View Full Version : Embezzling

09-30-2011, 11:13 AM
A local group that's 'adopted' and is restoring a lighthouse keeper's house on an island here has found that their treasurer has 'misappropriated' perhaps hundreds of thousands of dollars of their donated funds. There's hope it will be recovered. http://www.cuckoldslight.org/News/PressReleases.aspx

At one time I worked with internal audit department people at a large corporation. The situations they dealt with regarding high level, white collar and management level employees were frightening, pathetic and alarming. Most often a little cheating started with falsifying expense reports: "No one will notice. I 'lost' the receipt. The company owes me anyway", and soon enough, because 'no one noticed' it becomes something that's okay to do, they'd rationalize: "Others probably do it, too." "No one cares, so it's okay." "They trust me and see things the way I do."

The next step was sometimes a purchase "that they'd pay right back". But the rationalizing would set in again and before they could stop and often VERY quickly,, they were in deep, deep **** which nothing could get them out of, despite (once caught!) all the begging and bargaining they could muster.

The lesson? Account for every nickel (nay, penny!) you take care of or owe people and don't fall down that slippery slope. It isn't one you can get off of at all easily.

Chris Coose
09-30-2011, 12:06 PM
I know of another absconding of funds of a similar organization down your way. They took care of it quietly.
Non profits, such as these can build in one piece of protection/oversight pretty cheeply and it often gets overlooked.

Bill Fisher
09-30-2011, 01:18 PM
I'm Treasurer for our Town's VFD. The company Bonds me for whatever the assets are (because it changes decade to decade the Bonding worth is changed to match). I am always surprised that this kind of stuff keeps happening in this day and age.


Monkey Butler
09-30-2011, 01:51 PM
I worked for a small company where a person in charge of the books was caught "borrowing" from the cash drawer and "accidentally" charging personal items on the company's account. This person was friendly with the owner and so it was dealt with quietly.

After the company went out of business it was found that this person had written checks to a university that ultimately were paying the tuition for one of her children. She promised to pay it back and pleaded that she had only done it because she was desperate. It was dealt with quietly.

That was over 10 years ago.

At some point I learned that this person had purchased a lake front vacation home and a new boat which seemed well beyond her means.

Then a former co-worker who lived in the same town as this person emailed me this:


I wish it hadn't been handled so quietly.

S.V. Airlie
09-30-2011, 02:08 PM
Dave..I can relate. Small nonprofits do not seem to have the same overseeing of the finances. It happens or happened more times than you think. In my role responsible for a *nonprofit.I hated seeing it then, still do. The other day, Ihad lunch with my brother who was bemoaning the fact that the club that had functioned for 100 yrs. was not only broke but some of the board members were not that judicious with the club's funds. Not sure about the actual embezzlement, but hundreds of thousands of dollars in debt because of poor borrowing etc...The list goes on.Those who manage small nonprofits should be carefully watched. No payment without a receipt first is one obvious NONO. One loses the receipt, tough bananas. I never gave out any payments without a receipt at least. On the other side, once someone gets into the till, it is hard to break them of continuing that practice especially if they get away with it once or twice. Human nature? That is what I would guess but don't like saying that.

09-30-2011, 03:04 PM
Yacht clubs often seem vulnerable to this type of thing.
There are checks and balances in place to prevent someone from blatantly pocketing money, but fake billing scams, kickbacks with a contractor, etc seem to sometimes go undetected.

S.V. Airlie
09-30-2011, 03:48 PM
Shyte happens. A few months ago, I was billed for several expensive drinks at my club. I did not drink them..I think they were martinis. Nor did I order them. I do not know who did, but when I called the office, the sec. said.."You are right. I wondered about that. you don't drink martinis". Taken off. You would be surprised at those people who do not check the bills. They just pay them. Easy to slip in a few extra charges.Mine were deleted obviously.

09-30-2011, 04:21 PM
Ran such a tight ship everyone hated her because she held up orders and made everyone look like they were stealing to the boss. We lost business because of her because she would hold up next day air orders if the T's were not crossed. Boss though she was super slick though.The opposite extreme! There's a marina in Noank with a manager who treats every employee as an ex-con.
A mechanic or rigger who has been there 6 years needs to get permission and fill out forms just to change a light-bulb. A customer spills something on the fuel dock? Spend the next 20 minutes documenting it in the office before you can get some additional rags to clean it up.

09-30-2011, 04:36 PM
The tendency for higher mgt to 'deal with things quietly' ("I know this guy's wife and kids, for heaven's sake. They're members of our golf club!") was a grinding dilemma for internal audit staff people I worked with. It was dispiriting to see the double standards applied. Some told of cases where they'd been told to go through expense reports like Nixon lackeys went through IRS files, in order to bring pressure to bear against someone they wanted to quit.

09-30-2011, 06:01 PM
Do everything in the clear light of day. In our little club, every expense is voted on by the board. It may not work in a more active organization, but that and independent validation of the bank account with monthly reporting by the treasurer greatly reduces room for theft.

10-01-2011, 04:36 PM
Now if we could get government to do just that. :)

The sad truth is, I think they do. The problem is the elected leaders are not taking responsibility.

Bruce Hooke
10-01-2011, 06:59 PM
Do everything in the clear light of day. In our little club, every expense is voted on by the board. It may not work in a more active organization, but that and independent validation of the bank account with monthly reporting by the treasurer greatly reduces room for theft.Now if we could get government to do just that. :)

In anything other than a very small organization that only makes a few payments every month I'd call the board (or "government") voting on every expense a good sign of an organization that is not functioning well. There should be checks to try to prevent embezzlement but voting on every expense is a waste of the boards time and is likely to distract the board from more important issues that are supposed to be their responsibility, such as budgeting and long-range planning. However, in an organization that only makes a few expenditures a month it can make perfect sense to vote on each expense.

10-01-2011, 07:36 PM
I have completed and APPROVED thousands of expense reports ... and I have ALWAYS balanced to the penny ... WITH receipts ...

If NO receipts, I was not reimbursed ... not DID I reimburse!

Pretty simple to me ... not sure why some folks/companies have an issue with it!

(Actually, I do know why there are certain problems ... but it is only due to ownership/some management not truly paying attention ... or caring)