Second To Cash Receipts Is Payroll

Payroll fraud schemes have been coming up second to thefts of cash receipts in my experience. Here’s one from this week. It appears she has stolen from four different employers.

Thursday, October 23, 2008
KC woman gets five years for embezzlement
A Kansas City woman was sentenced Thursday to five years and five months in federal prison for embezzling from two former employers and stealing the identity of a customer of another of her former employers.

Kimberly McKay, 41, also will have to pay more than $33,000 in restitution after her May 7 guilty plea to federal charges of credit card fraud, wire fraud and identity theft.

By pleading guilty, McKay admitted to stealing more than $14,000 from Overland Park-based Commercial Floor Works Inc., where she worked in an administrative role in 2005. While there, she cut bogus payroll checks to herself to pay for personal items such as concert tickets, bills for her cell phone service and, a dating Web site.

In 2006, she went to work for Naturally Wired in Overland Park, where she used a client file to obtain enough personal information to apply for a credit card using the customer’s name. Federal prosecutors said she used the fraudulent card 98 times – once to pay for a trip to Las Vegas.

McKay also was accused of embezzling money from two other companies – Corvan Construction and Danco Painting.

Employers need to implement controls over payroll processing, and at the very minimum, need to review personally, or have someone independent of payroll processing, review the payroll registers and reports on a regular basis to both prevent payroll fraud and well as detect a problem as early as possible.