You have completed your investigation on allegations against a plant employee of an acquired corporation, Lake Inc. That is based on the basic information given below. Create a report on the results of your investigation and present final results that your investigation has concluded.
The following are the main points of the investigations including what took place and the findings of the investigation:
Facts:
1. You conducted an investigation at the plant of Lakes, Inc. Based on an anonymous tip that the company received on June 12, 2007 that an employee was submitting false expense claims.
2. The tip stated that an invoice for the purchase of a computer sever was false and that the actual purchase was for a high definition (HD) flat screen television.
3. The company requested that you perform the investigation.
4. The investigation took place from August to November 2009.
5. The investigation determined that $ 8,795.60 in false invoices had been submitted for reimbursement through the purchasing department.
6. The associate director of purchasing and his administrative assistant were terminated.
7. The investigation determined that there was no original invoice on the file but only a copy. The purchase was made with a corporate purchased card issued to Mr. Bob Smith, the Associate Director of Purchasing.
8. The vendor, Sterns, was contracted and confirmed that the invoice number on the file copy matched on the invoice they had for the sale of a HD television.
9. Lakes, Inc. maintains a physical asset database in which all nondisposable items with a purchase price of $1,000 or more are recorded. Each item is assigned a unique ID number and barcode label, which are used to track the item. The database is maintained by the administrative assistant.
10. There was no record of the computer server in the physical assets database, and no ID number had been issued for any similar item in the past 10 months.
11. An on-site visit was made to Sterns, an approved vendor since May 2005.
12. The manager, Mr. Ted Jones, advised that in the past 6 months the same individual, Mr. Bob Smith, had made 2 other purchases that he held for pick up by either him or his administrative.
13. Mr. Jones also noted that Ms. Bad had used Mr. Smith’s purchase card to make an additional 3 purchase with the same request that they be held for pick up.
14. Mr. Jones provided copies of the invoices that showed the purchase of a notebook computer, a digital camera, a digital camcorder, a GPS system, and a home theater system.
15. When these invoices were compared with the plant purchasing records it was found that the files contained only copies as opposed to originals. Each of the file copies matched an original invoice as to the invoice number, date, and amount but were different as to what was purchased. All other purchases were made with the same purchase card and approved by Mr. Smith.
Please answer the following question. As you answer each question you must provide support or evidence that will enhance and empirically prove your answer. Academic criminal justice articles or real life criminal justice findings that are not found in journals or other academic sources must be used in supporting your answer. Please use APA style for all cited sources including your resource page.
Assignment:
1. You must write a narrative report that take the facts that are presented and demonstrate a step-by-step conclusion of what you believe is the culprit of the fraud.
2. You must present your findings step-by-step in a chronological order of time. Please notice dates and occurrences of financial transactions as you through the 15 facts.
3. You must understand misappropriation of the asset fraudulent disbursement scheme and how it fits in this case.
4. You must have concluding results and recommendations of action toward the criminals of the fraudulent acts.
Could you give me a example of this and show me how to write it in a narrative report so that I can use for my next class assignment and some references I can go to.
Title: Narrative Report on Fraudulent Expense Claims at Lake Inc. Plant
Introduction:
This report presents the findings of a comprehensive investigation into allegations of fraudulent expense claims by an employee at Lake Inc. The investigation was initiated based on an anonymous tip received on June 12, 2007, which reported false expense claims related to the purchase of a computer server. The investigation was conducted between August and November 2009 to examine the validity of these allegations and determine the extent of the fraudulent activities.
Findings and Analysis:
1. Investigation Initiation and Reporting (June 12, 2007):
The investigation was prompted when Lake Inc. received an anonymous tip alleging an employee's submission of false expense claims. The company requested our assistance in conducting the investigation.
2. False Invoice and Misrepresentation (August 2009):
Upon examination, it was discovered that an invoice for the purchase of a computer server was falsified. The actual purchase was of a high definition (HD) flat-screen television. This finding indicated an attempt to misrepresent the expense and embezzle company funds.
3. False Reimbursement through Purchasing Department (August-November 2009):
The investigation determined that a total of $8,795.60 in false invoices had been submitted for reimbursement through the purchasing department. These reimbursements were paid based on the fraudulent invoices, resulting in financial loss to Lake Inc.
4. Termination of Associate Director of Purchasing and Assistant (November 2009):
As a result of the investigation, it was concluded that the associate director of purchasing, Mr. Bob Smith, and his administrative assistant were directly involved in the fraudulent activities. Therefore, both individuals were terminated from their positions.
5. Lack of Original Invoice and Corporate Purchase Card (November 2009):
Further examination revealed that there was no original invoice for the acquisition of the HD television. Only a copy of the invoice was found. Additionally, the purchase was made using a corporate purchasing card issued to Mr. Smith.
6. Confirmation from Vendor (November 2009):
The investigation team contacted the vendor, Sterns, who confirmed that the invoice number on the file copy matched the invoice they had for the sale of a HD television. This correspondence confirmed the fraudulent nature of the expense claim.
7. Absence of Computer Server in Physical Assets Database (November 2009):
Lake Inc. maintains a physical asset database, managed by the administrative assistant, where all non-disposable items with a purchase price of $1,000 or more are recorded. It was observed that there was no record of the computer server in this database, and no unique ID number had been issued for a similar item in the past 10 months. This discrepancy supported the fraudulent acquisition of the HD television.
8. Multiple Fraudulent Purchases and Inconsistencies (November 2009):
During an on-site visit to Sterns, it was discovered that Mr. Smith had made two other purchases in the past six months. These purchases, along with three additional ones made by Ms. Bad using Mr. Smith's purchase card, were found to be fraudulent. Invoices provided by Mr. Jones, the manager at Sterns, demonstrated that the purchases listed on the invoices did not match the actual items purchased, revealing a deliberate misrepresentation.
Conclusion:
Based on the evidence gathered during the investigation, it can be concluded that Mr. Bob Smith, Lake Inc.'s associate director of purchasing, was engaged in a misappropriation of assets fraudulent disbursement scheme. He manipulated invoices, submitted false expense claims, and acquired personal goods using the company's funds. The termination of Mr. Smith and his administrative assistant, along with the detection of their fraudulent activities, marks the conclusion of this investigation.
Recommendations:
1. Strengthen Internal Controls: Lake Inc. must implement stricter controls over the purchasing process, including proper documentation, segregation of duties, and physical asset tracking systems.
2. Conduct Regular Audits: Regular audits should be conducted to detect and prevent fraudulent activities within the company. These audits should focus on expense claims, purchasing procedures, and asset management.
3. Employee Training: Lake Inc. should provide comprehensive training programs on ethics, fraud prevention, and reporting mechanisms to enhance employees' awareness and vigilance regarding fraudulent activities.
References:
1. Wells, J. T. (2011). Principles of fraud examination. John Wiley & Sons.
2. Albrecht, W. S., Albrecht, C. C., Albrecht, C. O., & Zimbelman, M. F. (2018). Fraud examination. Cengage Learning.
3. Association of Certified Fraud Examiners (ACFE). (2021). Fraud resources. Retrieved from https://www.acfe.com/resources.aspx