper guilty of embezzling funds from Boys and Girls Clubnwitimes.comCrown Point, Indiana$33,0002016/10
Police: Florida church bookkeeper steals thousands from breast cancer charityboston.comBoston, Massachusetts$100,0002016/10
Businessman from Taney County gets 366-day prison term for not paying taxesky3.comSpringfield, Missouri$503,0002016/10
Former School Bookkeeper Arrested For Theftnewschannel5.comDunlap, Tennessee$18,3222016/10
Former One Region bookkeeper charged with another theftchicago TribuneChicago, Illinois$33,0002016/10
Ex-Bookkeeper Sentenced for Embezzling From UnionNECNBoston, Massachusetts$150,0002016/10
Ex-bookkeeper at York County school facing felony embezzlement chargesThe Washington TimesReno, Nevada2016/10
Former Christian school clerk accused of $160,000 theftradioiowa.comDes Moines, Iowa$160,0002016/10
Former bookkeeper charged with embezlling from employersurfline.comMaui, Hawaii$400,0002016/10
Bookkeeper charged with forgery, theft from business, police saymyrtlebeachonline.comMyrtle Beach, South Carolina$10,0002016/10
State bookkeeper pleads guilty to theftcourierpostonline.comTrenton, New Jersey$296,0002016/09
Woman enters guilty plea to taking $437,000 from employerwreg.comMillington, Tennessee$437,8672016/09
Woman wanted in embezzlement case turns herself in to authoritieswowt.comChalco Hills, California$126,0002016/09
Police: Everett bookkeeper embezzled $128k from company, total could be higherkomonews.comEverett, Washington$128,0002016/09
Bookkeeper charged with embezzling $745,000 from Richland doctortri-cityherald.comKennewick, Washington$744,4962016/09
Bookkeeper stole $300K from state agency that aids disabled, AG saysnewsday.comLong Island, New York$300,0002016/09
Police: Carrollton church bookkeeper stole $279,000wfaa.comCarrolton, Texas$279,0002016/09
Former Garfield county bookkeeper resentenced for embezzlementnbc11news.comGlenwood Springs, Colorado$440,0002016/09
Redding woman admits to stealing $250K + From Employer: DApatch.comRedding, Connecticut$250,0002016/09
Georgetown woman charged with embezzling from employergeorgetown.wickedlocal.comGeorgetown, Massachusetts$60,0002016/09
Suit claims former bookkeeper stole $600k from First Presbyterian theleafchronicle.comClarksville, Tennessee$600,0002016/09
Augusta woman who stole more than $1.7 million pleads guilty to RICOchronicle.augusta.comAugusta, Georgia$1,732,2962016/08
Elementary school employee facing embezzlement chargeswcti12.comNew Bern, North Carolina$12,0002016/08
Manhattan bookkeeper embezzled $800G, used part of it to pay $80G penalty for ripping off previous employerNew York DailyNew York, New York$800,0002016/08
Accounting firm employee charged with forging checksgreatfallstribune.comGreat Falls Tribune, Montana$296,8492016/08
Metairie bookkeeper accused of stealing over $51k from Krewe of Pygmalion bingo fundswgno.comMetairie, Louisiana$51,8302016/08
Former bookkeeper facing 49 charges of Las Vegas theft and forgeryLas Vegas Review-JournalLas Vegas, Nevada$201,0962016/08
Reno landscaper, mother bookkeper sentenced for tax crimeswavy.comYork County, Virginia2016/08
Ex-bookkeeper faces sentencingktvz.comBend, Oregon$1,000,0002016/08
Accused of embezzling big bucks, bookkeeper takes pleasilive.comStaten Island, New York$75,0002016/08
Ex-Prattville school bookkeeper faces forgery, theft chargesmontgomeryadvertiser.comPrattville, Alabama$2,5642016/08
KSP: Jessamine Co. bookkeeper embezzled more than $1M from company.wkyt.comJessamine County, Kentucky$1,000,0002016/07
Clay Marzo's Bookkeeper allegedly stole over $400ksfexaminer.comSan Francisco, California$400,0002016/07
Lawrence County woman sentenced for stealing from nursing home residentsbellinghamherald.comBellingham, Washington$298, 877.952016/07
Allentown couple charged with stealing $1.4M from employerwfmz.comAllentown, Pennsylvania$1,436,0372016/07
Agape World broker gets 78-month sentencelibn.comLong Island, New York$60,000,0002016/07
Plea: Bookkeper stole $247,000 from Wichita steel companykansas.comWichita, Kansas$247,0002016/07
Former CU Bookkeeper Sentenced for $2.5M Embezzlementketv.comDes Moines, Iowa$2,500,0002016/07
Former bookkeeper indicted in connection with million-dollar schememrt.comMidland, Texas$2,000,0002016/07
