Go Back   DealershipForum.com > Regional Forums > Northwest Region > Automotive Discussions

Notices

Reply
 
Thread Tools Display Modes
Old 01-19-2010, 12:46 PM   #1
XDCX
Administrator
 
Join Date: Nov 2007
Posts: 14,869
Default 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.
XDCX is offline   Reply With Quote
Old 01-19-2010, 04:10 PM   #2
MARV
Member
 
Join Date: Jan 2009
Posts: 85
Default

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.
MARV is offline   Reply With Quote
Old 01-19-2010, 04:24 PM   #3
XDCX
Administrator
 
Join Date: Nov 2007
Posts: 14,869
Default

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.
XDCX is offline   Reply With Quote
Old 01-20-2010, 06:16 AM   #4
SHACOS
Super Moderator
 
Join Date: Jan 2008
Posts: 838
Default

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!
SHACOS is offline   Reply With Quote
Old 01-20-2010, 07:20 AM   #5
XDCX
Administrator
 
Join Date: Nov 2007
Posts: 14,869
Default

Quote:
Originally Posted by SHACOS View Post
It's amazing how many smaller family run dealerships trust their employees to do EVERYTHING!
I was hoping you'd see this thread.

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.

Quote:
Originally Posted by SHACOS View Post
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!
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.
XDCX is offline   Reply With Quote
Old 01-20-2010, 10:36 AM   #6
crowe
Senior Member
 
Join Date: Oct 2008
Posts: 626
Default

Quote:
Originally Posted by SHACOS View Post
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!
Looks like there’s a market for your services!

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
crowe is offline   Reply With Quote
Old 01-20-2010, 11:14 AM   #7
SHACOS
Super Moderator
 
Join Date: Jan 2008
Posts: 838
Default

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.
SHACOS is offline   Reply With Quote
Old 01-20-2010, 01:18 PM   #8
XDCX
Administrator
 
Join Date: Nov 2007
Posts: 14,869
Default

Quote:
Originally Posted by crowe View Post
How much money do you have to have before you don’t miss multipliable 100k + withdrawals?
That's incredible - it must be nice to be making so much money that it takes years before you figure out over $1 Million has been skimmed from the top.

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.
XDCX is offline   Reply With Quote
Old 01-20-2010, 04:59 PM   #9
Slo
Member
 
Join Date: Oct 2008
Posts: 52
Default

Quote:
Originally Posted by crowe View Post
How much money do you have to have before you don’t miss multipliable 100k + withdrawals?
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
Slo is offline   Reply With Quote
Old 01-21-2010, 05:25 AM   #10
zohpy
Senior Member
 
Join Date: Jan 2009
Posts: 119
Default

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.
zohpy is offline   Reply With Quote
Old 01-22-2010, 10:02 AM   #11
XDCX
Administrator
 
Join Date: Nov 2007
Posts: 14,869
Default 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.
XDCX is offline   Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
Lithia Motors get $200 Million line of credit for expansion XDCX Automotive Discussions 7 10-18-2011 01:17 PM
Is 200,000 Miles the new 100,000? XDCX Automotive Discussions 11 06-18-2010 06:23 AM
Chrysler's Employee/Dealership Employee Incentives XDCX Sales 5 10-24-2008 09:03 AM
Stories of Employee Theft and Lies XDCX Automotive Discussions 8 05-14-2008 11:30 AM


All times are GMT -7. The time now is 01:09 AM.


Powered by vBulletin® Version 3.8.5
Copyright ©2000 - 2024, Jelsoft Enterprises Ltd.
Copyright DealershipForum.com - 2008 - 2016