Case Studies

A company had an online account at Office Depot. Without authorization, the company bookkeeper opened up a credit card at the supply store. She used it to purchase gift cards and sold them on eBay. The bookkeeper was responsible for reconciling the month end statements, so no one at the company noticed. One year and $120,000 later, the scheme was discovered by accident when an Office Depot employee notified the company of the unusual pattern of purchasing only gift cards with the credit card and only supplies with the online account.

LESSON: In the ACFE survey more than one-third of the schemes were discovered by a tip from an employee, vendor, customer or other source. Fraud training for managers and employees, as well as an anonymous hotline, are effective and inexpensive ways to increase the likelihood that unethical behavior will be identified by a tip. What else could have been done to prevent this loss?