That Trusted Employee May Be Ripping You Off —MichelsonDecember 2010
As 2010 draws to a close, it's the perfect time to reflect on our many blessings. Some printers, though, won't be ringing in the new year with the typical holiday cheer. That's because their businesses suffered losses, and in some cases their demise, at the hands of "trusted" employees who embezzled large sums of money. We've reported a rash of cases this past year where CFOs, bookkeepers or other employees with financial authority were caught stealing hundreds of thousands of dollars or more from their companies.
In two cases, IP/Koke Printing in Eugene, OR, and Long Island City, NY-based Digital Ink, the embezzlements led directly to plant closures. IP/Koke's accounts payable clerk misappropriated $1.56 million from the company on more than 30 flights to Las Vegas, and for hotel stays, vacations and cruises. Yes, the perpetrator was found guilty and sentenced to 24 years in prison. But, that is of little solace to the printer's ownership and the 85 employees who lost their jobs. The same goes for Digital Ink, which closed after a finance department employee stole $750,000 via phony payroll checks made out to former staff members and phantom workers. Digital Ink owner Jamie Wollens told the New York Daily News that he also lost his home as a result, and complained it took prosecutors six months after he filed a police report to arrest the defendant, who was then released, without bail, to await a hearing. "She was out there, enjoying her life and spending my money," he lamented.
Toppan Printing, Somerset, NJ, also caught its controller with his hands in the cookie jar. David Hathaway set up a fake company and then wrote out 10 Toppan checks totalling more than $118,000. And, at Columbus, OH-based Nutis Press, a bookkeeper pilfered $597,000 from the personal accounts of the now-deceased owner Frank Nutis. Behemoth printers can fall victim, as well. In Canada, the former Worldcolor—after being alerted by its bank—thwarted an effort by a clerk in its accounts payable department to issue more than $240,000 in checks that were made out to fake vendors.
Industry suppliers are not immune to fraud, either. As reported on our news pages in this issue, the former CFO of the then-Pitman Co., plead guilty to wire fraud and tax evasion for embezzling $2 million from the New Jersey-based graphic arts distributor. John Eichner admitted to falsifying his expense reports from 2003 through 2009. Eichner appeared to have good taste and a penchant for the finer things in life. He turned in personal expenses that included stays at luxury hotels; clothing and jewelry from high-end retailers Nordstrom, Coach and Tiffany & Co.; and even wire transferred $30,000 directly from Pitman accounts to pay for cases of wine that he bought from Sotheby's.