News Column

Tips for Businesses to Avoid Embezzlement

Jan. 14, 2013

Chuck Slothower

Business

The arrest last week of a manager at the Bloomfield Motor Vehicle Department on suspicion of embezzling $24,000 was only the latest in a rash of employee thefts in San Juan County.

Accountants and business leaders say small businesses can take steps to protect themselves from employee theft. Good accounting practices are a must.

"Most commonly the embezzlement cases we find, the employer or whoever is being embezzled from looks at their accounting practices and reconsiders what they're going to do in the future," said Dustin O'Brien, chief deputy district attorney.

"A lot of business owners are too trusting of their employees," he said.

In the past year, the Farmington area has seen a streak of suspected fraud and embezzlement:

--Debbie Dusenbery, the longtime executive director of the Farmington Convention and Visitors Bureau, resigned while under investigation for suspicion of embezzling about $450,000 from the Bureau over eight years. She later committed suicide.

--Bobby Willis, the former owner of New Mexico Title Co., is charged with embezzling more than $5 million in two cases related to investors in his failed Kirtland hospital proposal. His attorneys contest the charges.

--Shannon Strunk, a one-time New Mexico Title employee, was charged with embezzling more than $14,000 from a subsequent employer, ABC Concrete, and two related property management companies. She is suspected of taking cash from the office. A hearing in the case was last week.

--Shawna Tobin is accused of bilking money from dozens of local businesses by setting up a fake charity and soliciting more than $11,000 in donations. She has applied for a diversion program.

--Last week, Melissa Mead was arrested on suspicion of stealing cash from the Motor Vehicle Department. Mead allegedly took the cash to a local casino, where she lost it.

Accountants and investigators say it's likely many more cases are not reported.

"Particularly small businesses, they don't want their reputation ruined, they don't want to look stupid, so they don't report it," said Scott Samuelson, partner at Chandler & Co. LLP, a Farmington accounting firm. "They certainly don't report it to the press."

Business owners should assess their exposure to internal theft, and then develop procedures to mitigate those risks, he said.

Most important to avoiding embezzlement is internal controls such as having two people examining accounts. Experts also recommend different people fill out deposit slips and take the deposits to the bank. Owners should also make sure employees aren't writing business checks to themselves.

"The individual owner needs to be looking at the bank reconciliations, making sure the checks that clear are the checks he's authorized," Samuelson said.

The Farmington Chamber of Commerce strengthened its internal controls last summer, said Dorothy Nobis, president and CEO.

"For a long time we had handled the financials in house," she said. "Last summer, we hired an outside company who does the reconciliations. It removes me from the equation."

The Chamber underwent an outside audit in September and plans to continue the audits every three years, or as needed, Nobis said.

The Chamber also has a Finance and Operations Committee, composed of financial professionals, who review the organization's finances. The committee once refused to accept a reconciliation that was off by 28 cents. Nobis said she appreciates the committee's diligence.

"Particularly when you're a nonprofit, I don't think you can have too many eyes looking at the finances and the money that comes into the organization," she said.

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Distributed by MCT Information Services


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Source: (c) 2013 The Daily Times (Farmington, N.M.)


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