Children and teens have once again discovered an unintended use for a common household product, following the likes of White-Out^TM, ReadiWhip^TM, Preparation H^TM and Mucinex-D^TM, leading to global warnings to educate parents of the risks associated with – if you can believe it – drinking hand sanitizers.

Most waterless sanitizers contain around 65 percent alcohol.  Compared to the alcohol content of most beers (three to 10 percent) and wines (16 to 22 percent), these little, seemingly harmless bottles of clear, jell-like cleaners found in most homes, schools, grocery stores, restaurants, medical offices, and public meeting venues, boast an alcohol level three- to four-times greater than most commercially available consumable alcoholic beverages.

Easy access to Purell^TM, with its high alcohol content, and readily available on-line instructions on how to separate the alcohol from the jell solution, create the massive awareness and accompanying lure of these products.

Today, most parents know of the risks associated with the potential for abuse of cough medicines, mouthwashes, and almost any other product containing any type of alcohol, should a teen attempt to use common products to get high or drunk.

Experimentation with new products proves a leading motivator to identifying new methods of abuse, and emergency room staffs frequently first encounter these newly identified risks.  Such proves the case with Children’s Hospital of Los Angeles in the issue associated with Purell ^TM.

Unfortunately, most of the commonly abused products exist as mainstay items found in nearly every household, and returning to life without these products could prove difficult.   But not always…

A similar product-abuse issue occurred involving the canned gas products used to clean computer keyboards.  Children inhaled the bottled gas to get high, and it completely filled their lungs, thus displacing their lungs’ capacity to exchange oxygen.

The manufacturers responded by issuing cautionary warnings recommending parents to remove canned-gas products from their households.  In many cases, children died by suffocating as the gas, heavier than oxygen,  could not be exhaled from the child’s lungs.  In our home, we locked up our canister, and we never bought another once we emptied it.

On-line search revealing the illicit “consumption” of hand sanitizers did not begin producing results specific only  to 2012.  I found articles dating back as early as 2007 highlighting the risks associated with abusing Purell ^TM and I warned parents to store these products safely.

Here’s a link to a recent article I found on the “Purell Syndrome”:

http://newyork.cbslocal.com/2012/04/24/dangerous-trend-teens-drinking-hand-sanitizer-to-get-drunk/

Unfortunately, you can easily find many more on Google. In a second Google search, using search the search term “distilling Purell” I found it incredibly easy to gain access to information on how to separate the alcohol from Purell ^TM, as follows:

http://uk.answers.yahoo.com/question/index?qid=20120428122750AABETnK

As always, “Forewarned is forearmed.”

• Ex-ICE Intelligence Chief Pleads Guilty to Embezzlement
• Dixon, Illinois Comptroller Allegedly Embezzled $30 Million To Fund Horse Breeding Business
• State of Okla. charges former, current City of Cleveland employees with embezzlement
• Jail for woman accused of embezzling from Jensen’s Animal Hospital
• Former Tea Fire Department treasurer pleads not guilty to embezzlement
• Former Macomb County sheriff’s deputy with embezzling funds from Romeo Lions Club
• Church bookkeeper accused of theft
• Parish mgr charged in 2nd embezzlement
• Guilty plea in youth hockey embezzlement case

Thus the age-old question: Are more people stealing today, or have we become better at detecting it?

Regardless of which school of thought you subscribe, one thing appears obvious to me:  I am observing more incidents of such theft occurring  than ever in my 23 years “in the business.”

I base my conclusion not upon how many cases I have investigated recently, but by the sheer number of Google Alerts^TM I receive daily based on the search term “embezzlement.”  The trend for the past two years provides between 12 and 20 alerts, each and every day, and, when you consider only one in nine of such matters ever becomes public, that extrapolates to a range of between 108 and 180 instances, daily!

The frequency of thefts wherein individuals violate their positions of trust for personal gain, coupled with the wide range of unexpected and non-traditional contexts for embezzlements, should sound alarms and send warning signals to each and every employer to ensure controls exist and operate as designed to prevent and detect thefts.

Beyond the traditional contexts of for-profit, not-for-profit, and governmental employers safeguarding assets from employee theft, risk exists within every organization of every type and size.

Most everyone belongs to some interest group or committee, religious organization, scout troop, club, or sports program.  Each and every entity requires some element of finance, sometimes significant, and other times inconsequential in amount.  However, every single one that exists involves some level of funds entrusted to someone, often a volunteer, to safeguard, maintain, use, track, and report for the sole benefit of the entity, whatever the group’s purpose or mission.

