Elon Musk, the visionary who founded Tesla, has certainly had his share of difficulties these difficulties. He is an eccentric as well as an innovator, that is true but he built a massive company that has had success. Beyond the news stories of Musk himself, his company is a large manufacturing concern with thousands of employees and many moving parts, such as hundreds of suppliers. One of those employees, a manager by the name of Salil Parulekar saw an opportunity to commit fraud because in the absence of oversight, there is “Opportunity”.
Multimillion Embezzlement
Salil Parulekar, a 32-year-old up a coming Tesla manager has been charged with embezzlement of $9.3 million from Tesla over a two year period, between 2016 and 2017. His scheme was ridiculously simple. He used wire fraud to divert funds.
For a while, he was a highly valued employee. He started with the company in 2013 and became group manager of global supply management. He sourced parts and products for Tesla from suppliers all over the world. He was responsible for managing each of the deals, and he undoubtedly saw certain “vulnerabilities” in how many of those suppliers could get paid.
Posing as an employee of a supplier, Hota Industrial Manufacturing Company, Parulekar fooled Tesla’s account payables department into sending payments to his personal account rather than to the supplier. It was relatively easy for him to falsify invoices and forged bank documents. He simply “instructed” Tesla to wire money to accounts he controlled.
According to the Northern California District Attorney’s Office:
“Parulekar allegedly stole the identity of a Hota employee and, by impersonating the employee, deceived Tesla’s Accounts Payable division into switching the bank account information for Hota.”
There were also the accounts from a German supplier that have been placed under review by Tesla that may have been affected by Parulekar as well. To date, Parulekar has been charged with 9 counts of wire fraud and one count of aggravated identity theft.
He could potentially be looking at a life sentence and millions in fines.
Who Managed the Manager?
There was an opportunity that Salil Parulekar saw in making deals with multiple suppliers, and as he identified more of them and as he seemed to have such an impressive track record, the 32-year-old was given greater latitude. The problem became one of oversight. As the wheeling and dealing were going on, no one was apparently keeping track of how and where the funds were going.
From all we can surmise, there was no one working closely enough with the manager to keep all of the accounts and payment scenarios in proper order. While “trust” can be a good thing, in the case of a very large organization with numerous suppliers, “trust” is also a foolhardy thing.
Why would Salil Parulekar steal? The simplest and most direct answer might be greed. He had a need for more and more money, possibly seeing his aspirations for wealth as being much more important than ethical behavior. Let’s also not be naïve here. In many international markets, gifts, favors and under the table bribes are often a way of life. For a 32-year old with little or no ethical training, it can be pretty heady stuff.
There was obviously a rationalization in place. Tesla is a publicly-traded company fueled by billions in market value and hundreds of millions in sales. He saw his $9.3 million theft as nothing more than pocket change. Perhaps in his mind, Salil Parulekar felt the money almost to be a gift for his clever management.
Should age be a warning?
It is not that Salil Parulekar was a 32 year old millennial, or even an acknowledged rising star, but that he was not ethical. He had no ethical training and no ethical filter. No one around him recognized his unethical behavior until it was too late. He seized upon every opportunity he saw because no one ever told him to behave ethically; that his perceived need for more wealth, outweighed the wisdom to work toward a goal. Instead, he felt entitled.
Tesla is going through some choppy waters, and frankly, there have been ethical breakdowns from the founder himself to employees at Salil Parulekar’s level. In the quest for better technologies, for the opportunity to be the most innovative and futuristic, sometimes an older approach needs to be instilled as well. An approach is an ethical approach, and it works because in the absence of oversight, there is “Opportunity”.
