Thanks for the warning. Bookkeeping fraud happens somewhere everyday and the honest owners most often believe this could not happen to them. Relatives are often the worse because they are so trusted.
At one time I was a financial recruiter in San Francisco and moved employees between the big 8 CPA firms at the time and private industry.
I heard many employee related horror stories including embezzlement in the accounting department.
The most disturbing form of theft occurred when a bookkeeper chose not to pay the business taxes and divert receivables into her own personal account.
She had been skimming the "traditional" 10% when the owners became concerned with the sluggish economy and her position was suddenly at risk. If the profits continued to dive, an owners wife would return, take over the bookkeeping job and the employee would be out of work.
To offset the slumping net, she began reducing the amount of employee contribution taxes and ignored others completely. The busy owners would simply glance at the paper work, sign and mail the checks to the IRS.
One day she announced her intent to leave and live with her aging mother out of state. They even held a going-away party for her. Two weeks after cleaning out her desk, the IRS walked in to do an audit.
In the end, the company owed over $250,000.00 in back taxes plus penalties and interest. That is not the money she took. Her 10% amounted to only $2,000.00 to $3,000.00 a month over a three year period.
That's what is scary. The money she took was nothing compared to the unpaid taxes the owners now owed.
In fact, I have heard of bookkeepers not taking a dime but failing to paying taxes to maintain the illusion that the owner can afford to keep the employee on the books.
The owners did not have the money and eventually sold off everything they had to meet this new obligation. This included their personal property.
The bookkeeper was never found and so what! Even when embezzlement can be proven, the local District Attorney finds these cases a nuisance when compared to crimes involving bodily injury.
Thanks again Berry.