executive defrauding his own business

CASE STUDIES

BOGUS BILLING LEADS TO SIX FIGURE FRAUD

The Theft

A division vice-president doing business with an outside consultant approached him with a proposition: he would approve invoices for services not actually performed in return for a 50% kickback on the fraudulent bills.

The executive had the authority to approve the invoices and was the only one who knew what services were actually being performed. Over the next 18 months, he defrauded his company out of more than $286,000.00, splitting the illicit payments with the consultant.

The Investigation

After Danbee Investigations began examining the company’s purchasing practices, they uncovered two factors about the division executive that caused them to take a closer look at his relationship with the vendor in question:

  1. There was a gradual, but steady increase in payments made to this particular vendor, yet there appeared to be no reason why the consulting services were in greater demand.
  2. There was little or no support documentation correlating to this consulting firm’s invoices. Consequently, it was impossible to pinpoint what services were, in fact, required or provided. This was contrary to normal company purchasing practices.

The Outcome

Danbee investigators subsequently compiled irrefutable evidence against the division executive and the consulting firm via the use of strategically placed covert video cameras that recorded the times and dates that the consultant’s representatives allegedly provided on-site service. Since the consulting firm’s fees were based on billable hours, it became obvious that their invoices were being grossly inflated.

The owner of the consulting firm as well as the division executive were confronted with the documentation compiled by the investigation team. After reviewing the evidence, both the executive and the consultant provided Danbee’s representatives with formal admissions of guilt.