I’ve talked before about the risk email scams pose to industrial distributors; but sometimes the area of greatest vulnerability is within your own organization…and it doesn’t matter whether you’re a large company or a small business. Just ask the former owners of Colorado Welding Supply, whose bookkeeper was found guilty of embezzling more than half a million dollars from the business just this past month.
According to the Colorado Gazette, Michele Bratcher was found guilty of “an extraordinary pattern of embezzlement.” Facing up to a possible 12 years in prison, Bratcher was sentenced to 18 months in a jail work-release program and 12 years of intensive probation, and will be forced to repay the nearly $600,000 she stole, plus interest.
While the sentence may appear light when compared with a potential 12-year prison sentence, it was formulated to allow her to begin repaying her former employers as soon as possible. Even so, it’s hard to imagine any sentence that could make up for what the former business owners say helped put the company out of business. “She ruined my life,” former owner Eric Younger told the Gazette. “It was my dream to open up a welding supply business.” Younger says he since been forced to return to work as a long-haul trucker.
Embezzlement is a grave situation for any business owner, but fortunately there are precautions that can be taken to reduce the risk. CPA Edward J. McMillan shared his professional advice in “Is Your Company Ripe For Embezzlement?” He points out that many embezzlement cases have two things in common:
- First, the embezzler was an employee above suspicion. In the case of Colorado Welding Supply, Bratcher was the daughter of a family friend, hired at that friend’s recommendation.
- Second, the company was not audited by an independent certified public accounting firm.
McMillan adds that simple steps, like requiring two signatures on checks, can keep employees honest. He uses real-life case studies to show how each company left itself vulnerable, and how each embezzler was caught.
It’s easy to think that embezzlement is something that could never happen to your business; but the case of Colorado Welding Supply just goes to show that embezzlement can happen to anyone, and it is happening in this very industry.