Accounting fraud is dangerous and something that Amy Hilty, 38, formerly of Stanley, N.C. and now residing in Dalton, Ohio, pleaded guilty to stealing nearly $400,000 from her former employer. Hilty pleaded to one count of wire fraud and one count of tax evasion.
The background:
From 2008 to 2012, Hilty was employed as accounting manager for a company located in Huntersville, N.C. As the company’s accounting manager, Hilty’s responsibilities included preparing the company’s financial statements, maintaining QuickBooks, preparing payroll and making bank deposits. According to court records, Hitly used her access to the company’s accounting system to divert company funds to bank accounts she controlled. This is accounting fraud at its most basic.
The Cover Up:
According to court records, Hilty covered her fraud by falsely recording the stolen funds in the company’s books and records as supplies, owner withdrawals and travel expenses, among others.
The Benefit:
Court records show that Hilty embezzled $390,156.73 from the company during the relevant time period and used the money to purchase a new home and a BMW vehicle. Court records also show that for tax years 2008 through 2011, Hilty did not file federal income tax returns, and failed to report the diverted income and her salary from the victim company, totaling $520,976.17.
The Outcome:
While as of this writing Hilty has not been convicted or sentenced…she will be on both counts. My suspicion based on past experience is that Hilty will face time in prison and a healthy tax bill.
What Can We Learn?
First…when NEED is met with OPPORTUNITY and one can RATIONALIZE behavior – anything is possible. Second, typically those who are apt to perpetrate a fraud are usually those that are most trusted. Lastly, being observant and questioning what might be seen is beneficial. For example – had the employer wondered where the source of funds was coming from for the new house and BMW, it might have been clear that something was amiss.
Do you know what your accounting staff is doing?
