Case Study – Embezzlement

Challenge/Situation

A Goldin Peiser & Peiser, LLP client, a B2B service business, owed several quarters of payroll taxes and one day, the IRS showed up at its door to address the matter. When asked, the business’ in-house bookkeeper claimed she had paid all taxes on time, then left to go to lunch and never returned.

The problems didn’t end there. The business’ health insurer hadn’t been receiving premium payments for several months, even though the business’ books reflected those payments being made. As it turns out, the bookkeeper was writing premium checks to the insurer, endorsing them to herself, and then depositing them into her personal account. Making matters even worse, she acted similarly in endorsing several vendor payments to herself, then depositing those checks in her personal account.

In all, GPP estimated that the bookkeeper stole in excess of $150,000 from the business over a two-year period. For its part, the IRS demanded payment on all back taxes, plus penalties and interest.

Our Approach/Solution

The business owner contacted GPP for help. Our Accounting and Financial Services professionals stepped in and reconciled the business’ payroll for the past two years. Ultimately, we amended one-and-a-half years of the business’ payroll returns and pulled out the owner’s salary to reduce IRS penalties, interest and liability. We also communicated with IRS representatives throughout the process to keep them apprised of our approach and ensure their acceptance of it.

Results

The bookkeeper was found guilty of embezzlement. We now pay an on-site visit to our client twice monthly and handle all bookkeeping and CFO responsibilities for the business. Our client’s business recovered and has since thrived.


CONTACT US TODAY