The sampling of headlines above demonstrates that no one exists above suspicion, and therefore building a system on internal controls based upon “trust” constitutes a recipe for potential disaster.  All too often, the person least suspicious, glowing with the illusion of trustworthiness, ends up the same individual who diverts unimaginable amounts of funds, resulting in a financial crisis for the organization.

We’ve issued warnings for years.  The time for you to act is now.  Don’t stand on the sidelines hoping someone else will take action and addresses this issue.  To ensure you, your clients, and your organizations will not fall victim to theft and embezzlement, start today by asking questions about internal controls.

One measure you can take immediately as your first step in this process: review your insurance policies to ensure your company, organization or group carries adequate insurance in the event of theft or embezzlement.  Anything less than $100,000 may prove insufficient given today’s thefts, where amounts reach into the hundreds of thousands and millions of dollars.  Enlist the assistance of your agent to determine your group’s adequacy of coverage.

Given the current economic climate, and the potential for financial fraud, we must remember the words of the late Ronald Reagan: “Trust, but verify.”  As always, remain vigilant.

Here’s a link to an interesting (and tragic) story out of Oklahoma where a convicted embezzler recently murdered her husband, buried his body in the back yard, and planted a flower garden over where he was buried:

http://www.wesh.com/r/30874828/detail.html

“Kentucky woman pleads guilty to embezzling from Little Sisters of the Poor, Facing Prison Time.”
“A former bookkeeper for the Little Sisters of the Poor pleaded guilty Monday to embezzling more than $300,000 from the charity and using the money to buy herself a new car, among other items. She pilfered $364,135 from the charitable organization by forging the names of nuns in writing 43 checks on the organization’s account between April 2010 and November 2011. Little Sisters of the Poor, who operate St. Joseph’s Home for the Aged in Louisville, called police to report suspicions that Montfort was embezzling from the organization.”

BRETT BARROUQUERE Associated Press

http://www.greenfieldreporter.com/view/story/72109507c7464ef9b3b7cf27e7004731/US–Little-Sisters-Embezzlement

In one story that appeared recently, a woman facing her daily challenges of several issues, one of which being recently charged with embezzling funds, ended her own life (at age 45), leaving behind her mother and her daughter:

Former mayor of Spencer Alicia Bean commits suicide

www.salisburypost.com

Just a few weeks ago an employee of a nearby hospital was terminated from his employment.  Stress and anger led him to go home, retrieve a firearm, and return to the hospital, shooting both individuals involved in his termination.

2 Reported Shot at Conn. Hospital, 1 Arrest

www.nbcnewyork.com

A few months back a single mother being investigated for potentially embezzling funds from her employer, a local medical practice, went home one night, shot and killed her young son, then shot and killed herself, tragically ending two young lives.

During the summer 2010, a driver for a nearby beer distributor was brought in for termination, the result of being caught on film stealing beer from his truck.  After he resigned, he retrieved one of two firearms within his unattended lunchbox, shot ten people (eight fatally), then killed himself.

A driver called into a disciplinary meeting at Hartford Distributors in Manchester, Ct., opened fire on employees at the busiest time of the day Tuesday, police say.

www.csmonitor.com

Such sad and tragic endings, and in many cases, at such a young age.

Unfortunately, people often have no idea how much pressure and stress someone is under, even a close friend, co-worker or family member, or when someone has reached their breaking point, until it is too late.  In the context of employee theft and embezzlement, it is infrequent but no uncommon for an individual facing prosecution and public humility once their thefts become known, to choose to end their life (and possibly the lives of others around them) rather than face the potential consequences of their actions, consequences that may or may not include jail time.

Although stealing is wrong, and the individual who chooses to cross the line of trust should be held accountable for their decisions as well as their actions, turning to violence or suicide does not seem to be the solution.  It is so tragic and unfortunate that the individual could not recognize once they took responsibility for their actions, dealt with their consequences, and prepared to moved on, they had so much more to live for in their life.

If you know of someone who may be under significant stress, duress or struggling financially, please be sure to reach out to them and ensure they are safe.  If they need help, get them help.  With more people watching for the warning signs and willing to help someone in crises, more of these ever growing tragedies can possibly be prevented.

I learned planning to have your body frozen (suspended) is quite involved, much like any estate planning.  Individuals seeking this potentially life-extending option must not only complete forms, they must also have the means (funds) to pay for the service.  Family is often well aware of their loved ones’ desire to be maintained post death.

In talking with the staff, I learned that many of their client’s planning have been fulfilled without issue.  In some cases, however,  insufficient timing between a client’s death and recovery of their body prevented their client’s sususpension.

The cases that surprised me (but shouldn’t have surprised me) were the ones they described where the actions of a client’s family prevented the agency from carrying out the planning and wishes of their client.  Specifically, loved ones of clients driven by personal greed, failed to notify the facility of the imminent death and/or actual death, and worse, had their loved one’s body immediately creamated, to ensure there could be no chance of carrying out the costly measure of freezing their body in suspension (leaving all the funds for the client’s beneficiaries rather than to pay for cyrogenics).

