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| Employee Trust – Office Manager Steals Over $210,000 Attorney John Norwood heads Norwood & Associates, a lobbying and government relations firm doing business in the state of California. They represent clients in the fields of business, finance, and insurance on proposed legislation and regulation before the California State Legislature and regulatory agencies. They, like numerous other small businesses around the state, had complete trust in their office manager, Linda Wells. Linda Wells was brought on in 2004 to run daily aspects of the business including billing, accounts payable, depositing of checks, and occasionally taking clients out to lunch. Mr. Norwood had personally known Linda Wells for over 20 years and she had been trained and mentored by his outgoing office manager of 14 years. John had the utmost faith that everything was on the up and up. Everything came crashing down In August of 2010 when Mr. Norwood’s CPA Dan Haley of Haley and Company LLC came in to provide an in person audit of the firm’s books. Mr. Haley had been trying to complete the 2009 audit for a number of months, with Linda Wells always coming up with a reason to avoid it. All was well with the in person audit until, in a lunch conversation, Mr. Haley made a comment regarding the salary paid to the office manager. The number Mr. Haley used was not the amount the firm had agreed to pay from emails dating back a number of years. Proof of theft was given to John Norwood on August 19th, 2010. Linda Wells was immediately fired and a police report was made. As it turns out, Linda Wells used a company credit card to make almost $40,000 in purchases for personal lunches, loans to friends, and even paid for her son’s summer camp. In addition to all of this, she also increased her own salary by more than $95,000 in the form of “bonuses” that were completely unauthorized. The W-2 was the hard evidence against Linda Wells. All in all Linda Wells managed to steal over $210,000 from Norwood & Associates. For Norwood & Associates, the real kicker in all of this is that most commercial insurance policies have little or no coverage for this type of theft. Employee theft policies have long been a part of the insurance world, but a lot of smaller companies forgo purchasing them. The most common reason is listed as “trust”. The moral of the story here for the business owner is to ask the questions:
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