The former manager of Nellie's Southern Kitchen is accused of embezzling nearly a quarter of a million dollars.

The 53-year-old defendant was charged with five felony counts of "embezzlement by an employee" following an investigation of transactions made between June 2016 and March 2020.

In a press release, Belmont, North Carolina Police said that the defendant, the restaurant's manager at the time, embezzled proceeds from food and alcohol sales. Records show the defendant withdrew $251,986 from the account when only $28,798.47 was required to cover unpaid tips, resulting in approximately $223,187.53 in unaccounted cash withdrawals.

Upon further investigation, the police stated they discovered at least $93,039 in cash was deposited into the accused's personal bank account in the same timeframe. He has been released on a $25,000 bond. "Former Nellie's Southern Kitchen employee arrested for embezzling" www.gastongazette.com (Nov. 25, 2024).

Commentary

This type of embezzlement is especially common in organizations that intake cash, including restaurants, certain service industries, and charitable entities.

Here are some ideas for limiting your exposure to embezzlement of cash:
 

• Develop, distribute, and enforce a policy promoting honesty and integrity and prohibiting embezzlement and employee theft. Have all employees acknowledge receipt and understanding of the written policy
• Develop and enforce standards of checks and balances regarding cash and cash equivalent management
• Train employees on your organization's standards for managing cash, gift cards/certificates, and other cash equivalents
• Avoid providing authority over management of cash/gift cards and cash equivalent to one person without oversight or frequent review
• Create a system of oversight so multiple people can view and/or oversee how cash/gift cards and cash equivalents are managed
• If possible, use cameras to visually record all cash/gift card and cash equivalent transactions
• Review video footage when investigating reasonable suspicions of theft or embezzlement
• Disclose to employees that all transactions are visually recorded
• Perform due diligence, including criminal background checks, on all employees who will have access to organization or customer cash, gift cards, and cash equivalents
• Do not allow employees with a history of embezzlement, fraud, or other fidelity crimes to handle or manage cash/gift cards or cash equivalents
• Use an up-to-date accounting software program that allows your organization to track cash/gift card and cash equivalent transactions and to flag your organization for unusual gift card, gift certificate, or equivalent transactions
• Use an up-to-date and secure online banking system that allows your organization and plan participants to easily and safely monitor all cash deposits including receipts of cash deposits
• Require that receipts be offered for any purchase and/or cash/gift card or cash equivalent transaction
• Investigate all complaints from customers, employees, or others of not being offered a receipt or short-changed; of demands or requests to be paid in cash; of being charged an additional fee if not paid in cash or provided a discount if paid in cash; or that a cash payment was not properly deposited in a cash drawer or box
• Investigate cash drawers or equivalent that fail to balance repeatedly and/or over a certain amount
• Require cash drawers and registers to be counted and tracked at the end of each shift
• Record every transaction immediately, including cash/gift card payments, cash refunds, credits provided in cash/gift cards, and/or refunds or discounts for paying in cash
• Investigate unexpected, unauthorized and/or excessive cash refunds
• Prohibit the paying of cash in exchange for gift cards and/or cash equivalents unless approved by the organization
• Investigate excessive gift card and/or cash equivalent use by employees, employee family members, and/or known employee acquaintances
• Have a system to activate gift cards and/or cash equivalents before use and a system to deactivate gift cards and/or cash equivalents when used so they cannot be used again
• Prohibit the resale of gift cards and/or the cash equivalent. Investigate any complaints that employees and/or other workplace participants are selling gift cards and/or cash equivalents outside the organization
• Hire a secure and bonded third party to transit all cash from the organization for deposit or delivery
• Place a limit on the amount of petty cash available at one time. Prohibit replenishing petty cash with more than the limit
• Keep all petty cash secure, under lock, and limit access. Have authorized employees sign off on use of petty cash before allocating
• Prohibit the use of petty cash for personal purchases
• Investigate excessive or frequent withdraws from petty cash
• Ensure different employees are involved in different aspects of managing organization finances including withdrawing cash, making cash deposits, and reconciling bank statements
• Provide a means for employees, customers, and other workplace participants to report suspicions of wrongdoing - including employee embezzlement and/or theft - easily, safely, and without retaliation
• Consider a third-party mechanism for employees and other workplace participants to anonymously report suspicions of wrongdoing, including embezzlement or theft of cash/gift cards or cash equivalents
• If embezzlement or fraud is detected or reasonably suspected, consult legal counsel immediately
• 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 embezzlement, fraud, or other fidelity crimes without seeking information from law enforcement and advice from an attorney