Former Border Station employee pleads guilty to evasion of income tax assessmentwavy.comNorfolk, Virginia$966,0002016/07
Credit Union Bookkeeper steals $2.4M Over 37 Yearscutimes.comChariton, Iowa$2,400,0002016/07
Former Hacienda bookkeeper accused of check fraud embezzlementkesq.comPalm Springs, California$26,2802016/06
Bookkeeper accused of giving self raise, spending more than $100,000grandforksherald.comCrookston, North Dakota$100,0002016/06
Twin Falls Police Arrest California Fugitive Accused of Embezzling Public Fundsmagicvalley.comTwin Falls, California$8,0002016/06
Police: Janesville school bookkeeper steals more than $300Kkansascity.comKansas City, Missouri$300,0002016/06
Women admits stealing nearly $31k from soccer clubnwitimes.comValparaiso, Indiana$31,0002016/06
Police: Delray Beach business bookkeeper stole $60,000 in checksPalm Beach PostPalm Beach, Florida$63,4402016/06
Former Jeffersonville business bookkeeper sentenced to prisonmohavedailynews.comBullhead City, Arizona$105,0002016/06
Law firm's former bookkeeper pleads guilty to embezzlementportcitydaily.comWilmington, North Carolina$153,0002016/06
Statesville woman charged with embezzlementstatesville.comStatesvill, North Carolina$16,0002016/06
Former bookkeeper charged with embezzling from Botetourt churchsteamboattoday.comSteamboat Springs, Colorado$10,0002016/06
Ex-bookkeeper pleads guilty to embezzling $83k from local hardware stores.recordonline.comMiddletown, New York$83,4362016/06
ky3.comJefferson City, Missouri2016/05
Fayetteville woman accused of stealing more than $3M while working as a bookkeeperwhnt.comNashville, Tennessee$3,000,0002016/05
Accused Colorado Springs embezzler headed to trialgazette.comColorado Springs, Colorado$40,0002016/05
Tom Watson's ex-wife files suit over $4 million embezzlement from financial management companyThe Kansas City StarKansas City, Missouri$4,000,0002016/05
Ex-bookkeeper gets 8 years for embezzling $1M from La Marque businesschron.comHouston, Texas$979,0002016/05
Haines City bookkeeper charged with theft of $140ktheledger.comHaines City, Florida$140,0002016/05
Bookkeeper admits to stealing $1.3M from his coma-stricken bossNew York DailyNew York, New York$1,300,0002016/05
Fort Pierce bookkeeper charged with stealing $61,000 from law firmTCPALMPort St. Lucie, Florida$61,0002016/05
Bookkeeper sentenced for stealing from comedian Joe PiscopoNJ.comMorristown, New Jersey$234,5002016/05
Ex-bookkeeper charged with stealing over $150,000 from Lexington Hearing and Speech Centerwkyt.comLexington, Kentucky$150,0002016/05
Okeechobee eatery owner betrayed by friendOkeechobee NewsOkeechobee, Florida$301,1562016/05
Longtime bookkeeper accused of stealing over $60,000dl-online.comDetroit Lakes, Minnesota$62,4082016/05
Woman pleads guilty in Salina embezzlement casewibw.comSalina, Kansas$109,0002016/05
Woman pleads guilty to stealing from jobAmericanpress.comLake Charles, LA$235,1562016/05
Goffstown woman gets 27 months in $1 million theft from employerunionleader.comConcord, New Hampshire$1,000,0002016/05
Former Bookkeeper to plead guilty to stealing $165k from charitynecn.comBurlington, Vermont$165,0002016/04
Homedale High bookkeeper sentenced for prior embezzlement710keel.comShreveport, Louisiana$11,0002016/04
Bookkeeper in Elmont Inflated her paychecknewsday.comLong Island, New York$17,0002016/04
Covington woman stole $10,172 from Metairie non-profit, JPSO saysNola.comNew Orleans, Louisiana$10,1722016/04
Former St. Vincent de Paul bookkeeper sentenced to almost 4 years for fraudthenewstribune.comTacoma, Washington$543,0002016/04
San Tan Valley-area bookkeeper gets 5-year prison term for stealing $240k from Gilbert contractorAZCentralSan Tan Valley, Arizona$240,0002016/04
Former Bookkeeper Sentenced to 5 years for Stealing from Software Companykstp.comSaint Paul, Minnesota$700,0002016/04
Triad man, woman accused of stealing $3 million from employerjournalnow.comWinston-Salem, North Carolina$3,000,0002016/04
Paso Robles Bookkeeper sentenced to prison for embezzling $700kSyracuse.comSyracuse, New York$755,0002016/04
DA: Woman steals $755,000 from employer to invest in 6 houses in Syracusesanluisobispo.comSan Luis Obispo, California$755,0002016/04