The end result in relying on your loved ones - your loved ones take all your funds, and your wishes to be frozen and someday brought back – never carried out – forever!

Just got to love our society at times, and what money does to people, including family.

I asked the cashier how she knew it was me.  She had no response. I asked her what would prevent me from sharing my card to gain access, and my bar code with all my friends and family, by simply placing my bar code on all of their phones as well.  She had no answer.  I asked her why any of my friends or family should spend the $35 per person obtaining their own membership card, when they could flash my card to access the store, and use my bar code scanned into their phones to check out.  Once again, no answer, just a blank stare at me (as if I were speaking a foreign language).

What I can not understand is why this well known national membership club has not thought about the negative impact scanning a shopper’s cell phone screen could have on the store’s membership income.  A simple control would require the shopper to provide some form of picture identification, which would allow the cashier to compare the scanned card’s information to the shopper standing right in front of them.

Makes me wonder how much thought is being devoted towards controls and anti-fraud measures as new apps and processes are introduced.

Our local library, risking the loss of borrowed books and movies, enabled scanning patron’s library cards off patron’s smart phone screens.  However, when they scan the card’s bar code, the picture of the patron appears on their screen, allowing them to compare the card’s photo with the patron using the card’s bar code.  A local library with no revenue at stake figured that out, but a national membership club did not?

As I see more and more technology and automation implemented within our daily lives, I challenge the implementations to see what if any controls have been contemplated to minimize the potential for fraud within the process.    For example, I have issues with the self-scanning registers nearly every time I use them in the grocery stores, most often with scanned products appearing as the wrong items or with the wrong prices.  Automation does not equate to accuracy in my experience.  I have prevailed every time I have pointed out the discrepancies to management.  What about all the other shoppers who never noticed discrepancies on their orders

Fraud will only continue, and unfortunately as more processes are automated through apps, iphones, ipads, blackberries and other hand-held devices, I suspect the nature and frequency of fraud will only increase.

Tonight’s episode – The team probes the death of a woman whose dot.com company crashed.

Sitting around the table, reviewing a table covered in financial documents relating to potential insider trading (short selling) of the victim company’s stock

Investigator Danny Pino (Scotty Valens) says, “can’t we call some forensic accountants to read this stuff?’  The other investigator Thom Barry (Will Jeffries) replies (moaning), “these are worse than those poems last year.”

Great stuff – for us forensic accountants.  Job security.

Here’s a link to the show’s website:  www.cbs.com

Access – allowing those authorized to have access, anytime, anywhere, and even more importantly, keeping those who are not authorized from accessing it.  The safeguards (both systemic system controls and manual-based policies and procedures) will dictate how strong the system will be, but how these controls, policies and procedures are maintained on an ongoing basis is potentially even more important.  Systems change, personnel change, and non-compliance to any safeguard could result in best case scenario, unauthorized access to your systems and data, and worst case scenario, the compromise and theft of key valuable proprietary information.

Security – how secure is your data, the systems, and the uninterrupted continuity of both?  How are the systems and data secured both physically and electronically?  As with access, the system and manual controls implemented will dictate how strong security is over your information, but ongoing compliance (and assurance that compliance continues) are also critical.

Some issues I have yet to overcome to allow me to support the “Cloud” movement – 1) what happens if a dispute develops between the contracting business using cloud services, and the cloud provider?    Under the old in-house configuration, the business simply withheld payment to the outside IT folks, and found new IT solutions while the differences were resolved / litigated.  Under cloud-based solutions, the cloud provider could simply turn off access to their cloud-based systems (and data), holding all the leverage towards resolving the dispute.  Relationship good – switched on, and relationship goes sour – switched off (no one has access to anything).

2) Today’s denial of service attacks on websites in response to the US Government’s abrupt shutting down and taking over www.megaupload’s website identify two genuine risks to access and security of your on-line systems and information. First, what if your business relied heavily on moving files back and forth between locations, sites, countries… using www.megaupload’s site.  The government’s decision to abruptly shut-down the company’s website service and business directly impacted your access to the files stored, or in transition, let alone having you find another solution to continue running your business.  Could the government do something similar to any web-based giant many businesses rely upon, sites like Google?  Who knows?  The fact is, abruptly today, with no notice for planning, the government shut the site and business down, ending all communications with it, resulting in holding all the leverage in resolving any issues the government had with the organization or its practices.  All the while, the megaupload’s business will remain closed, and any business or individual who used it will be left out, looking in from the outside.  It is similar to when the FDIC abruptly takes control over a financial institution – an abrupt closing, with no notice, leaving banking customers looking in through the doors wondering how and when they will ever gain access again to their funds.  One major difference history has shown is the banks tend to re-opened shortly after take-over, and the denial of access to funds is short lived.  When and if websites and internet-based solutions that are shut down will ever be open for access again is anyone’s guess.

