The Enemy Within: Employee Embezzlement and the Law Firm
| Jurisdiction | United States,Federal |
| Citation | Vol. 25 No. 11 Pg. 101 |
| Pages | 101 |
| Publication year | 1996 |
1996, November, Pg. 101. The Enemy Within: Employee Embezzlement and the Law Firm
Joslyn Beancounter(fn1) worked as a bookkeeper for the law firm for four years. On the surface, she seemed a very loyal and dedicated employee. Joslyn was a meek and shy person who kept to herself and rarely spoke to anyone about matters other than business. When she did speak, it was often with pride about her three daughters. Joslyn often worked overtime, without complaining. Over time, the firm increased her responsibilities. She became solely responsible for accounts payable and the firm's suspense account, an account used to refund client overpayments.
Aroutine review of the suspense account revealed a suspicious entry: a refund check issued in the name of someone who did not appear on the firm's client list. Further examination revealed more suspicious entries.
The firm's manager, Mary Cap-Able, wanted to compare the check register in the computer against the names of the payees on the checks. Several original checks---indeed, the suspicious ones the office manager wanted to verify---were missing from the bank statements.
Mary ordered copies of these checks from the law firm's bank. When copies of the checks arrived, the manager discovered that the payees of the checks did not match the names of the payees in the computer. Further investigation revealed that many of the suspicious checks had been deposited in a single bank account in Last Chance National Bank. Others of the suspicious checks obviously were written to pay credit card bills---various VISA and MasterCard accounts. One of the real payees was Johnny's Funeral Home.
Mary remembered that about one year before the date of the review, about the time that the check had been written to the funeral home, Joslyn Beancounter's father died. Joslyn took a few days off to attend the funeral in Smallsville, Ohio. Mary called information in Smallsville and obtained a number for Johnny's Funeral Home. She spoke to Johnny, who remembered the funeral of Joslyn's father about a year earlier.
The firm commissioned an audit by CPAs. The auditors---at a cost of $15,000--- were able to trace most of the proceeds to six credit card accounts and the one bank account---all belonging to Joslyn Bean-counter. A total of 130 unauthorized checks were involved. Joslyn stole more than $250,000 from the law firm over a three-year period. Joslyn was...
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