CREDIT UNION CEO EMBEZZLES THOUSANDS

The Richmond Times-Dispatch reports that the former CEO of a Virginia credit union has been sentenced to one year in jail for embezzling more than US $50,000, which he used to compensate his divorce lawyer, buy luxury items, and pay COBRA health insurance premiums for his girlfriend. According to authorities, the former CEO accomplished most of the theft by charging personal expenses to a company credit card or by having bills for personal expenses paid through the credit union’s accounting department.

Lessons Learned

This situation highlights how theft by a senior official can harm everyone — including employees. It also illustrates how control weaknesses can create an opportunity that, as a result of pressures, can lead to wrongdoing. Prosecutors noted that employees who suspected the wrongdoing were afraid they would lose their jobs if they confronted the CEO.

Although fraud can be perpetrated at any level in an organization, it often is more difficult for employees who suspect wrongdoing to report potential fraud committed by senior employees or executives. Organizations need to have an internal auditor, an audit committee, a hotline, or other means to report suspicions available to employees. Internal and external auditors should be aware of situations where employees have little or no means to report suspected wrongdoing and strive to provide them with an appropriate reporting mechanism.


Share This Article:    


COMMENT ON THIS ARTICLE

Internal Auditor is pleased to provide you an opportunity to share your thoughts about the articles posted on this site. Some comments may be reprinted elsewhere, online, or offline. We encourage lively, open discussion and only ask that you refrain from personal comments and remarks that are off topic. Internal Auditor reserves the right to edit/remove comments.

Name:

Email:

Subject:

Comment:


To make something bold:
<strong>Text to bold</strong>

To make something italic:
<em>Text to italicize</em>

To make a hyperlink:
<a href="URL">Text to link</a>

 

April 2014IaCover

  IPPF_Ap42014 

IIA SmartBrief

Bookstore Digital

 IIA Academic_Nov 2013

 

 

 Twitter

 facebook IAO 

IA APP