Most of us have been tempted, at one time or another, to let a small purchase slip undetected on a corporate credit card. In these five cases, investigators say greed and hubris trumped ethics and common sense:
#5: Charge your child’s college fund to your corporate credit card.
Described by colleagues as bright and ambitious, Betsy Collins earned the job of executive assistant to the head of a growing home improvement company. While using a corporate credit card to book travel for trade show attendees, Collins discovered that she could charge up to $100,000 per month without requiring her boss’s approval. Soon, Collins used the card and her boss’s email account to buy gift cards and to make PayPal payments to herself. Upon pleading guilty to embezzling over $1.5 million, Collins told prosecutors that she simply wanted to cover her young child’s eventual college expenses.
#4: Buy that awesome flatscreen TV from Best Buy, then pawn it.
Authorities allege that former Texas A&M University business associate Adrienne Martin used three purchasing cards and a department travel credit card to buy $35,000 in goods for resale. Repeat purchases of appliances, personal computers, and home theatre equipment triggered an internal audit. Investigators then tracked an LCD television from its purchase at Best Buy to a neighborhood pawn shop within a single day. The university terminated Martin’s employment six days later.
#3: Purchase your entire Amazon wish list, from your office computer.
Experts at the Association of Certified Fraud Examiners say that rogue employees often rationalize corporate credit card abuse after feeling mistreated by their bosses. A jury in Georgia found Marjorie Warren guilty of forgery and theft after she took her employer’s credit card and checking account on a three-year, $100,000 online shopping spree. Warren told prosecutors that she had been upset when the owner of her struggling medical practice asked her to take a 50% pay cut.
#2: Buy two Jaguars, then buy two more practical vehicles. Like Audis.
Martin Bodner worked as the Chief Financial Officer for Tommy Hilfiger Handbags, and so did his son. At least, that’s what the payroll records showed. When company colleagues questioned two Bodners on the payroll even though only one ever appeared at the office, auditors discovered $19 million in credit card fraud and other embezzlement activity. The star prize: using company credit cards to purchase a pair of Jaguars and a pair of Audis, then setting up automated car insurance payments for all four vehicles. Bodner was sentenced to five years in prison.
#1: Spend $20 million on fancy clothes for your charity fundraising events.
Federal investigators allege that Koss Headphones Vice President Sue Sachdeva used her company’s American Express cards at neighborhood salons and boutiques. Sachdeva’s monthly payments to the card issuer became so large, they required a new wire transfer arrangement. Records indicate that Sachdeva spent $1.35 million on clothes from a single store, among $20 million in disputed charges. Investigators found many of her purchases, with price tags still attached, in the executive’s office. The boutique’s owners told local reporters that Sachdeva often purchased fancy attire for her many fundraising and charity activities. Local officials wondered aloud to the press whether Sachdeva could have made a bigger impact by simply encouraging her employer to donate $20 million to charity directly.
Most corporate credit card accounts now feature advanced fraud protection, accounting for up to one third of detected internal theft cases. ACFE experts estimate that over half of corporate credit card abusers get caught through pure bad luck, such as being spotted using a card by a friend or colleague. Fraud investigators urge company leaders to use credit card reporting tools that make purchase histories transparent to owners, board members, and investors.