Insider Signal Plus - 2022.1
Embezzling bookkeeper, track coach soliciting nudes, Canadian Navy loses top secret information and insider information benefits Bangladesh Minister's family
Law Firm Bookkeeper Embezzled $1.7 Million
Irene M. Scott received an 87-month sentence for embezzling $1.7 million from Shelton & Valadez, the San Antonio law firm for which she worked as an administrator. Scott, 42, used a wide array of methods over several years of criminal activity at the firm, including unauthorized purchases on the firm's credit card, checks written out in her name, and drawing on the firm's line of credit.
Analysis Highlights
Scott was responsible for preparing financial reports, paying invoices, and distributing credit cards.
As in many such insider embezzlement cases, Scott had unchecked ability to conduct financial transactions as a trusted employee.
Segregation of duties or regular audits would likely have prevented or caught this activity.
The scale of the fraud is astounding, given that the law firm has only 7 attorneys (and 22 staff overall) and has an estimated annual revenue of $4.2 million.
The magnitude of fraudulent purchases or payments stands out as exceptional.
Deeper Analysis
Scott continued her fraudulent activity after leaving the firm: she moved on to a job with Central Lighting and Energy while simultaneously receiving unemployment benefits from the Texas Workforce Commission for 18 months.
Central Lighting's background check failed to pull up negative information on Scott because she hadn't been charged at the time of hire.
This case shows the limitations of background checks, which are confined to a point in time, as opposed to continuous monitoring of the employee's activity.
Central Lighting received a letter asking about Scott's unemployment; Scott said she was a victim of fraud.
Suspicious, Central Lighting had its IT staff track Scott's online activity, which showed visits to the Texas Workforce Commission and revealed the duplicity.
The case also shows the extent to insider fraud victimizes a company beyond the direct loss:
Shelton & Valadez paid $100,000 to pursue a civil case against Scott but stand to recover less than $2,000
Staff assumed extra duties after Scott's termination, causing some employees to quit
The firm found itself liable for payments that Scott never made to bona fide contractors and service providers
Many vendors require the firm to prepay services, while others won't provide services until debts are paid off
The notoriety of the case has degraded the firm's reputation and damaged relationships with clients
Sources & Additional Information
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Track Coach Tricked Athletes Into Sending Him Nude Pics
Federal authorities have charged a college track and field coach, Steve Waithe, for a variety of offenses arising from duping female athletes into sending him nude or partially nude pictures of themselves. Waithe, 28, who had coached at Northeastern, Penn State, the University of Tennessee, and other institutions, would anonymously reach out to potential victims and ask for revealing photos, under the guise of conducting a study on the body development of female athletes.
Analysis Highlights
Waithe shielded his identity using anonymous social media accounts
He would title messages "Privacy Protector" to simulate a service that protects online privacy and reputation
Waithe would adopt female names in his approach to victims, including "Katie Janovich" and "Kathryn Svoboda."
Waithe would send victims a pitch about conducting a study on the body development of female athletes, requesting information such as height, weight, body fat percentage, and dietary habits.
He also asked the women to send pictures of themselves showing "as much skin as possible" so he could help them track their fitness progress.
About 50 victims submitted a total of more than 350 photos.
Waithe also allegedly borrowed athletes' cell phones at practices on the pretext of recording their form, instead of scrolling through their photos and sending them to himself.