Short Circuited Thief
By: Neil Harrison ~
Short Circuited Thief...
One summer Saturday night, I was just closing up the office and looking forward to relaxing on the deck of my condo, overlooking snow capped Mount Baker, and sipping on a glass of Lagavulin..... when the phone rang.
It was the manager of a local electronics supply chain, named after my home town in England, where I have been known to purchase the odd electronic device, and drop of my business card. The manager had recently conducted a full inventory, across all four branch locations, and was concerned about a number of computer and audio video devices missing from the inventory report. We agreed to meet the following morning to discuss the situation with his managing director who was visiting from the home office.
The following morning, after the introductions and niceties were over, we reviewed the inventory reports which seemed to indicate that hundreds of computer components and accessories were missing from the inventoried stock. We then compared the lists to the sales receipts and purchasing records of all four stores, to verify what products had actually been received, and what items had actually been sold.
Unfortunately we were able to verify the directors suspicion that approximately $750,000.00 of computer and audio/video items were unaccounted for, and likely had been stolen. We were also able to identify three customers, from the sales receipts, who not only didn't appear to actually exist, but who had purchased large quantities of the missing items.
The next step was to develop an investigative plan. One that would not only verify where the missing items had ended up, but how they had been stolen, and if any of the stolen equipment was recoverable to mitigate the companies losses. It was also determined that the person or persons that had pulled off this theft/fraud, had to have access to the customer application process, have the ability to influence the ordering process, and have access to the inventory and warehouse system.
We then conducted due diligence background and lifestyle checks, on all accounting staff at the branches, on all sales staff at the branches, and on all management at the branch level. it was soon determined that the losses and falsely reported sales had taken place at only three of the four branches, and during specific time frames. After comparing employee time and expense reports we were able to narrow our focus to just two primary suspects who both appeared to be living beyond their means, and were in all locations at the times of the fraudulent sales and inventory losses.
The first person we investigated was one of the branch managers who had recently purchased a luxury home bordering on an exclusive local golf course. After some further research and discreet inquiries we were able to determine that this manager had recently come into an inheritance from his recently deceased father-in-law, and was investing it in his upcoming retirement.
This left the second suspect....
..... jackpot. The second suspect was a sales manager at another branch who had been recently recognized with a company sales achievement award, and bonus, for his high sales figures. He was immediately placed under surveillance, and his complete corporate files for the past two years were provided to us for closer analysis. At the same time we conducted an in depth background and social media search.
We were able to determine that the sales manager was advertising and selling high end computer components online through Craigslist, Ebay, and Offerup websites, as well as expensive video and still cameras, and custom order audio equipment matching some of the missing inventory items.
Our surveillance also provided evidence of the sales manager, and his extended family, using high end audio and video equipment matching some of the missing inventory items. Oh, and by the way, he was also found to be falsifying his expense reports, taking the non-existent clients from the non-existent companies, for lunches and to sports events.
The next step was to contact the companies lawyers and the prosecutors office to lay out our case and allegations against the sales manager. After reviewing the case with counsel we recommended and determined that the sales manager should be formally interviewed, on the record, and given the opportunity to explain some of the inconsistencies in his expense reports and talk about his outside sales activities.
Search Warrant..... based on the information and evidence we obtained from the surveillance, the corporate records, and the interviews...... we were granted a civil search warrant (Anton Pillar Order) for the sales managers residence, out buildings, and vehicles.
Some of the companies missing items were tagged and seized from the sales managers home, serial numbers recorded and matched, blank internal purchasing and sales documents found and seized, and other documents itemizing his online sales activity and revenues were found and seized.
We also located a separate bank account, statements, and transaction registers which enabled our client to recover over $435,000.00 in lost funds from the sale of their items online.
This was the second civil search warrant we have secured and executed...... stay tuned for more!