South Yuba Club bookkeeper arrested on embezzle charges theunion.comGrass Valley, California$60,0002016/04
Bookkeeper blames gambling addiction for $780,000 theft from NT Aboriginal organisationsabc.net.auAustralia$780,0002016/04
Former bookkeeper sentenced for embezzling thousands from veterans serviceswtnh.comNew Haven, Connecticut$794,768.472016/04
N.J. woman allegedly embezzled $925k from employer, report saysnj.comMount Holly, New Jersey$925,0002016/04
School employee accused of embezzling more than $200,000Mlive.comMuskegon, Michigan$208,0002016/04
Diocese: Austin woman stole $200k from churchpostbulletin.comRochester, Minnesota$199,771.292016/04
Local woman pleads guilty to embezzlement; sentenced to prisonweartv.comPensacola, Florida$1,000,0002016/04
Bookkeeper accused of stealing from 2 dentists News 12 Long IslandLong Island, New York$56,0002016/03
Sisters bookkeeper jailed, accused of embezzling $430,000ktvz.comBend, Oregon$430,0002016/03
Judge: Ex- Girlfriend of Skaneatleles businessman 'extremely' after stealing $140,000Syracuse.comSyracuse, New York$140,0002016/03
Former school district bookkeeper admits to embezzlementWITN.comGreenville, North Carolina$15,823.802016/03
Ex-bookkeeper get year in jail for embezzling from unionPalm Beach PostPalm Beach, Florida$100,0002016/03
Moscow ice rink bookkeeper accused of embezzling $30,000ktvb.comMoscow, Idaho$30,0002016/03
Former bookkeeper sentenced to five years for theftcvbj.bizStockton, California$236,000.002016/03
Brooklyn bookkeeper charged with stealing more than $750G from property management companyNew York DailyBrooklyn, New York$766,0002016/02
Pinckyneyville, Ill., fire district bookkeeper stole $450,000 Stltoday.comPinckneyville, Illinois$450,0002016/02
Gwyneth Paltrow's Trainer Robbed of $70k by Bookkeeper, Police SayDNAinfo New YorkTribeca, New York$69,9982016/02
Ex-Land of Make Believe bookkeeper stole $49k, police saylehighvalleylive.comEast Stroudsburg, Pennsylvania$49,0002016/02
Embezzlers' double lives of deception leave deep woundsMlive.comMuskegon, Michigan$2,000,0002016/02
Hamburg bookkeeper admits embezzling $263,000 for gambling habitThe Buffalo NewsBuffalo, New York$263,1352016/02
Worker Accused of Taking Nearly Half a Million Dollarswnep.comScranton, Pennsylvania$500,0002016/02
Luck bookkeeper charged with fraud, tax crimesSuperiortelegram.comFrederic, Wisconsin$130,0002016/02
Ex-bookkeeper admits $170k theft from comedian Joe Piscopodailyrecord.comMorristown, New Jersey$170,8052016/02
Captain’s Table Bookkeeper IndictedWKRGMobile, Alabama$174,0002016/01
Police: Ex-bookkeeper accused of stealing from Park Ridge companyChicago TribuneChicago, Illinois$86,2002016/01
Former bookkeeper accused of stealing from schoolFox 11Manitowoc, Wisconsin$81,138.642016/01
DA: Office manager stole $300,000 to go on gambling tripsNJ.comTrenton, New Jersey$300,0002016/01
Caddo bookkeeper arrested for theftShreveport TimesNew Orleans, Louisiana$168,0002016/01
Woman is guilty of embezzlement from Tonganoxie fertilizer companyChannel3000.comJanesville, Wisconsin$300,0002016/01
Geelong court: Thieving Curlewis bookkeeper jailed for three monthsGeelong AdvertiserCurlewis, Australia$6,3122016/01
Bend co. bookkeeper accused of embezzling nearly $1 millionFox 9Golden Valley, Minnesota$1,000,0002016/01
Bethesda Bookkeeper Sentenced for Stealing $414,000 from EmployerBethesda MagazineBethesda, Maryland$414,0002016/01
West Chester bookkeeper again faces theft chargesDaily LocalWest Chester, Pennsylvania$22,3002016/01
Bookkeeper stole almost $22,000 from Kenner business in 1 month, police sayNola.comNew Orleans, Louisiana$22,0002016/01
Cave Creek bookkeeper sentenced in $1.4 million tax-refund fraud caseAZCentralCave Creek, Arizona$1,400,0002016/01
Former bookkeeper sentenced for stealing money from South Florida businessLocal 10Fort Lauderdale, Florida$300,0002016/01
Syracuse bookkeeper accused of stealing $100,000 in 2 years from equipment co.Syracuse.comSyracuse, New York$100,7822016/01
Denham Springs bookkeeper pleads guilty to embezzling more than $600,000Nola.comNew Orleans, Louisiana$600,0002016/01
Bookkeeper gets prison, $300,000 bill for stealing from Bellingham restaurants$145,290,246

