THE DOUBLE DIPPER: An employee tip uncovers a multimillion-dollar travel and expense scam.

Author:Wahlstrom, Grant
Position:Fraud Findings

Robert Shull and Alysa Cayden, the forensic audit team at Midnight Sun Inc. (MSI), sat with Justin Planter, a regional sales manager at the solar power company, as he rolled his eyes and made condescending faces. MSI's procurement department forwarded Planter's travel and expense (T&E) reports to Cathy Francis, the human resources manager, after an employee noted that spending was not consistent with the company's T&E policy. Francis reviewed the reports and was concerned that there was a greater pattern of abuse, so she requested that Shull and Cayden examine his T&E reports.

Sitting next to Planter was his boss, Thomas Cooper, a veteran regional manager with more than 25 years of experience with MSI. During the interview, Planter admitted to purchasing a personal cell phone using his company credit card. In addition, he frequently used the card for alleged business meetings at establishments that bordered on adult entertainment. Much to his surprise, Planter's employment was subsequently terminated.

After the interview, Shull and Cayden felt something was amiss. Cooper approved all of Planter's T&E reports but was not suspicious of any of his spending. Also, they noticed that Cooper's statements were inconsistent, requiring him to revise them on several occasions.

After his firing, Planter contacted MSI's CEO, James Spicolli, and explained how Cooper allowed his management team members to use their corporate credit cards to dine out, make personal purchases, and charge mileage for business travel despite being reimbursed through another program. Planter also claimed that Cooper attended many of the dinners and instructed him to pay the bill so that he could approve the expenditure, thus avoiding the scrutiny of Cooper's manager. He also alleged that Cooper coached him before the interview on what to say and promised that there would be no significant disciplinary action.

To review Planter's allegations, Shull and Cayden obtained all T&E reports for Cooper and his management team. Data analytics compared the company policy against spending. One area of focus was cash reimbursements for expenses below $25, the minimum amount requiring receipts to be submitted.

The results were shocking. Cooper's team members used their corporate credit cards for expenses well outside the T&E policy. Furthermore, Cooper approved every expense report submitted to him. They found numerous abuses of travel expenses:

>> Managers split expenses to stay below the...

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