No employer is immune from theft by an employee. I have blogged and presented on the topic of employee fraud and theft in the past. Last week, Cynthia Jacobsen pled guilty to mail fraud in connection with the embezzlement of more than $1 million dollars from Minnesota Company, Land O’Lakes, where she worked as an accounts payable supervisor. She used the money to feed her gambling habit.
As the accounts payable supervisor, Ms. Jacobsen authorized payments to vendors of Land O’Lakes. Starting back in 2008, Ms. Jacobsen began listing her daughter as a vendor under various fake business names she created, and authorized payments to her daughter. Ms. Jacobsen used her home address as the address for each of the fake businesses, and she forged her daughter’s signature and cashed the checks. Her daughter was not aware of the scam, nor did she receive any of the money. It wasn’t until May 2012 when another employee at Land O’Lakes suspected Ms. Jacobsen of wrongdoing, that the embezzlement was discovered. By then Ms. Jacobsen had issued 489 bogus checks.
Interestingly, Ms. Jacobsen has had other issues with money troubles. She served probation in the early ‘90s stemming from a misdemeanor count of theft by swindle involving $17,199. She had also filed for personal bankruptcy when she worked in the accounting department of Best Buy. Both of these issues should have come up on any background check done by Land O’Lakes, and should have perhaps given a moment of pause to anyone considering hiring her in an accounting position.
The embezzlement by Ms. Jacobsen could have been prevented or discovered much sooner if Land O’Lakes had some simple business practices in place. My law partner, Marylee Abrams, has previously blogged on the importance of doing a vulnerability assessment of business practices and what to consider and implement.
Land O’Lakes is a multi-million dollar company which you would expect to conduct routine audits. It took almost four years to discover this fraud. Clearly, employees are getting cleverer about covering up their crimes, and all Employers, large or small, need to keep current on their business practices and make changes when necessary to protect their businesses and stop employee fraud and theft.