Embezzlement, more professionally known as occupational fraud and abuse, is on the rise and very costly to corporations, insurance companies, and even taxpayers. The Association of Certified Fraud Examiners conducted a study in 1996 known as The Wells Report. The Wells Report concludes that “the average company loses about six percent of its gross revenues to all forms of occupational fraud and abuse. That staggering sum would mean an annual cost of more than $400 billion. This analysis will cover crimes of embezzlement, including two real life cases, one perpetrated on Narada Media by one of its chief financial officers and the other perpetrated on a physician-owned clinic by one of its plastic surgeons.
Wendell Doman seemed like the least likely suspect to have embezzled money from Narada Media, a New Age music company. A devout Mormon and father of seven, the 37-year-old chief financial officer of Narada Media was convicted of embezzling $1.13 million from the Milwaukee-based company (Strauss 1). Doman was not the typical profile of most embezzlers. He did not spend his stolen cash on spending sprees, mistresses, gambling, or drug addiction like many embezzlers. Instead, he squirreled most of the money away in Vanguard’s Growth and Income stock mutual fund. By the time investigators finally discovered Doman was the criminal, his funds had earned $206,000 in interest (Strauss 2).
Doman was able to steal more than one million dollars from the company by allocating funding for invoices to be paid to a fictitious company. His position in the company allowed for his theft to go undetected for more than two years until the FBI was called in to investigate a shortage where the company felt a surplus should have been. While the majority of embezzlement cases are not reported and some of those who are prosecuted get off with a basic slap-on-the-wrist after paying some kind of restitution, Doman was not so lucky, “A...