Employee Fraud – Misappropriation of Funds

Challenge:

A service business suspected that, while employed, one of their employees had misappropriated client funds for personal benefit, directing over $2 million to a fake company bank account though false invoices prepared for a vendor relating to work that was never performed.

Solution:

Williams Meaden & Moore was asked to conduct an independent forensic investigation into the allegations of employee dishonesty and fraud. Our team traced the funds and discovered that very little had been paid to actual work performed by the vendor or deposited into the vendor’s bank account. That left some $1.8 million covertly deposited into an account for an unincorporated shell company whose tradename was very similar to the vendor’s.

Our experts discovered that, over the span of approximately 2 years, the employee in question had submitted forged invoices to the company’s Accounts Payable department, along with convincing supporting documents, which included fictitious emails from clients. We also conducted interviews with other employees, and discovered the employee often instructed staff not to mail payments but instead offered to deliver these in person themselves.

Results:

In this joint assignment, our forensic report was used in the litigation process to freeze assets, obtain civil judgement, and assist the insurer with various recovery options.