Democratic Dad Blog

Curious Employee Foils Corporate Credit Card Fraud Scam

MOLLY, THE ASSISTANT, Molly treasurer at XYZ Corp. in Miami, opened an e-mail from a former colleague who no longer worked for the Help Desk Manager Jobs organization. The e-mail read: “Hi Molly, there should be a refund of $716 on my old corporate Visa card from the IP Conference. I paid for, but did not attend, the conference and did not turn in the charge to XYZ for reimbursement. Can you have Visa issue a refund check to me? Thanks very much for your help.”The e-mail was from Jerry, a former XYZ executive who had been Molly’s boss at one time. The message seemed innocuous enough. Jerry had legitimately charged a business Information Security Specialist Jobs conference to his corporate credit card, but he had canceled his registration because he left the company. Therefore, he was due a refund.It would have been very easy for Molly to trust her former boss and get him the refund. Instead, because something didn’t seem quite right, she chose to check on whether XYZ had already reimbursed Jerry for the conference.To make this determination, Molly accessed Jerry’s corporate credit card records online and retrieved his expense reports from the accounts payable file room. The expense reports confirmed that Jerry had not expensed the Computer Operator Jobs conference fee, but when Molly looked at his credit card statement, she saw a couple of odd items.First, the most recent statement indicated that the former XYZ executive had made four payments to his credit card in one month. Second, the statement was two pages long, and Molly knew that Jerry rarely traveled for business. She scanned the charges and noted that most of them were from local vendors. In addition, none of the items looked like business charges. The charges included dinners at local restaurants, department and grocery store charges, and airline tickets for Jerry and his wife that Molly knew were for their recent vacation.Out of curiosity, Molly queried the company’s checks online to see if any of the payments made on Jerry’s Visa account matched the dollar amounts of checks written by XYZ. Sure enough, she found that all four payments made to Jerry’s credit card that month equaled amounts on checks that the company had written to Visa. Molly increased the scope of her search and observed that every payment posted to Jerry’s corporate credit card over the previous 12 months was from a check written by the company. She also noticed that of the $88,000 in charges on Jerry’s card over that time frame, none was for business expenses.Molly printed copies of all of the checks and noted that, although Visa was listed as the payee on all of them, Jerry’s corporate credit card account number was handwritten on each check. Molly approached the director of internal auditing as well as Jerry’s former manager and requested an investigation into the matter.While working for XYZ, Jerry was in charge of making sure that the organization paid delinquent balances on the corporate credit cards of people who had left the company. XYZ had an arrangement with the credit card company that it would guarantee payment for certain employees if those employees did not pay the balances on their accounts. Once a month, Jerry would provide accounts payable with a list of delinquent accounts on guaranteed cards, and accounts payable would cut the check to the credit card company.However, on the bottom of every check request in Jerry’s last year of employment, he had written, “Please deliver the check to me.” Typically, accounts payable would mail the check directly to the credit card company, but because accounts payable knew that Jerry maintained a relationship with the credit card company, they adhered to his request and delivered the checks to him. When Jerry received a check, he would write his own account number on the check, and the bank would apply the payment to Jerry’s credit card.