...2012 Abstract The paper describes the meaning of fraud and embezzlement; the types of crimes committed in such cases and the penalties that are faced with the various types of theft that involve public funds. Examples of cases are discussed to help give the reader an idea of the situations that arise and the consequences that come along with them. There also is a brief explanation of what can be done to help prevent these crimes throughout small and large companies. Introduction Charges of public corruption can destroy a person's career and public image. White-collar crimes are abuses of the criminal law by an individual of significant financial and social status in the progression of their employment. It is a non-violent crime that is used for financial gain to utilize fraud by people who have exceptional procedural or specialized understanding of business or government, regardless of their employment. Embezzlement is one of the many forms of white collar crimes. The many forms of embezzlement and fraud include; larceny theft, mail fraud, lapping, etc. (Example of Embezzlements, 2006) states, “In the simplest situation, cash is received and the employee merely pockets it without recording the transaction. This type of theft is difficult to prevent or detect if the transaction is a cash sale, and no subsequent entry is necessary in receipt or accounts receivable records. Embezzlement and fraud Embezzlement is misappropriating public or trust funds that have been......
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City of Dixon Embezzlement
...Auditing Research Paper City of Dixon Embezzlement 11/6/2012 ACC 235 Growing up in a small town, Rita Crundwell spent most of her life very close to the town of Dixon. She was from a well brought up, hard working family and was one of six children. Her family was very interested in horses and would participate in horse shows while the children were growing up. Rita was an honors student while in high school, landing in the top 20 out of 300 students who were in the National Honors Society (Smith, 2012). Although she graduated high school, Rita did not continue her education. The reason being that while in high school, she landed a part-time job at City Hall. Darlene Herzog, who was Dixon’s comptroller at the time, convinced Rita to stay with City Hall because she caught onto everything so quickly and was a great asset to the team. Through her hard work, Rita was able to advance herself, moving from secretary and then to treasurer. After 12 years of working with City Hall, in 1983, she replaced Darlene Herzog, who had to retire due to health problems. This placed Rita at the top of the financial department of City Hall, being named both the treasurer and the comptroller. It was the start of what would eventually lead her to be taken out of her office in handcuffs almost 30 years later. Dixon is a small town in the northern part of Illinois. It has a population of nearly 16,000 and was never rolling around in the excess money the town owned. In......
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White Collar Crime
...happen during the course of work while being as part of the employment duties of the criminal. One great example of white-collar crime is embezzlement in which is defined by The Federal Bureau of Investigation (FBI) as the “misappropriation or misapplication of money or property entrusted to one’s care, custody, or control” (FBI, 2001). In other words, embezzlement is type of fraud where a person illegally takes money from an account he or she has given legal access to ranging from high-end bank employees to a cashier or waiter who pockets the money given from a customer to pay a check. This paper will discuss how embezzlement happens, some of the costs and statistics related to embezzlement in the United States, and, lastly, some of the current efforts companies and federal agencies are doing in order to stop or prevent embezzlement. Embezzlement is a non-violent crime; however, it is a serious crime that has much impact on its victims. A very important feature to distinguish embezzlement from other theft related crimes is the fact that some trust was violated between the owner of the money or property and the criminal who has stolen it. Embezzlers are “trust violators” who deprive their victims of economic benefits and of the ability to trust others financially (Crime and Justice, 1971: 247). One of the most common forms of embezzlement is employee theft. Employee theft is one of the most predominant and costly problems faced by today’s business organizations. The......
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...Embezzlement a White Collar Crime As we are children we grow up to learn that stealing is an action that has consequences and should not be committed, as we grow older however we are exposed to a world in, which cheating and bribery as well as stealing is prevalent all around the world and has dire consequences for the individuals that are victims to this offense as well as the people who commit this treacherous act. In the real world the determining factors in a person getting convicted and punished all differ depending on the action and the amount of money that was stolen and the actions that were undertaken to embezzle the funds necessary to complete the crime. As time progressed, the punishment for what embezzlement entails has changed, this has coincided with the evolution of the legal system and the definition of embezzlement changing has well as the moral awareness increasing through our countries history. Embezzlement is a non-violent offense that is an economic crime and has been around since the 1800s and before the innovation of the term white collar crime. While embezzlement does not exhibit the violence of a crime such as assault or robbery the effects of the crime ripple through communities and impair the ability of individuals to trust entities and businesses with their hard earned money. Through examining the evolution of embezzlement and how it has evolved from the 1800s to the mid- 1900s and today is what will be examined in these next pages. By examining......
