Controller embezzles over $10 Million from Pennsylvania Acura Dealership

XDCX · 05-08-2012, 10:26 AM

News reports indicate Partcia K. Smith, a controller at Baierl Acura, embezzled over $10 Million from the dealership over a span of six years that included over 800 fraudulent transactions. Here's a link to the news report - click here

In her position, Smith was responsible for balancing the dealership's accounts and had the ability to transfer funds between the dealer's various accounts. It's alleged she transferred money out of the dealer's operating account and placed the funds in a payroll account where she used the money to pay for items electronically. In the span of six years $1.8 Million was transferred to pay her American Express bill. Smith reportedly made about $53,000/year.

While I've created numerous threads about dealership embezzlement cases in the past this is the largest sum of money I've ever heard about.

Makes one wonder how a dealer could lose $10 Million over a period of six years and never even notice.

DealerEx · 05-08-2012, 01:25 PM

Quote:

Originally Posted by XDCX

While I've created numerous threads about dealership embezzlement cases in the past this is the largest sum of money I've ever heard about.

Makes one wonder how a dealer could lose $10 Million over a period of six years and never even notice.

My thoughts exactly...talk about well capitalized ! She was siphoning off $139,000 a MONTH on average for 10 years and nobody noticed the cash drain??? You'd have to be making a hell of a lot of net profit to cover that up!

57years · 05-08-2012, 02:28 PM

WHERE was management???? How could this happen?? I did see where a local dealer had $1M embezzled by a Comptroller, sould like a similar situation. I couldn't figure out how it happened to him. BUT $10 M??

XDCX · 05-09-2012, 12:11 PM

Quote:

Originally Posted by 57years

WHERE was management???? How could this happen?? I did see where a local dealer had $1M embezzled by a Comptroller, sould like a similar situation. I couldn't figure out how it happened to him. BUT $10 M??

I agree, $10 Million's a huge amount of money for a dealer to lose to embezzlement. The report did indicate the controller altered inventory reports, but unless the dealer was self-floored you'd think the fraudulent adjustments would be caught during a flooring audit.

I also read that the authorities think they'll only be able to recover $1 Million of the $10 Million that was embezzled. That means the person charged in this crime must have been living like a Rock Star if she could burn through $9 Million in that span of time. There had to have been a lot of people who must have been suspicious that something wasn't right.

DealerEx · 05-09-2012, 03:20 PM

Quote:

Originally Posted by XDCX

That means the person charged in this crime must have been living like a Rock Star if she could burn through $9 Million in that span of time. There had to have been a lot of people who must have been suspicious that something wasn't right.

$1.8 million for private jet charters
$44,500 for Super Bowl tickets and hospitality pkg.
$35,500 for a LUNCHEON for 6 PEOPLE...prepared by some food network star

Yep...I think that qualifies as living like a rock star! I just wonder how she explained all her trips and extravagant lifestyle (4 homes) to the people she was working with? Guess she told them she inherited 10 million...

XDCX · 05-10-2012, 11:27 AM

Quote:

Originally Posted by DealerEx

I just wonder how she explained all her trips and extravagant lifestyle (4 homes) to the people she was working with? Guess she told them she inherited 10 million...

There must have been a lot of people who knew something wasn't right but maybe they decided to look the other way since they were benefiting from this crime.

XDCX · 05-10-2012, 11:33 AM

I read a comment following one of the reports I read about this case and the individual commented - "This is why you never allow the person who balances the accounts to have check writing privileges."

When I first read the comment it seemed like good advice that any prudent dealer would follow. But the more I thought about it, I don't think the employee in this case ever wrote a check - all of her transactions were done electronically.

Which brings me to my question - Is it easier for an employee to embezzle from a dealership in our electronic age?

My guess is that it's not only a lot easier to embezzle, it's also easier to hide the evidence and keep the embezzlement going for a long time.

CL Pgh · 05-11-2012, 08:34 AM

Quote:

Originally Posted by DealerEx

I just wonder how she explained all her trips and extravagant lifestyle (4 homes) to the people she was working with?

It's worse than that! Time and again this individual was on the showroom buying vehicles for herself AND her relatives. Explain to me how an employee in YOUR office can be directly/financially tied into several car deals each and every year... and no one (inc. managers) questions where the money is coming from. Amazing story around here... and all the little pieces involved that aren't making the news.

steve_biegler · 05-08-2012, 03:17 PM

Trust........It will get you every time!

chevymike30 · 06-26-2012, 11:57 AM

Quote:

Originally Posted by steve_biegler

Trust........It will get you every time!

aint that the truth

steve_biegler · 06-26-2012, 12:05 PM

Quote:

Originally Posted by chevymike30

aint that the truth

Welcome to the Forum

Lots of great people here...Jump right in!

XDCX · 06-26-2012, 04:31 PM

Quote:

Originally Posted by chevymike30

aint that the truth

Quote:

Originally Posted by steve_biegler

Welcome to the Forum

Lots of great people here...Jump right in!

chevymike30 - First post - Welcome to DealershipForum.

