Fashioning a Fraud Case Study

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  • Topic: Fraud, Invoice, Reimbursement
  • Pages : 2 (616 words )
  • Download(s) : 351
  • Published : August 20, 2011
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In this article, Bobbie Jean Donnelly was a fraudster who used Travel and Expense reimbursements to defraud her company. Donnelly figured out how to manipulate her travel and expense reimbursements to eventually defraud her company of about $275,000. Had her company had proper controls in place for travel and expense reimbursements, wouldn’t have occurred to this magnitude. Donnelly was targeted in an internal investigation because she was one of three employees with the highest amounts of travel and expense reimbursements hers totaling, $115,000. One of the red flags in the case was the fact that Donnelly’s supervisor had only submitted $40,000 in travel and expense reimbursements that year. It turned out that Donnelly had been using several different schemes to accumulate such an outrageous amount of travel and expense reimbursements. The first of these schemes would be the mischaracterized expense reimbursements scheme. The flow of fraudulent behavior follows Exhibit 7-4 in Wells text. Donnelly incurs a non-business expense such as a personal flight to Italy. She prepares the expense report for the flight and attaches the receipt to the expense report, which needs verification from a supervisor. She then forges the signature of her supervisor and sends the expense report to accounts payable. A check is issued to Donnelly to reimburse the expense and the expense is coded to “travel and entertainment.” Without proper controls of which and for how much T&E expenses will be reimbursed with reasonable limits, it is easy to mischaracterize an expense. Donnelly also used fictitious expense reimbursements schemes to defraud her company. This type of scheme follows Exhibit 7-6 in Wells’ text. Donnelly prepares a report claiming a fictitious expense such as samples. Donnelly would use a credit card statement as her supporting document and then again forge her supervisor’s signature to gain approval. The expense report is sent to accounts payable and a check is issued...
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