An Idaho dairy has filed a lawsuit against its former bookkeeper, claiming she stole $700,000 over the seven years she served as the dairy’s chief financial officer.
In addition to the possible civil penalties in Jerome County, Stephanie Diane Wells, 34, has been criminally charged in Gooding County with 19 felony counts of grand theft, MagicValley.com reports.
According to an affidavit in the case, the owner of Box Canyon Dairy in Wendell suspected Wells of embezzling money when he found a $10,000 Box Canyon check made out to a construction company. When he called the company, they said the check was payment for work done at Wells’ home.
Court documents say the dairy owner would sign blank checks for Wells to pay the company’s invoices. It accuses Wells of altering QuickBooks transactions to show the money was used to pay bills for Box Canyon.
The suit alleges Wells and her husband took the money primarily to pay off credit card debt. It alleges she forged signatures of dairy principals on checks and manipulated and falsified financial records, MagicValley.com reports. Additionally, some money is believed to have been deposited into bank accounts held by Wells.
Protect Yourself From Embezzlement
“Less than 50% of embezzlement cases are ever reported,” says Mark Brady, a CPA and partner with the accounting firm of Cooper Norman in Twin Falls, Idaho.
Many businesses fail to report embezzlement because they don’t want to deal with the publicity or the cost of litigation. Employees who engage in embezzlement are often driven by incentives or pressures. These can include excessive spending, involvement in illicit romantic relationships or addictions to alcohol, drugs or gambling.
Embezzlers can be anyone—old and new employees, owners, managers, people with and without criminal backgrounds. Nearly 63% of all embezzlers are women, but the dollar amount of cases with male embezzlers is nearly double those of females, Brady says.
12 Steps to Reduce Your Exposure To Fraud
- Conduct surprise audits.
- Don’t over-rely on external audits. On average, 23% of fraud cases are detected by internal audits; only 11% are uncovered by external audits.
- Educate employees about the risk-prevention measures your office has in place.
- Set clear standards.
- Check employee references.
- Safeguard your payroll.
- Control who reviews sensitive documents.
- Require employees who work in high risk areas to take vacation.
- Require back-up documentation.
- Never pre-sign checks.
- Make sure financial duties are segregated. For example, the same person should not make and record deposits as well as record the dispersal of checks.
- Encourage whistleblowers.