Stories of Employee Theft and Lies

[XDCX]

Early on in my career I attended a Service Guild Meeting where the local police detective was the guest speaker. I was amazed when he indicated that one of the biggest theft problems for dealerships involved employees.

In fact, it was his opinion that dealerships lost more money due to employee theft than any other reason.

I'd like this to be an interactive thread - what are your stories?

I'll add some of mine to keep this thread alive.

[XDCX]

I remember one dealership where two salesmen and a young lady in the office worked together to steal from the "greenpeas."

The theory was that new salespeople wouldn't know the difference between a "full gross deal" and a "mini." When a new salesperson sold a vehicle and was entitled to a large voucher, the young lady would "adjust" the books and make it a "mini" deal.

The extra commissions were forwarded to the two salesmen that were in on the scam.

Because the total commissions paid matched the amount that was originally set-up in the deal, there was nothing to tip off management that there was a problem.

The scam lasted for over a year - most of the greenpeas left the dealership before someone eventually complained to mangement that they were getting shorted on their commissions.

[SHACOS]

I heard of one where a member of the Office staff was issuing checks made out to Cash to a bank using their 17 digit credit card number as a memo line on the check. They cashed the check and used it to payoff the mounting gambling debts on their credit cards.

[XDCX]

A dealership hired a young, good looking salesman to their sales staff.

After just a couple of months the new salesman was among the top performers while some of the store's veteran salesmen were in a slump.

It turns out that the new salesman was secretly dating the dealership's receptionist and convinced her to forward all the incoming phone calls for the sales department to him. He had complete control of the "phone - ups."

The General Sales Manager suspected that something was wrong and had his cousin call the dealership and ask for the sales department. The call went directly to the new salesman - BUSTED.

On a scale of 1 - 10 it's not a huge crime, but it's one that I'll never forget. The receptionist had been with the dealership for several years and did a fantastic job - I'd never had suspected that she would do something like this.

[XDCX]

There was a dealership where the Dealer Principal was well respected for being on top of every detail within his store. He ran an exceptional operation and knew every line of the Financial Statement by heart.

Because Cash Flow was super important to him, he watched the Warranty Schedule like a hawk - there was no valid excuse for a claim to to be in the 30 - 60 day column.

Faced with this pressure, the dealership's Warranty Manager started to falsify records to keep the Dealer Principal at bay. Her solution was simple - once the claim reached 28 days, she'd close the Repair Order and transfer the claim to a new Repair Order. The clock was reset to zero and the Warranty Schedule looked perfect.

Her scheme was successful and she was well regarded within the dealership for keeping on top of her job. The Office Manager and Dealer were so focused on the aging of the claims that they failed to notice the increase in the total dollars outstanding.

The scheme fell apart when some of the claims started to become too old to process through the manufacturer's warranty system.

In this case, the employee didn't benefit financially from her lies, she just managed to keep her job about six months longer than she should have.

[XDCX]

I thought of this thread when I read this story - a Security Guard hired by an Auto Mall steals from dealerships he's supposed to be guarding while he's on the job.

Here's a link to the news report: http://www.theolympian.com/southsound/story/416948.html

It's hard enough to make money in this business right now without having to worry that your Auto Mall's Security Guard is going to be stealing from your dealership.

[XDCX]

A General Manager of a Honda Dealership in Kansas City pleaded guilty to fraud charges for altering lease documents in order to increase his commission.

The news report indicates that the lease documents were altered after the customers had signed them with the addition of Dealer Installed Accessories that never existed.

Although the report does not provide the information, my theory is that the added accessories increased the residual value of the vehicle, lowering the customer's payments. The selling price of the vehicle would then be increased to a level where the payments were equal to the amount the customer had originally agreed to.

The lease contracts were funded by American Honda and the scam lasted for a period of four years.

Interestingly, the case was procescuted at the Federal level and was investigated by the F.B.I.

Here's a link to the news report: http://www.infozine.com/news/stories...iew/sid/27892/

[XDCX]

This story is stems from my service as a Juror in our local County Court.

An Assistant Parts Manager at a NAPA Store was charged with theft from the company.

The crime was actually pretty simple - on select cash sales he would simply record the sale as a "quote only" and then pocket the cash. The customer left the store with paperwork that appeared to be a receipt, but it was actually just a price quotation.

At the end of the day the recorded sales matched with the amount of cash that was in the register - this continued for months. The extent of the loss was not realized until the NAPA Sore performed their annual inventory.

So how did he get caught? He did a "quote only" transaction of a part that had a core value. When the customer returned the core for the credit another employee noticed that the part was never recorded as sold.

[XDCX]

I recall one incidence where a popular Service Manager committed warranty fraud and painted his personal vehicle using a different VIN number to process the claim. The fraud was detected during a routine warranty audit.

The auditor apparently became suspicious while reviewing time stamps on the repair order. A phone call to the customer confirmed the suspicion.

While the chargeback amount was comparatively small, the incident definitely tarnished the reputation of the Service Manager.