Concerning steve's comment about trust, sadly it does ring true. I remember when I first started in the car business I wondered why so many of the older dealers were skeptical and suspicious. Over the years I've witnessed a lot of dealers get burned because they trusted an employee, their OEM, their flooring source, etc. and I can understand why some dealers have grown less trusting with time.

steve_biegler · 05-08-2012, 03:35 PM

Quote:

Originally Posted by XDCX

News reports indicate Partcia K. Smith, a controller at Baierl Acura, embezzled over $10 Million from the dealership over a span of six years that included over 800 fraudulent transactions. Here's a link to the news report - click here

Go to this article and read the comments following........and we wonder why people don't believe there is 21 bucks margin on a Dart?
.

XDCX · 05-09-2012, 12:18 PM

Quote:

Originally Posted by steve_biegler

Go to this article and read the comments following........and we wonder why people don't believe there is 21 bucks margin on a Dart?
.

That's a great point. Stories like these just feed the public impression that car dealers are swimming in profits and they're making thousands on every car deal.

57years · 05-15-2012, 02:02 PM

Probably just fired all the managers who knew what they were doing, cut the pension plan for other salaried workers, cancelled all loans from non officers, cut the pensioner health plan, turned the hourly pension plan over to the government, refesed to pay all the accounts payable where there was another vendor who provided the same service, all non transfer vendors were paid 33 cents on the dollar or go to h***, any account with a credit balance were reclaimed to zero, etc. But daily operations for the officers, salespersons, and customers were unaffected. SOUND FAMILIAR??

P.S. ALL DONE WITH A SMILE!

05-08-2012, 10:26 AM	#1
XDCX Administrator Join Date: Nov 2007 Posts: 14,869	Controller embezzles over $10 Million from Pennsylvania Acura Dealership News reports indicate Partcia K. Smith, a controller at Baierl Acura, embezzled over $10 Million from the dealership over a span of six years that included over 800 fraudulent transactions. Here's a link to the news report - click here In her position, Smith was responsible for balancing the dealership's accounts and had the ability to transfer funds between the dealer's various accounts. It's alleged she transferred money out of the dealer's operating account and placed the funds in a payroll account where she used the money to pay for items electronically. In the span of six years $1.8 Million was transferred to pay her American Express bill. Smith reportedly made about $53,000/year. While I've created numerous threads about dealership embezzlement cases in the past this is the largest sum of money I've ever heard about. Makes one wonder how a dealer could lose $10 Million over a period of six years and never even notice.

05-10-2012, 11:33 AM	#7
XDCX Administrator Join Date: Nov 2007 Posts: 14,869	Is it easier to embezzle in an electronic age? I read a comment following one of the reports I read about this case and the individual commented - "This is why you never allow the person who balances the accounts to have check writing privileges." When I first read the comment it seemed like good advice that any prudent dealer would follow. But the more I thought about it, I don't think the employee in this case ever wrote a check - all of her transactions were done electronically. Which brings me to my question - Is it easier for an employee to embezzle from a dealership in our electronic age? My guess is that it's not only a lot easier to embezzle, it's also easier to hide the evidence and keep the embezzlement going for a long time.

Similar Threads
Thread	Thread Starter	Forum	Replies	Last Post
$1 Million loan secures new Volkswagen Dealership for Davis	XDCX	Automotive Discussions	2	09-14-2010 09:51 AM
$2.25 Million per Dealership - U.S. Treasury write-off	XDCX	Sales	0	05-18-2009 07:28 AM
GMAC pulls Floorplan from two Pennsylvania Dealers	XDCX	Sales	8	02-07-2009 09:38 PM
Million Dollar Drug Bust at New Car Dealership	XDCX	Automotive Discussions	0	09-12-2008 08:50 AM
$20 Million upgrade to San Diego Toyota Dealership	XDCX	Sales	0	01-01-2008 11:13 PM

Welcome to DealershipForum.com

Click Here to Register Now

05-08-2012, 02:28 PM	#3
57years Senior Member Join Date: Sep 2009 Posts: 554	WHERE was management???? How could this happen?? I did see where a local dealer had $1M embezzled by a Comptroller, sould like a similar situation. I couldn't figure out how it happened to him. BUT $10 M??

05-08-2012, 03:17 PM	#9
steve_biegler Senior Member Join Date: May 2010 Posts: 1,498	Trust........It will get you every time!

05-15-2012, 02:02 PM	#15
57years Senior Member Join Date: Sep 2009 Posts: 554	Probably just fired all the managers who knew what they were doing, cut the pension plan for other salaried workers, cancelled all loans from non officers, cut the pensioner health plan, turned the hourly pension plan over to the government, refesed to pay all the accounts payable where there was another vendor who provided the same service, all non transfer vendors were paid 33 cents on the dollar or go to h***, any account with a credit balance were reclaimed to zero, etc. But daily operations for the officers, salespersons, and customers were unaffected. SOUND FAMILIAR?? P.S. ALL DONE WITH A SMILE!