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Embezzlement at Sanchou College
...1. What internal control procedures would you recommend to remedy the control deficiencies related to tuition receipt and refund procedures? Firstly, I would recommend actions geared towards safeguarding the college’s assets, as well designed internal controls protect assets from accidental loss or loss from fraud (especially as it regards to the acquisition of tuition receipts and the ensuing disbursement of funds). Secondly, the reliability and integrity of financial information garnered by the FSD, and the information held by the different schools of the college must be ensured. Management must have accurate, timely and complete information, including accounting records, in order to plan, monitor and report business operations. Additionally, compliance is a key component to this process. Sanchou College must be in compliance with the many federal, state and local laws and regulations affecting the operations of their business actions. Lastly, it is my recommendation that the college seek to promote efficient and effective operations. This will provide an environment in which managers and staff can maximize the efficiency and effectiveness of their operations. 2. How does the tone set up by top management influence the effectiveness of internal control? The tone set by top management- the corporate environment or culture within which financial reporting occurs- is the most important......
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...Moise saidkov Term paper Business law Historically, embezzlement became a crime because thefts were occurring in which the elements of larceny could not be met because the thief had the right to possess the funds; thus, the prosecution could not prove the element of a “trespassory taking.” Meanwhile, proving embezzlement only requires showing either that the employee had possession of the goods or funds because of the employee’s position or that the employee had the authority to exercise substantial control over the goods or funds. Courts determine the question of substantial control by considering the employee’s job title, job description, and the practices of that particular company. Some states also have fraudulent conversion statutes, which provide for the criminalization of actions that border between larceny and embezzlement. The government can also charge individuals with attempted embezzlement. Methods of embezzlement differ. Some embezzlers “skim off the top” so that they continually acquire a small amount over a particular time interval. This method reduces the likelihood of being caught. On the other hand, some embezzlers steal a very large amount of the goods or funds on a single instance and then disappear. Sometimes company manager’s under-report income to their supervisors and keep the difference. The Internal Revenue Service requires that embezzlers include embezzled funds in their yearly income taxes. Upon returning the funds or paying......
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Unique Rubber Products
...851,000 shares. A $34 million embezzlement of cash from the KOSS occurred over a 12-year period from 1997 through December 2009. QUESTIONS AND ANSWERS 1. What is the problem in the Koss Corporation case? This case evolves about a wide-ranging fraud committed by senior members of the accounting department of Koss Corporation. Over a period of years, Sachdeva, the Principal Accounting Officer, Secretary and Vice-President of Finance at Koss had stole over $30 million from the Company. Sachdeva used the embezzled funds to finance her extravagant lifestyle and for her personal spendings. Mulvaney, working in concert with Sachdeva, prepared false journal entries to disguise Sachdeva's misappropriation of funds. Sachdeva and Mulvaney attempted to hide the embezzlement in the Company's financial statements by overstating assets, expenses, and cost of sales, and by understating liabilities and sales. Over the last 12 years, Koss never realised the embezzlement made by the culprit. The embezzlement was revealed on December 18, 2009, when American Express (principal bank for Koss Corporation) notified the Company that funds were being wired from a Company bank account to pay for expenses on Sachdeva's personal credit card. Sachdeva was arrested after she admitted to using Company funds to pay for personal expenses, including payments for her personal credit card. 2. Who is or are involved in the problem? The persons who are involved in this embezzlement and also responsible......
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Staff Auditor Embezzlement at a Small Client
...Maxwell and Company: Staff Auditor Embezzlement at a Small Client 1. Anna Thomas committed a fraudulent act by making personal charges and cash withdrawals on Rusher Automotive’s credit card. The accounting profession believes there are three conditions necessary for fraudulent behavior. (See Statement on Auditing Standards No. 99, Consideration of Fraud in a Financial Statement Audit. For additional explanation, you may want to review Buckhoff .) a. List the three elements and discuss how each of these elements is present in Anna Thomas’ fraud at Rusher Automotive. The three elements of fraudulent behavior are pressure, opportunity and rationalization, all of which were present in Anna Thomas’ fraud at Rusher Automotive. Pressure stemmed from debt obligations, family responsibilities, and a self-created image responsibility related to being known as a professional accountant. The element of opportunity stemmed from the fact that she was the only staff accountant assigned to Rusher Automotive, performing several accounting functions that were not reviewed by either Allen Rusher or Jerry Maxwell; i.e. no segregation of duties or checks and balances. In regards to rationalization, it would seem that Anna rationalized her behavior in several ways. First, she felt that she “rightfully deserved” respect for being a public accountant, meaning that she potentially believed she was above those in the community and therefore entitled to living a life of luxury. Next,......
