On January 7, a former payroll supervisor was convicted in the Boston, MA, federal court of making, possessing, and uttering forged securities. Just four days after joining the accounting department of her new employer, the supervisor deposited the first in a long line of forged, and then stolen, payroll checks into her personal bank accounts. The forgery and theft continued for four and a half years before she was let go.

The scheme was executed in at least three different forms. In its most common form, the supervisor made routine requests of the employer's payroll check preparer to generate bogus, duplicate checks made payable to various museum employees, more than 200 over the duration of the scheme. Another approach was to direct the check preparer to prepare bogus checks, this time from tax withholding funds. A third method involved using the employer's manual payroll checkbook to handwrite checks made payable to various employees. She induced two authorized signatories on the account to endorse the checks by providing them with falsified back-up documentation.

Every employer should have security procedures in place in their payroll department to prevent this kind of fraud taking place. Under no circumstances should one person be able to raise checks without someone else examining and verifying the supporting documents.

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Further information:
www.usdoj.gov/usao/ma/presspage/Jan2005/Bartlett-Nicole-plea.htm