The Forensic Lady, Pam Wickes of Wickes FAC was interviewed by local newspaper regarding her expert forensic accounting skills, fraud prevention, and fraud investigations in relation to local embezzlement cases in Guilderland, NY.

Thursday, November 29, 2018 – 13:14
by Elizabeth Floyd Mair

Embezzlement Cripples and Scars. Lessons Can Be Learned.

GUILDERLAND — Embezzlement can have far-reaching effects.

Recent cases in Guilderland illustrate this and can also serve as cautionary tales on how organizations might better protect themselves.

The New York State Weatherization Directors Association, which had $800,000 embezzled from its Guilderland office, closed that office, where its fiscal operations had been centered, on Tuesday. Long-term staffers have been laid off and its director worries about the effects nationally for programs that help the poor.

The teachers’ union for the Guilderland schools has changed its financial practices, after its treasurer embezzled union funds several years ago.

The management company for Deer Valley Apartments in Guilderland did not know that for years Jamie Bonkoski — who will be sentenced on Dec. 5 — was stealing tens of thousands of dollars from the complex.

In all of these cases, the employer took the case through to criminal charges and prosecution, but that happens rarely, says local forensic-accounting expert Pamela Wickes. Wickes is a certified public accountant and certified fraud examiner who provides services including fraud prevention and investigation.

In the overwhelming majority of cases, perpetrators are not punished, but only fired, Wickes says. Most of the time, she says, companies just want to move on and don’t want their names in the limelight. They contact a forensic accountant to find out if an employee is stealing and then resolve the problem by terminating employment.

Naturally, this means an employee still has no criminal record and is free to move on to another organization and commit workplace fraud there. Wickes described “red flags” that organizations can look for and also described methods that help deter embezzlement in the first place.

Several of the circumstances that can lead to embezzlement, like a long-time, trusted employee having sole control of the books, can be seen in Bonkoski’s case.

Patterns in embezzlement

According to the 2017 “Hiscox Embezzlement Study: A report on white-collar crime in America,” produced by Hiscox, a specialty insurance company that works with clients to manage and mitigate risks including employee theft, the average loss in cases of embezzlement is $1.13 million. Fifty-five percent of cases occur at companies with fewer than 100 employees. Fifty-one percent are committed by women, “but men are close behind.”

The median age of perpetrators is 48. Most long-running schemes involve one perpetrator acting alone, and 29 percent of employee theft schemes went on for more than five years. The longest-running scheme Hiscox found went on for 41 years.

The model of the “Fraud Triangle” has been around for years and years, said Wickes. This model describes three factors that have to be present to make someone embezzle:

• Perceived pressure: Pressures might be work-related or personal, Wickes said. They can include a gambling addiction or extramarital affair; financial pressures, from greed to personal debt; or the death of the main breadwinner in the embezzler’s family;
• Perceived opportunity: This is a feeling that no one is watching, Wickes said, or a sense that it would be possible to conceal fraud. In some cases, people may have observed that, when others in the organization have engaged in unethical behavior, it has gone unpunished; and
• Rationalization: The third element in the triangle is rationalization, in which a controller might think, “I’m just borrowing the money for now, and I’ll pay it back,” Wickes said. Alternatively, she said, an employee might think, “The company owes me, because I work so hard and I don’t get paid enough.” Once someone starts dabbling and they see that little things go unnoticed, it usually starts to snowball, Wickes said.

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