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Lee and Li
...affected by this embezzlement? What was the magnitude of the harm to these parties? Answer: Eddie Liu one of Lee and Li senior assistants found a loophole in the power of attorney from one of the firm’s clients, SanDisk Corporation (SanDisk), which allowed him to illegally sell shares and sneak out from Taiwan. Unfortunately, Lee, and Lee had no insurance to cover this embezzlement. Lee and Li and Sandisk corporations and United Microelectronic Inc. (UMC) are the parties majorly affected by this embezzlement. Lee and Li firm running with great core values with a motto “we care, we serve, we excel” was globally connected and has thousands of clients across many countries, this embezzlement might affect the brand name of the company and the trust among the potential customers of the Lee & Li’s firm. This also results in losing trust among the employees and clients who have been tied to Lee & Li from many years. This will have huge financial impact for both Lee & li and the Sandisk corporations. Lee and Li might get bankrupt and might not be able to pay their employees. The relation between Lee & Li and the Sandisk companies will be affected. Being a globally connected country with thousands of clients Lee & Li must have to monitor their policies without having loopholes. They might lose the trust in the ethics of the other employees. Sandisk Corporation being a multinational company will have financial impact on its operations. This Embezzlement also......
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White Collar Crimes
...Embezzlement and Credit Card Fraud In almost every case, white collar crimes are committed by businesses and government professionals, and are generally of non-violent nature, in which are financially motivated. The Federal Bureau of Investigation now associates a wide range of fraudulent crimes as being white collar. Credit card fraud and embezzlement are two amongst those on their list. This paper will discuss what and how these two crimes are committed, the impacts each have on businesses, and what tools are available to reduce the opportunities of each crime. First, lest start by defining embezzlement. In a nutshell, embezzlement is the theft or misappropriation of funds or property in one’s trust or belonging to one’s employer (HG.org). In order for someone to be guilty of embezzlement, the accused would have had to convert or deal with funds or property entrusted by the victim in a way that was not agreed upon. A basic scenario of this would be a manager of a convenient store pocketing money from the store’s cash register and not documenting the transaction. However, if for instance a store associate were to do the same, that associate could only be charged of larceny, because a store associate is not entrusted with the cash in the register (HG.org). Here is another example. In October of 2014, a woman was sentenced to 12 years in state prison for embezzling nearly two million dollars from her employer. Suzan Glawatz was a bookkeeper for Dr.......
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Acc 564 Wk 7 Assignment 3 Fraud in the Accounting Information System
...ACC 564 WK 7 ASSIGNMENT 3 FRAUD IN THE ACCOUNTING INFORMATION SYSTEM To purchase this visit here: http://www.activitymode.com/product/acc-564-wk-7-assignment-3-fraud-in-the-accounting-information-system/ Contact us at: SUPPORT@ACTIVITYMODE.COM ACC 564 WK 7 ASSIGNMENT 3 FRAUD IN THE ACCOUNTING INFORMATION SYSTEM For this assignment, research the Internet or Strayer databases to locate a firm that was involved in a fraud and / or embezzlement case. Explain how the firm’s accounting information system (i.e., components and functions) contributed to the fraud and / or embezzlement. You will need to focus on how each component / function of the accounting information system failed, which resulted in the scandal / case. Write a ten to twelve (10-12) page paper in which you: 1. Based on the information you researched, assess the failure of the firm’s accounting information system to prevent the related fraud / embezzlement. 2. Imagine that the company that you researched uses a third-party accounting system. Evaluate the effectiveness of the firm’s stakeholder in the event that a third-party accounting system suffers a breach. Include an assessment of the level of responsibility of the software provider to the business and its clients. Provide support for your rationale. 3. Determine what advances in accounting and / or information technology could have prevented the event from occurring. Provide support for your argument. 4. Evaluate what changes should be made to......
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Case 6.1: the Greater Providence Deposit & Trust Embezzlement
...Assignment # 1 Case 6.1 The Greater Providence Deposit & Trust Embezzlement Accounting Information Systems – ACC 564 Professor Jim Ridilla October 23, 2011 Discuss how Greater Providence Deposit & Trust might improve its control procedures over the disbursement of loan funds to minimize the risk of this type of fraud. Segregation of duties is a fundamental element of internal control in any company. No single employee should be given too much responsibility over certain business transactions or processes. When one person in an organization has too much control or access over these responsibilities, problems can and often do arise. In the case of The Greater Providence Deposit & Trust, James Guisti was a manager and trusted employee. Mr. Guisti’s job required him to know the details and intricacies involved in the operation of processing consumer loans. Adequate segregation of duties were not put into place at the Bank, creating a scenario that allowed Mr. Giusti to use his knowledge to embezzle close to $2 million from his employer. Mr. Giusti was authorized to make consumer loans up to a certain dollar limit without loan committee approvals. He then used his position of authority over the customer service representative, Lucy Farioli, to have her co-sign loan checks that were, unbeknownst to her, bogus. Mr. Giusti should have been required to have a member of upper management, not Ms. Fraioli, co-sign the checks. Backup documentation......
