One of the easiest and most common ways for a fraudster to come away with ill-gotten gains at the expense of the employer or contractor is through expense reports. Policies regarding the detail in which expenses must be submitted for reimbursement vary widely, and some companies are either too lax or have no coherent rules at all.
The general counsel of the refinery cleaning subsidiary of a multinational waste management firm employed us to investigate the expense account of the manager of the company’s facility in Port Arthur, Texas. An extensive probe revealed the manager to be carrying out a broad and systematic pattern of defrauding the employer by submitting personal charges on business expense reports.
The manager’s Illicit expenses that were revealed in the course of the investigation included: lumber and other supplies to build a beach home, jewelry purchased for a paramour, lodging and meals at a luxury casino, and maintenance and repair materials for an apartment complex owned by the manager.
Interviews of the manager’s superiors uncovered a long pattern of the parent company overlooking his repeated failures to provide adequate documentation to support the expenses being submitted. The superiors neglected to take action when the manager defiantly refused to comply with new expense documentation policies, stating, “That’s how we’ve always done it.”
The expense account fraud, along with evidence of other illicit schemes, led to the firing of the manager, who agreed to forego a retirement account in return for the employer agreeing not to file a criminal complaint.
Regardless of the reason — failure to employ or abide by strict guidelines for reporting and detailing reimbursement of expense reports is an invitation for fraud. The experts at ResultQuest can help craft an expense reimbursement program that minimizes the opportunity for fraud. In the event that expense account fraud is suspected, our professionals are skilled at quantifying the scope of the problem and formulating a response.
If you need to investigate or protect against expense account fraud, contact ResultQuest at 713-781-9040.