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Fraud Leads to Prison for Employee

Fraud Leads To Prison For Employee

From time to time we assist clients with situations where one of their employees is found to have misused or misappropriated company resources for their own benefit.  For Tony File Roofing, an employee’s fraudulent behaviour set the company back by an amount of nearly $1m ($969,513).

Katarina Hollis had been employed since 2015.  It wasn’t until August of 2019 that an accountant discovered that Hollis, a part-time office administrator, had falsified accounts and had been directing funds, meant for genuine company payments, into her own accounts at two different banks since March 2016.

 

Hollis pleaded guilty to 42 charges, representative of 391 fraudulent transactions that she made during her employment.

 

All of the money had been spent, so Hollis was not in a position to repay any of it, and the victims noted that they felt she would rather do time than repay the money taken.  It was reported that Hollis had told police she “wanted more, felt she deserved more, saw others with more and wanted to give her family the best she could”.

 

The business endured “months on end of being unable to pay creditors” while the offending continued.

Mr File said, “She robbed everyone of a future and burdened us all with the unknown,”.

 

The judge noted that the offending was high level, regular, brazen, and enduring.  The judge refused to take remorse into account because it required insight, which Hollis lacked, he said.  Hollis was sentenced to three years, nine months in prison.

 

It’s important that businesses and organisations have systems and auditing practices in place so that there is less chance of this type of conduct occurring.  Does a second person sign off your payroll before it is sent to the bank?  How is petty cash and payment of creditors, ACC or IRD managed?  Some simple checks could mitigate the type of risk that this case addresses.

 

Reference: “Fraud leads to prison” article by Sarah Curtis.  Published February 07, 2020 11:40AM

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