FraudCaster

Grover Michael Cowan, a treatment plan coordinator for a Pottstown, PA dental group, took blank checks from patients and wrote his name in the payee line then cashed them. He stole more than $100,000 over an eleven month period before he was caught. Cowan will spend two to seven years in jail.

Victoria “Vickie” Lee Wafford, a devoted dental office manager for 15 years, embezzled $1.6 million over a seven year span. She had a signature stamp from her employer and her own private stash of blank checks. Using the signature stamp, she signed over 1000 checks then cooked the books to cover her trail. Wafford will spend eight years in prison.

Who’s minding your till? Do you have the right safeguards in place to protect yourself and your business from employee dishonesty?

According to the Corporate Fraud Handbook¹ there are three “least implemented” but “most effective” anti-fraud measures that reduce the cost and duration of fraud schemes.

1) Surprise audits. Hire an outside auditing firm on occasion to audit your books. Don’t announce these audits or schedule them regularly. Bring the auditors in randomly. These surprise audits provide a deterrent to would-be fraudsters.

2) Fraud Awareness and Ethics training. The majority of embezzlement schemes are committed by first-time offenders that find themselves ensnared in the fraud triangle. Helping employees become aware of the danger signs of fraud will help reduce the likelihood of someone succumbing to the temptations set before them.

3) Anonymous Reporting Mechanisms. Have a system in place that allows employees to anonymously report suspicions of fraud.

There are other ways to reduce your risks as well. Stay tuned to future posts on how to protect your business.

Corporate Fraud Handbook by Joseph T. Wells published by John Wiley & Sons, Inc. 2007