Introduction
Responsibility and sense of duty are two of the main tenants that a company managing staff member should have. In order to have a better, clearer, picture of the situation we need to describe it. This report will demonstrate that we are dealing with an orchestrated criminal activity that is described by law as fraud. It is an intentional fraudulent activity that the two mentioned persons have been consciously and intentionally planning and executing during 2007. Fraud is defined as “an intentional deception made for personal gain or to damage another individual. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and is also a civil law violation” (Cohen, 2006).
Mr. Bob Smith, as the Associate Director of Purchasing Department, had the power to issue corporate purchases as prescribed in his labor duties. This ability was given to him on the condition to use those purchases for the benefit of the company. Lakes, Inc. maintains a physical asset database in which all non-disposable items with a purchase price of $1,000 or more are recorded. Each item is assigned a unique ID number and barcode label, which are used to track the item. His administrative assistant, Ms. Mary Bad, had the duty to record on file all the transactions along with their original invoices and copies.
Below we will describe in detail what happened.
The chronological narration of the case: the reimbursement fraudulent scheme
This report will demonstrate how Mr. Bob Smith, the Associate Director of Purchasing of the company, along with his administrative assistant, Ms. Mary Bad, were submitting false expense claims. We determined that up to $8,795.60 in false invoices had been submitted for reimbursement through the purchasing department.
During the last six months, records show that both partners in fraud have been using the corporate purchase card for personal purposes. Mr. Ted Jones, the manager of the local Sterns Company, the vendor, provided invoices demonstrating that there were five purchases made by the Purchasing Department of our company (authorized by Mr. Smith) in the last six months. The initial two were made by Mr. Smith himself, and the additional three by his administrative assistant. Records of our company’s Purchasing department show that there exist file copies which matched the original invoices presented by Mr. Jones. The difference was that the invoice number, date, and amount were different as to what was purchased. The common thing was that both in the original invoices and our company’s records, the purchases were made with the same purchase card and approved by Mr. Smith. The other major professional deficiency was that in our Purchasing Department we found only copies of invoices, no originals. Furthermore, these copies had none of the items contained in the original invoices. Company record copies show that the purchases were made for computer systems and a server needed for specific departments of the company. Instead, we find in the original invoices that (in chronological order) a notebook computer, a digital camera, a digital camcorder, a GPS system, and a home theater system, was purchased instead.
Mr. Jones also testified that for these five purchases he had been requested directly by Mr. Smith that the purchase be held for pick up by either him or his administrative assistant, Ms. Mary Bad. That was deviance to all the other company’s purchases.
Based on the facts mentioned above, we are legit to conclude that the two individuals mentioned have deliberately orchestrated and committed fraud against the company by inflicting it a financial loss of more than $8,000.
References
Cohen, F. (2006) Frauds, Spies, and Lies – and How to Defeat Them. ASP Press.