Living Large on the Company Dime
Employee theft claims are regular occurrences among our insureds, certainly more common than hurricanes. Yet, so many employers believe these types of claims cannot happen to them. You see they do not employe anyone they do not trust. They have safeguards in place. They do not keep that much cash on hand, etc. They need employee theft coverage. If they have it, they need to increase their limits. Here are two good examples from sophisticated large corporations. First, MillerCoors:
MillerCoors has sued two former marketing executives, and several other people, accusing them of embezzling more than $10 million from the brewing company through phony invoices for undelivered services over at least 13 years.
The lawsuit, filed last week in Milwaukee County Circuit Court, names as defendants former executives David Colletti and Paul Edwards, a dozen other people and 15 companies in several other states.
It claims Colletti, of Oconomowoc, conspired with the others to bill Miller Brewing and MillerCoors for a variety of fraudulently claimed goods and services, and shared the payouts.
The scheme avoided detection until 2013 because Colletti directed the payments from an internal budget he controlled, according to the suit.
A former San Diego-based Hewlett Packard employee has pleaded guilty to stealing nearly $1 million in company funds to fuel a lofty personal shopping spree that included spa and resort visits, international airfare, Apple products and trips to Nordstrom.
Coulman, however, used the cards to maintain a lavish lifestyle, using them to fund international trips, country club expenses and high-end clothing purchases. Court documents said she then falsely claimed those purchases as legitimate business expenses.
In all, Coulman allegedly stole approximately $954,292.31 from HP.
Her shopping spree tab included spending more than $100,000 at the La Costa Resort Spa and more than $43,000 at the Lodge at Pebble Beach and Casa Palermo at Pebble Beach. She also spent thousands at the Apple Store, Neiman-Marcus and Nordstrom. She also purchased more than $33,000 in motocross gear, according to prosecutors.
$33,000 in motorcross gear? Seriously? These are two classic examples of employee theft that has nothing to do with stealing cash or robbing bank accounts. The MillerCoors exec set up dummy vendors. This can be very difficult to spot in an organization with many different vendors constantly billing the company. The HP exec assistant was using corporate credit cards and then intercepting emails from the accounting department to her boss to avoid discovery. Both theives were using the complexity of their employers systems to their advantage. The amounts stolen are also staggering.
There is no word on how the HP employee was discovered. At MillerCoors, the heroes were in the accounting department and how they connected the address of the vendor to the address of one of the executives.