Barnes Dennig Director Chad Martin, who has earned the designation of Certified Fraud Examiner, was recently quoted by the Cincinnati Business Courier as an authority on fraud.

The newspaper article details a lawsuit by a local car dealership against a former payroll clerk who is alleged to have embezzled more than $6 million over a period of nine years. Martin pointed out that the case is unusual in that the clerk allegedly worked in concert with other employees to steal the money. Most fraud cases involve only one person and significantly less money.

“They find a hole in the internal control system and they know their supervisor is not looking,” Martin told the newspaper.

According to the Courier article, the former employee allegedly issued extra paychecks to employees who then cashed the checks and split the money with her. She hid her activity from management by generating fraudulent spreadsheets for them to review.

The case is a reminder of the importance of strong internal controls, as Martin indicated to the Courier:

Normally the type of scheme alleged at [the dealership] should not be possible if one person handles payroll, a supervisor reconciles payroll reports with the cash flowing out of the bank account, and a controller or CFO reviews their reports and monthly financials, Martin said.

Supervisors often get lax with such routine functions, because they can be boring, Martin said, “but it’s an important control.”

Leave a Reply

Your email address will not be published. Required fields are marked *