University Business - July/August 2011 - (Page 94)

Embezzlement Epidemic should not be delayed much longer, to minimize further losses, as well as preserve crucial potential evidence. The internal investigation will continue after the employee is removed. Our research into the embezzlement phenomenon indicates that many perpetrators use more than one scheme— sometimes several—to steal from their employer. Further, their thefts will have invariably spanned a duration longer than originally thought. A thorough investigation will therefore look into all aspects of the suspected perpetrator’s employment responsibilities and venture as far back as the time of their hiring. Any chance at recovery or restitution may also depend upon your “external” investigation. While it is true that many embezzlers spend their ill-gotten gains in such a way as to make restitution difficult— such as gambling, luxury travel, gifts to others, and purchases of consumables—many other types of assets can be identified and attached or seized. Homes, luxury vehicles, watercraft, other business interests, and luxury items such as art, jewelry and designer clothing may be worth seizing and auctioning off. Third-party beneficiaries of the theft—often family members such as spouses, children, parents, and others—are also potential sources for recovery. Bank accounts, retirement accounts, investments accounts, such as brokerage and mutual funds, can be identified through subpoena in either a civil or criminal proceeding. Most Common Embezzlement Schemes • Forging checks payable to cash, oneself, and/or to personal vendors • Pocketing cash receipts meant for deposit into institutional accounts • Issuing extra paychecks and/or bonus checks through payroll to oneself • Submitting fraudulent expense reports for reimbursement • Submitting fraudulent invoices from phony or legitimate vendors • Abusing institutional credit card accounts for personal use • Electronic transfers of institutional funds to personal accounts and/or vendors • Pilfering institutional equipment and/or inventory victim to the same type of theft. In general, the better the internal investigation and “packaging” of the evidence, the swifter the prosecutorial response. If federal or state prosecutors are uninterested due to the size of a given employee theft, civil action is always an option and still achieves some of the aforementioned goals. In either case, The better the internal investigation and “packaging” of expert legal counsel will be required throughout the process. The timing of a criminal referral must the evidence, the swifter the prosecutorial response. also be considered. Once it is made, any civil action will be stayed pending the outcome of the criminal proceedings—which often take time. In some cases, a judge can be convinced to issue orders that freeze While employee theft at America’s colleges and universities is all assets or call for forfeiture. too common these days, prudent steps, such as those outlined, can help minimize and mitigate the risk. Alerting the Authorities Finally, as alluded to above, I strongly recommend that all embezzlement cases ultimately be referred to authorities for prosecution. Failure to do so: 1) does not adequately punish the perpetrator; 2) provides no discouragement for potential future embezzlers; 3) arguably hurts employee morale and productivity; and 4) puts future employers of the perpetrator at risk for falling Christopher T. Marquet is chief executive officer of Marquet International, Ltd., a Boston-based investigative and security consulting firm. He can be reached at (617) 733-3304 or chris@marquetinternational.com. Marquet International publishes an annual Marquet Report on Embezzlement, which can be found at www.marquetinternational.com. A HORBURN SAN FRANCISCO LOS ANGELES A SSOCIATES ORLANDO RALEIGH-DURHAM HELPING DESIGNERS AND PLANNERS IMPLEMENT TODAY’S TECHNOLOGY www.TA-Inc.com/planning 94 | July/August 2011 universitybusiness.com http://www.marquetinternational.com http://www.TA-Inc.com/planning http://www.TA-Inc.com/planning http://www.universitybusiness.com

Table of Contents for the Digital Edition of University Business - July/August 2011

University Business - July/August 2011
Contents
Editor's Note
Ad Index
College Index
Behind the News
Sense of Place
Viewpoint
Financial Success
Money Matters
Community Colleges
Funding Capture
Models of Efficiency
Thwarting ID Thieves
Embezzlement Epidemic
What's New
End Note

University Business - July/August 2011