TIPS ON FRAUD PREVENTION

STRENGTHEN INTERNAL CONTROLS AND RISK MANAGEMENT

Implement Adequate Internal Controls

    • Know it Can Happen To You – “I trust my bookkeeper” is heard thousands of times after most cases of embezzlement.
    • Trust But Verify – It is okay to trust your employees, but an adequate control structure will help you verify that what you think is happening is actually happening. One-third of business failures occur as a result of fraud.
    • Run All Cash Receipts Through a Business Bank Account – While it may seem easier to utilize cash out of the drawer to pay for petty cash, this process create an environment where funds can easily be misdirected.
    • Create Segregation of Duties – Make sure you have different people setting up and approving new vendors, approving bills to be paid, writing checks/initiating ACH’s, approving new employees, entering new employees, approving pay rates, changing pay rates, processing payroll, reconciling the bank accounts and credit card accounts.
    • Review Bank Statements and Credit Card Statements – In the paper based world it is recommended that business owners receive the unopened bank statements directly.  In the electronic world, business owners can view bank records online monthly and set-up alerts to notify them of any large or unusual transactions.
    • Have a Third Party Accounting Firm Review Your Books Routinely – This routine review can serve as a significant deterrent to your employees.
    • Understand Your Numbers – Reviewing your financial results as compared to budget monthly. When you have financial clarity, it is much easier to identify unexpected expenses like though incurred as a result of fraud by a bookkeeper.
    • Manage Your Books on an Accrual Basis – In order to eliminate the variations that occur based on the cash basis of accounting (recording revenue when cash is received and expenses when checks are cut), utilize the accrual basis of accounting (revenue when revenue when earned and expenses when incurred).  This will help you identify unexpected results.
    • Balance Your Balance Sheet Monthly – While most understand the importance of reconciling your bank accounts monthly, you must also reconcile all your balance sheet accounts on a monthly basis. It is important to make sure that all transactions on the balance sheet are appropriate, so these transactions do not mask the results presented in the income statement.
    • Perform In-depth Background Checks on Finance and Accounting Staff – All staff that are involved with managing the books and records of a business need to be properly screened, including employment history, credit checks, address history, bankruptcy history, and criminal and civil court records. Many bookkeepers caught in a fraud are not prosecuted, and as a result they move on to their next victim.  A full background screen will help you understand whether an prospective employee fits into a high risk or low risk category.
    • Ensure Books and Records are Securely Stored – Make sure you close each financial period and that transactions from the past can not be altered. This includes locking up records in the accounting software and where stored electronically and in paper.
    • Eliminate or Lock Up Check Stock – By utilizing electronic payment systems, it is harder to destroy or hide important documents. When paper is used, make sure all check stock is accounted for by management.

 

While it is impossible to eliminate all risks associated with internal and external fraud, the above internal control steps will significantly reduce the risk that fraud will occur at your organization. In addition to these steps, organizations should implement an adequate Risk Management Program as discussed below:

 

Implement a Risk Management Program

  • Set the Tone at the Top – Senior management should make it clear through their words and actions that all forms of dishonesty are not tolerated.
  • Protect Against Downside Risk – Review your insurance coverage annually to ensure you are protected against internal thefts and external thefts.
  • Hire Protected Vendors – Make sure your accounting firm and bookkeeping firm is adequately bonded.
  • Work with Vendors with High Integrity – Interview your bookkeeping firm or accounting firm about their hiring practices. Make sure they are adequately screening their staff that will be working on your books and records.