Ashley Sumner, a 39-year-old woman from Weymouth, Massachusetts, was sentenced to three and a half years in jail for embezzling more than $1.2 million from her employer, Allstate Auto Glass in Holbrook.

Sumner worked as an accountant for the company from 2020 to 2023. During her tenure, she had access to company credit cards and was responsible for payroll and paying company bills. Between January 2021 and February 2023, she conducted numerous unauthorized credit card charges, direct deposits, and wire transfers, diverting company funds for her personal use.

The fraudulent activities were discovered after company officials became suspicious and alerted Holbrook Police in March, initially suspecting a theft of $50,000. Following a five-month investigation, Sumner was arrested in August 2023. She pled guilty to a six-count indictment, which included two counts of larceny exceeding $1,200 as part of a single scheme, two counts of credit card misuse, and one count each of larceny involving property valued over $1,200 and money laundering.

Her sentence, handed down by Judge Mark Hallal, includes a maximum of two and a half years for one count of improper credit card use, followed by a consecutive one-year sentence for the second count. Additionally, Sumner will serve three years of probation after her release, and the court will determine the amount of restitution she must pay.

Source: https://www.yahoo.com/news/mass-accountant-gets-jail-time-212536410.html

Commentary

The above matter brings to light several significant issues within organization operations and financial oversight. The embezzlement noted above underscores the vulnerabilities that can exist when internal controls are weak or not diligently enforced.

First, entrusting a single employee with substantial financial responsibilities, such as managing payroll, credit cards, and bill payments, can create opportunities for fraud if there is insufficient oversight or segregation of duties.

Another issue is the delay in detection. In the above matter, the fraudulent activities went on for more than two years before being discovered, initially suspected to be a much smaller theft. This points to potential shortcomings in regular audits, reconciliations, and monitoring of financial transactions. It also highlights the importance of having robust systems in place for early detection of irregularities.

From a loss prevention standpoint, the loss illustrates the need for ongoing employee training, ethical standards, and a culture of accountability to prevent similar incidents in the future.

Finally, credit card fraud is a risk for any organization that uses them. Here is a checklist for lowering your exposure to credit card fraud:

• Develop, distribute, and enforce a policy promoting honesty and integrity and prohibiting embezzlement and employee theft. Have all employees acknowledge in writing their receipt and understanding of the policy
• Develop policies/procedures regarding the use of organization credit cards
• Strictly limit the number of credit cards issued
• Provide a credit card solely for the purpose of allowing an employee to perform his/her work more effectively
• Place a credit limit on each card
• Set the credit limit to the monthly credit amount the employee needs to perform his/her job effectively
• Employees issued a credit card should acknowledge by signature your policies/procedures regarding credit cards
• Employees should acknowledge in writing that an organizational credit card is a tool to assist with performance and not a benefit of employment or job-related perk
• List what is considered acceptable credit card purchases in your policy/procedures
• Require written pre-approval for any purchases outside the norm
• Require employees to acknowledge their credit card expenditures and provide an explanation of the expenditure, if necessary
• Prohibit the use of an organization credit card for personal expenses
• Prohibit employees from using credit card cash advances without approval
• Require original receipts for all purchases over certain amounts on organization credit cards within 30 days of purchase
• Require employees to immediately notify the organization and the credit card issuer if a card is lost, stolen, or compromised
• Consistently discipline employees that do not follow credit card policies/procedures including, but not limited to, suspending or terminating credit card privileges
• Perform due diligence on all employees issued credit cards, including criminal background checks
• Do not provide credit cards to employees with a history of embezzlement, fraud, or other fidelity crimes
• Review monthly all statements directly from the credit card issuer
• Do not allow employees to approve their own credit card expenses
• Designate a third-party unaffiliated employee to manage credit card expenditures including collecting receipts; reviewing statements; comparing receipts to the statements; making certain that purchases made were used for the benefit of the organization; and to flag any questionable purchases for management review
• Require management to review and approve all credit card purchases
• Set alerts to provide notices of credit card purchases
• Notify credit card issuers immediately when employees with organization credit cards are no longer employed; no longer granted authority to use a credit card; or when a card is reported lost or stolen
• Limit automatic payments via credit cards to vendors and closely monitor credit card activity to such vendors
• Closely monitor credit card expenses to identify suspicious or unusual purchasing activity
• Select a credit card issuer that provides online statements; allows for credit limits by card/employee; and provides for 24/7 monitoring, including spending alerts and fraud protection
• Closely review all credit issuer agreements to determine your exposure and responsibilities in case of fraud
• Provide a means for employees and others to report suspicions of wrongdoing - including employee embezzlement and/or theft - easily, safely, and without retaliation
• Consider a third-party mechanism for employees, vendors, and other workplace participants to anonymously report suspicions of credit card fraud
• Investigate all suspicious or unusual credit card expenses in a timely and professional manner
• If an investigation is warranted, use a person trained in investigating employee crime, theft, or embezzlement and/or a person experienced in forensic accounting
• If embezzlement or fraud is detected or reasonably suspected, consult legal counsel immediately
• Do not terminate a person or make accusations of fraud or other fidelity crimes without seeking information from law enforcement and advice from an attorney