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Civil and Criminal Penalties for Embezzlement
...Embezzlement is a serious crime that carries penalties in both the civil and criminal court systems. When you embezzle money or property from a company, you should know that you are taking serious risks. Essentially, embezzlement occurs when a person or persons in a company receive money or property because they've been given a certain degree of trust. As you can tell, the law is quite vague on this particular crime. As with many criminal offenses, the civil penalties are just as stiff as the criminal ones, though you cannot be given jail time at the ruling of a civil court judge. In most cases, offenders face criminal charges first, then move on to civil court afterward so that the company can reclaim what it lost. In other words, you'll likely be in jail with no money for the commissary. When you commit the crime of embezzlement, the strongest evidence against you will likely be a paper trail that leads directly from you to the missing money or assets. This often occurs because the person charged is the only individual with access to the funds, and thus becomes the prime suspect by the process of elimination. If no one else could have done it, in other words, you're the guilty party. In the criminal court system, the penalties for embezzlement usually include a jail sentence and a fine, both of which can be substantial. The United States Code, Title 18, deals with all forms of embezzlement, of which there are many. The sentence you receive will depend on the nature......
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...his or her losses. Embezzlement is the act of dishonestly withholding assets for the purpose of conversion (theft), of such assets by one or more individuals to whom such assets have been entrusted, to be held and/or used for other purposes. Embezzlement generally falls under the purview of theft and can carry a lengthy incarceration as well as heavy civil penalties. The law is quite vague on this particular crime. As with many criminal offenses, the civil penalties carry and equal degree of severity as the criminal penalties. In most embezzlement cases, offenders face criminal charges first, then move on to civil court afterward in order that the company can reclaim restitution. When the crime of embezzlement is committed, the strongest evidence is the paper trail that leads directly from the perpetrator to the missing money or assets. This often occurs because the person charged is the only individual with access to the funds, and thus becomes the prime suspect by the process of elimination. If no one else could have done it, in other words, you're the guilty party. In the criminal court system, the penalties for embezzlement usually include a jail sentence and a fine, both of which can be substantial. The United States Code, Title 18, deals with all forms of embezzlement, of which there are many. The sentence meted will depend on the nature of the crime committed and the amount of money or value of property stolen. The civil penalties for embezzlement are not much......
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... This is regarding an embezzlement case that was brought to my attention. Options for the company: “The investigation of a white-collar crime like embezzlement is difficult due to a lack of physical evidence. Accusations of embezzlement do not take place after a violent act and proof of wrongdoing requires extensive research. You need to take the right approach in order to legally investigate and prove embezzlement.” (eHow Contributor, 2012) There could be a number of options for the company to take for the embezzlement case. I would recommend them to hold back and get as much information as possible before the confront anyone. This way they have a stronger case, if they question anyone right away then the embezzler has a chance to get rid of any kind of any evidence that would destory him at a trial. Paying attention to all the telephone, company emails, and all the internal records will help with determine if he has been embezzling from the company. By looking at the call log can determine who would be helping him. By having someone call the hotline and giving very important information helps stop this kind of crimes. Having the right people working the hotline and asking the right types of questions makes the investigation go smoothly. Steps for the Interview: There are a few steps that need to be done before anyone can start interviewing. You will want to gather as much evidence as possible to have a stronger case. Embezzlement is something that is......
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Five years ago I posted an essay about embezzlement at history organizations while I was on AASLH Council and in the midst of recovering from the financial fraud perpetrated by its chief financial officer. History News recently published my updated version and included a sidebar by John Dichtl to describe the fraud at AASLH. When it occurred, AASLH wanted to be open and transparent about the situation and use it to help others, and yet, we often found ourselves silent and frustrated because it could have jeopardized the criminal investigation and lawsuits. Now that the CFO has been sentenced, AASLH can discuss it more openly (although some aspects are covered by confidentiality agreements). Please share this article with your colleagues to help them tighten their financial controls and reduce the chances of embezzlement at their organizations.
By the way, this issue of History News has lots of good articles for historic sites, including:
- “The Many Voices of a Historic House” by Jane Mitchell Eliasof (about the effort reinterpret the Crane House in Montclair, New Jersey as an African American YWCA from 1920 to 1965)
- “Like a Phoenix: Opportunities in the Aftermath of Disaster” by Samantha Engel (about the fire that occurred during a construction project at the Whaley Historic House Museum in Flint, Michigan)
- “A Please Touch Historic House Tour” by Christine Ermenc, Christina Vida, and Scott Wands (a case study of an award-winning program at the Strong-Howard House in Windsor, Connecticut).
History News is one of the best benefits of membership in AASLH. Along with a quarterly copy in the mail, they recently added online access through JStor and send members a pdf version in advance via email. I’ve been a member for nearly 40 years and if you want to find consistently useful ideas for managing your historic site or house museum, there’s no better place than AASLH.