Sunday Gazette-Mail from Charleston, West Virginia on August 6, 1972 · Page 65
Get access to this page with a Free Trial
Click to view larger version
August 6, 1972

Sunday Gazette-Mail from Charleston, West Virginia · Page 65

Publication:
Location:
Charleston, West Virginia
Issue Date:
Sunday, August 6, 1972
Page:
Page 65
Cancel
Start Free Trial

Page 65 article text (OCR)

of complaints of employee theft of nails, flashlights, tools, hack saws, screw drivers and chisels." The president of one of America's largest surety companies recently told me that his company had, during one..year alone, received employee-theft claims for the loss of aspirin, automobiles, barley, codliver oil, tooth paste, face powder,' feed, shaving cream and typewriters. "Why," he said, "we even had a building superintendent who defrauded his boss by selling the radiators and washbasins of a vacant building." These embezzlements are difficult to control because business inventories are always susceptible to errors. Many big producers, take inventories only once a year of the millions of parts that pass through their plants, and such legitimate items as spoilage, breakage, rejects and "seconds" can be used to throw management off the scent of inside hauls or bookkeeping chicanery. But an even more significant consideration is this: most thefts are not perpetrated by employees with shadowy backgrounds, but by trusted personnel with long and quite faithful records. When they are finally brought to face their employer, the situatjon is likely to b« steeped in heartbreak. In one recent case, a trusted woman bookkeeper for a modest-sized firm squandered $40,000 of her employer's money before being discovered. She drew a four-year prison term, but the man whose confidence she had betrayed did not live to see her sentenced. Shocked over the wreckage of a business he had spent a l i f e t i m e c r e a t i n g , b e d e v i l e d b y creditors, he walked to the ninth floor of his office building and jumped to his death. In a Midwest village, violation of trust by a citizen of impeccable reputation made a shambles of the community. This man had begun his career as a bank clerk, had become president of the bank and village treasurer, and had brought the village the hum of prosperous industries. But one day he called on the .bank commissioner and poured out an appalling story. He had lost heavily in the stock market, had stolen $75,000 from the bank, from local fraternal groups, from school funds. To the stunned inhabitants of the village, this "impossible" financial disaster rivaled an epidemic of disease. Surety company surveys show that: the average embezzer is about 36 years old, has a wife and two children, and is usually regarded highly by his boss and neighbors. He may live in any state of the Union, in a large city or a village. He begins to steal only after putting in six years of exemplary service. One case was discovered in a Southern town where a bookkeeper did not start robbing the company until 38 years after he began working for the firm! Why do employees whose basic instincts are apparently honest resort to theft? These are the principal causes: .» Gambling a Extravagant livinjstandards ·* Unusual family expense *· Undesirable associates *· Inadequate income Almost every type of gambling has enjoyed a boom in the last decade, and surety companies link this fact directly with the increase in employee stealing throughout the country. Slot machines, roulette wheels, dice games, horse racing--all are used as come-ons to tempt th» "honest" worker into making a fortune with the boss'i money. Often th« arrogant insistence on "keeping up with the Joneses" forces a trusted employee to slip Into the mire of dishonesty. Often doting fathers may be subjected to demands from spoiled children-demands which they can't satisfy without sacrificing their souls. One bank executive in a small town who also served as treasurer of his church was continually STA TE MA GAZINE, August 6,1972 being pressed for money by his young son- in-law, who lived beyond his means. The banker kept endorsing the young man's notes, then wrote personal checks against a bank trust fund to cover the obligations as,they came due. Finally, he began drawing personal checks 'against the church account. He was found out and disgraced in the community. Brought to trial, he was acquitted. At last report, he was a broken man, working for a pittance, as a bookkeeper to support his wife and his daughter--who f i n a l l y divorced her w o r t h l e s s h u s b a n d -- a n d t w o grandchildren. Strangely enough, the employer is sometimes responsible for his own losses by forcing an employee to adopt living standards he can't afford, to enhance the company's reputation. Salesman particularly, when they have been forced to "put on the dog" as a front for their company, have been known to raid the boss's till to carry out his wishes. Probably the most pathetic swindles are those staged to meet financial crises arising in a family. For instance, a Detroit shipping clerk found that his wife needed an operation and insisted on the services of a top surgeon. Unable to meet the surgeon's fee, he juggled his stock records until he was able to pocket'the proper amount. The "other woman" plays a prominent role in many embezzlement cases. Employees with years of spotless records have also been known to fall in with fast- living companions who steer them to eventual ruin. "Bad breaks seem to follow for employees, once they have made the first false step," says E.'Ashbury Davis, past president of the U.S. Fidelity and Guaranty. "If money is taken to bet on a sure winner, the horse runs last. If taken to pay the butcher, then the grocer demands payment before the first amount can be returned to the till. Stocks purchased with the hope of recouping