01-19-2010, 12:46 PM | #1 |
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Former Underriner Motors employee charged in theft of $200,000
News reports indicate a former employee of Underriner Motors has been charged in the theft of over $200,000 from the dealership. For the full report - click here
As I understand it, the defendant was responsible for cashiering, accounts payable and making bank deposits. The indictment alleges the defendant defrauded the dealership by taking cash deposits and hiding the losses by making false entries into the company’s books and understating the amount of deposited checks. The scheme went on for over three years. While I'm not an accounting expert, shouldn't this have been caught sooner than three years after the scheme started? Unless she had the ability to write-off balances, you'd think the $200K shortage would show up as aged receivables. |
01-19-2010, 04:10 PM | #2 |
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Know of a similar situation nearby. New car franchise that's been around since the 60's. Comptroller was doing pretty much the same thing. Handling the deposits and adjusting them on the way to the bank while pocketing the difference. She hid it by adjusting every deal $125 claiming some doc fee existed internally and management bought it. When she bought this huge home (larger than the dealer's) on a nearby lake and several new cars her answer to where the money suddenly came from was that a deceased relative willed it to her. The dealer became suspicious and called the GBI who investigated and nailed her but not for all she had allegedly stolen since one of the stores mysteriously burned to the ground with the records.
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01-19-2010, 04:24 PM | #3 |
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MARV - great story, thanks for sharing.
I like threads like this because I think it serves as a great reminder about the need for "checks and balances." It seems like almost every dealer who's been in the business for 20+ years has a story about embezzlement - I think it's way more common than most people think. |
01-20-2010, 06:16 AM | #4 |
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It's amazing how many smaller family run dealerships trust their employees to do EVERYTHING! I have a friend who just started as an OM in a dealerships and they said the previous OM was allowed to do everything. This is definately how $200K can go missing without anyone noticing.
I think there is a career opprotunity for me to consult on proper segregation of duties within these family run stores and I would only charge half of the theft! |
01-20-2010, 07:20 AM | #5 | |
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Quote:
While I don't know the details of this case it's reasonable to think the employee had access to EVERYTHING and made adjustments to the AR schedule. It's a great concept, but I wonder how many dealers think they're vulnerable to embezzlement? It seems like everytime I read one of these stories the dealer reports they never would have suspected the individual of theft. It's the trust factor that makes them vulnerable and the trust factor that prevents them from seeking out advise on how to set up their operations. |
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01-20-2010, 10:36 AM | #6 | |
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Quote:
In our area recently an office manager was charged with embezzling more than a million dollars from a Toyota dealership. How much money do you have to have before you don’t miss multipliable 100k + withdrawals? http://www.mtairynews.com/pages/full...home_news_lead |
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01-20-2010, 11:14 AM | #7 |
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I think it takes one or two meetings to explain the implications of having too much trust for your management level employees. I think it's important to have a least a minimal control structure, especially when your dealing with large sums of money that flow in and out of dealerships everyday.
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01-20-2010, 01:18 PM | #8 | |
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I think it's stories like these that give consumers the impression that car dealers are filthy-rich and there's $4,000 of mark-up between Invoice and MSRP. |
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01-20-2010, 04:59 PM | #9 |
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It's amazing how many dealer principals have absolutely no idea of godd business management practices. The first thing to do is have an independent audit at least once a year....
Last edited by XDCX; 01-20-2010 at 08:39 PM. Reason: Fixed quote tag |
01-21-2010, 05:25 AM | #10 |
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I worked at a Cadillac Dealership in Miami about 15 years ago that had the same thing happen. Two young ladies involved that stole what was extimated to be about 300k. They worked in payables and receivables and also handled cashier duties for lunch breaks, shift changes ect... It was Miami so there was always a large amount of cash involved. They were going through a computer change at the time so it was actually pretty easy for them to explain away discrepencies. I will never forget watching those two young mothers being led through the dealership in handcuffs. The DP was a softie and let them get off with restitution. I'm sure he's never collected a dime.
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01-22-2010, 10:02 AM | #11 |
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Controller used fake VIN numbers to hide embezzlement
I recall hearing a story where a controller used fake VIN numbers to keep her embezzlement activities hidden while she continued to bilk the dealership.
The controller would create fake VIN numbers and floor the vehicles with the bank so the dealership remained solvent. She would pay-off the vehicles just before a flooring check to avoid any suspicion. The dealer was so detached from his business that he didn't discover the embezzlement until he decided he wanted to expand his business and found out he was broke. |
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