Office manager accused of embezzeling funds.
Like the X files said. Trust no one!
Theft is an awful thing. Especially from an employee.
Pete
Wow, I thought they were a small company, how can you lose $200,000 without noticing something?
Ouch! I wonder what the impact of her actions has been on the availability of turnouts and other items if they found themselves struggling to make ends meet at times. Crandell
Someone did notice - apparently! 
Man that is saddening! Model railroad manufacturers are already experiencing uncertainties about their future viability in this rough economy, and here we have Micro Engineering getting torpedoed from the inside!
I wonder if the embezzler already spent the money or stashed most of it in some bank account, hedge fund, or investment group so that at least Micro Engineering could get some or most of its money back.
But if she did blow the funds, like a baby going through diapers, will Micro Engineering be able to write it off? $200,000 is a pretty big chunk of change for a small or medium sized business to lose to embezzlement, even over a gradual period.
Just remember this story the next time you are tempted to think the company owner is the greedy party.
More than likely she has spent the money. Unfortunately I doubt ME will ever be able to fully recoup what she has taken. Her immediate need for cash was most likely the impetus for her theivery. I wonder how much her actions affected the final sale price of ME products. Did the management at ME realize that they needed to raise the price of their products because they weren’t making enough margin, all the time not knowing that they were losing money from within? If so, as usual the consumer takes the brunt of it, in this case us model railroaders.
Her punishment should be to have to work for ME for free until she works off what she has stolen. She should be made to perform a simple task that won’t allow her access to any more means of theft and also so as to not disrupt manufacturing. Working in the packaging department stuffing turnouts into blister packs would be a good start. Once she’s paid off her debt to ME, then she should serve time to pay off her debt to society.
Losses from theft are tax deductable but not dollar for dollar and subject to limatations dpending on what kind of business entity they are.
“I wonder if the embezzler already spent the money or stashed most of it in some bank account, hedge fund, or investment group so that at least Micro Engineering could get some or most of its money back.”
You’ve got to be kidding. If she’s guilty, she needs to be locked up and as a business owner I wouldn’t want to see her face ever again…She couldn’t be trusted with the salt and pepper shakers in the break room.
“Her punishment should be to have to work for ME for free until she works off what she has stolen.”
There’s not a lot of detail in the article, but I agree that she’s probably already spent it. While there are lots of Bernie Madoff’s out there, more people who steal do it because they have an immediate need for cash, whether to feed their family, buy stuff the couldn’t otherwise afford, or feed some habit (drug, alcohol, or gambling).
While it’s easy to wonder how a small company could lose that amount of cash and not realize it, it’s actually the smaller companies that are more vulnerable. Separation of duties in a larger business would likely have prevented this (sometimes, people who wouldn’t otherwise be tempted succumb when they realize how easy their employer makes it). If she’s being reasonably cagey about it, so that the money isn’t just missing but is substantiated by bogus accounting entries – like inflating the cost of other, legitimate, expenditures to cover the missing amounts – it’s generally not obvious right away. I’m sure she took smaller amounts over a longer period of time, maybe getting caught when she got too greedy. She’d been there for 8 years… how long had this been going on? 7 and a half? That’s only about $2500 a month.
She probably took smaller amounts over some time rather than one big chunk at one time.
Actually the owners are partly in fault. As and accountant and bookkeeper for many small firms I always made sure the owners received the monthly bank statements and canceled checks unopened so they could see the transactions. Many time I would be given checks for amounts or vendors they did not recognize and show them the invoice that went with that check. So the proper controls were not in place to avoid this type stealing.
By the way when I was working in Alaska, my CPA caught the woman who stole $600,000 from the girl scouts cookie fund.
Rick
Kinda interesting note, ME is less than an hour drive from my house and Im positive I’ve seen the perp somewhere, probably Wall Mart. Small world.
That’s very true. The owners of small businesses usually aren’t accountants themselves. Often, it’s an esoteric art to them. A lot of times, though, they cut corners on accounting oversight and auditing to save a few bucks.
But it’s an absolute certainty, that even if she were taking small amounts over a long period of time, it probably would have been caught before this if someone was doing due diligence on the books.
One wonders how she was caught, and how long investigators watched her until the believed they had enough evidence to make an arrest.
This report on a local TV station gives some more details, and interviews Ron Rands the owner and founder’s son.
Model train manufacturer nearly pushed off the tracks by embezzlement
Gil, known as Bill somedays … [8D]
Wow, no wonder their stuff costs so much.
jwhitten:
I’m not a modeler, but your subject of modeling the South Pennsylvania RR catches my attention. It is a subject of interest of mine for probably back 70 years. Since knowing the Pennsy Turnpike was built {roughly}, using that route over the Alleghenies.