suem to slump quickly." In court, embezzling employees sometimes try to justify their indiscretions by insisting that the boss actually "owed" them the stolen money. A Philadelphia cashier pocketed $10 a week for 26 weeks when he was refused a raise which he felt was his due. A $5,000-a-year assistant bank cashier stole another $5,000 each year to make up for his meager salary. Another problem is the employee who can't see how the removal of a few items of stock from a great corporation constitutes theft. Once the habit of "taking things home" is started, it becomes an almost irresistible attraction. Often the stolen merchandise is not even needed by the embezzler, but is pocketed in a thoughtless moment because he likes the idea of "getting away with something." In two other recent cases, Vromen embezzlers turned their proceeds over to a paralyzed man and to a church fund, respectively. Usually women are involved i n t h e s e " u n s e l f i s h " embezzlements because surety-company studies show that,the female swindler is more prone than the male to turn thief in order to help somebody else. One surety company estimates that there ,are 71 different ways an employee can steal, r a n g i n g from the simple pocketing of a tool to the most Intricate accounting manipulation. The seven most common methods are these: *· Paying bills to nonexistent companies and cashing the checks with fake signatures. i» Invoicing goods below established prices and getting a cash bribe. »· Raising the amounts on checks, invoices and vouchers after they have been approved. *· Issuing and cashing checks for "returned goods" not returned. * Pocketing the proceeds from cash sales and not recording the sales. *· Collecting doubtful bills and reporting them noncollectable. »· Padding .pay rolls, time and production records. What can be done to meet the growing American problems of employe theft? The first antidote is improved security precautions. Surety officials .and public- accounting firms have devised a series of internal checks which, if applied properly, would go far toward preventing employee fraud. Detailed procedures for individual firms are beyond the scope of this article, but here are some general rules useful in almost every business: ·* Rigid character investigations should be made before an employee is hired for a position of trust. - Division of labor should be stressed, so that no single employee is assigned to record and handle all phases of a financial transaction. Mf possible, employees should be rotated in different jobs. *· At least once annually, statements to customers should be sent out during the vacation of the bookkeeper or cashier. »»· Countersignatures should be required on all checks. *· Inventories should be taken as often as possible, and by someone other than the person in charge of the stock room. *· All invoices and statements for mechandise and supplies should be approved by the proper authority, other than the bookkeeper, before payment is made. »*· Distribution of pay-roll money should be made by someone other than the person who computes the pay roll. Embezzlers generally fear the relentless arm of the surety company even more than they do the traditional long arm of the law, and for good reason: the bonding firms can't afford to let a swindler get away. Recently, detectives from one company caught up with a man in Alaska who had pocketed $20,000 of his firm's money in Atlanta, Ga., almost 25 years ago. Cordial relations between employer and i n d i v i d u a l employee or employee organizations is regarded as a definite factor in limiting thefts. And in some firms, a policy of selling the company's own products at reduced rates "to employes has operated to keep thefts within the organization at a minimum. But even where such enlightened practice is in force, cases of employee theft are recorded r e g u l a r l y . The final answer, of course, lies with the employee himself. It is necessary for each worker to reexamine his own moral values, and to remember (should temptation ever present itself) the ancient lesson that crime does not pay. · *»V* Mrt. ff Norfolk, "AW / can Ja u many ihinft I u-ai ri^hi o«m-, Soneiimtt ihtr /«.» tnt ty «i*a««f in da btfart like iximminf and anil ihn turn araunil unit call mt buck. Ktn Schmidt Itnnu,' vritn Mrt. Sehmidi. ,'l rni.iv Tktt luti can'i htl,tn ii't the lamf mil vtarmg arran siirt 11-11't ruhrr than Ma'ft. Thty ink hn»- I did il tnd h# ·('!. £··« ntyfritntiifn'trtcmnistmt //«/. TV· 'think I/wvl la nkt.* Eat Well...Lose That So you want to lose 5, 10, 25 or more pound! of excessive weight? ... Her* now it »n extraordinary easy figure-slimming Plan that often you way to flet rid of unsightly, superfluous fat you're carrying -- without strenuous exercises., .and. most important of ·II, without missinfl a mnsl. Satisfy your appetite and peel off those excess, extra pounds, too. Now with the X-11 Reducing Plin. you on remove pounds and inches from thighs, neck, legs, waist -- all OVER ~ stabilize reduces weight that you may dream about «s you follow this Plan. While you eat satisfying meals, no longer will you be the prisoner of the evereating habit, because with -the X-11 Plan, you eat less - want le»s. You lose weight... while you eat well. SATISFACTION GUARANTEED Yon must bt complttily tttisfitil or limply rtturn for « /«// rifund. Bet your X-11 Reducing Plan today. If flabby fat doesn't disappear, just return the empty package for .an Immediate re- j fund -. no questions asked. * r _ _ _ _ COM! IN rooty ... on OHOER ay M»H. -- _ --., COHEN-RITE 110,101 2549, Charleston, W. V». 25329 fU»SE SEND M ( j 41 T*nti $ II . PACKAGES (IF X.I1 T*BU T 5. ( 1 10!iT*tii»«i H ADDRESS CITY _ MEN-RUE AID PHARMACY CHARLESTON, W.VA. 3m

Get full access with a Free Trial

Start Free Trial

What members have found on this page