3) Notwithstanding the government’s take-over, individuals and organizations with ill-will can also interfere with access and security to your systems and information.  Today’s denial of servcie attacks caused shut-downs of systems, preventing any access until the attacks were addressed.  How could a denial of access attack to your cloud provider’s system impact your access, your employee’s access, your customers’ and vendors’ access?  How much business would be lost if access to your systems and data was lost for even one business day?  The scenarios are not hard to imagine.  One cloud provider seeking more business could orchestrate a denial of access attack on a competitor’s cloud system, with the goal of luring the competitor’s customers over to their systems.  This type of “competitive” activity has always existed.  Why would anyone believe it wouldn’t within the electronic world?

Perhaps I am less open-minded to expanding into “cloud” solutions based on my experiences in forensic and litigation matters, where loyalties, contracts, duties, services, systems and data have been routinely violated regardless of the safeguards, controls, laws, regulations and consequences that existed.  In the end, today’s attacks continue to show me just how vulnerable businesses and individuals alike are, if they are heavily vested and reliant on solutions outside of their control for accessing and utilizing their systems and information.

Here’s an article relating to today’s attacks:

Go to cnn.com

First, how much investments could a firm manage or maintain to not miss $10.4 million dollars?  I am left wondering how this amount was not missed for over three years, and how controls that I would expect implemented by any investment firm did not prevent or detect this level of theft for such a long period.  Cases like this one makes me wonder just how many of these thefts are occurring today but have yet to be discovered, much like when I wrote something similar a year ago when this particular case was on-going and yet to be discovered.  Is also makes me wonder how many individuals who gamble regularly support their hobby or addiction with stolen funds.

Former company official admits embezzling $10.4M from northern NJ investment firm

NEWARK, N.J. — Federal prosecutors say a New Jersey man has admitted embezzling more than $10.4 million from the investment management firm where he served as chief financial officer.

Newmark’s lawyer, Michael B. Himmel, said his client has a “significant” gambling problem.

Thirty-nine-year-old David Newmark of Montville surrendered to authorities Wednesday and pleaded guilty to wire fraud and tax evasion charges. He faces up to 25 years in prison when he’s sentenced April 24 and also will have to make full restitution. Newmark stole the money from Short Hills-based Columbus Hill Capital Management. Prosecutors say he created a phony account to collect fraudulent deposits between February 2008 and March 2011 and diverted the funds to bank accounts he controlled.  Newmark’s lawyer, Michael B. Himmel, said his client has a “significant” gambling problem.

Click to read the article at therepublic.com

Another pattern I have been tracking is that no contexts seem to be immune.  Individuals with access and opportunity seem to be stealing everywhere possible.  I’m not saying everyone is stealing, because that is certainly not the case.  But I am saying a significant risk exists for theft or embezzlement within every business, entity, government agency, program, club, group, and every other type of organization that maintains funds, regardless of the nature, size and context of each potential victim organization.

I truly believe employee behavior is a leading indicator, often detected long before evidence of the actual diversion of funds has materialized.  Living beyond ones means seems to come up in many of the cases.  Know your employees, and for anyone who is a member of any social club, sports program or any other member organization, know who handles your finances and what controls are in place to safeguard your funds.

Below is a small sampling of Google Alerts received today alone:

Woman jailed for embezzling youth soccer funds (over $200,000)

http://www.vancouversun.com/business/Woman+jailed+embezzling+youth+soccer+funds/6006470/story.html

A local judge accused of embezzling court funds and other misdeeds could be removed from the bench

http://www.wxyz.com/dpp/news/a-local-judge-accused-of-embezzling-court-funds-and-other-misdeeds-must-answer-for-her-actions

Sentencing for Ira town clerk who admitted embezzling

http://www.wcax.com/story/16536416/sentencing-for-vt-clerk-who-admitted-embezzling

Former Tenderloin Housing Clinic Employee Sentenced For Embezzlement

http://sfappeal.com/news/2012/01/former-tenderloin-housing-clinic-employee-sentenced-for-embezzlement.php

A Kent County minister accused of embezzlement is due in court today.

http://www.wwmt.com/news/embezzlement-1400637-accused-minister.html
Former Shelby Schools superintendent charged with embezzlement

http://www.ludingtondailynews.com/news/63161-former-shelby-schools-superintendent-charged-with-embezzlement