Are Criminal Background Checks a Waste of Time and Money?

Listen, you spend hundreds and thousands of dollars every year on auto insurance, and life insurance and homeowner’s insurance, right? And your hope and expectation is that you NEVER have to draw on it, right? Nobody in their right mind drives around thinking, gee, I hope I get in an accident and do lots of damage to my car and other cars. I hope there are lots of medical bills, too. That way I can collect something from all these insurance premiums I pay.

But these same, supposedly rational people, will turn right around and refuse to pay a few buck for a criminal background check on their employees. Too expensive!

Well, here is just ANOTHER story of a small business that was victimized by a crooked bookkeeper who had been convicted of exactly the same thing in the past!

What do you think? Did the owner trust his/her bookkeeper? I guess they did! Until they discovered the theft, that is. Trust is not an internal control, and internal controls are not a luxury, they are a necessity, like rent, utilities, payroll and cost of goods sold.

In other posts, I’ve documented the risk to small firms, non-profit organizations, … fact EVERY organization is at high risk, unless their internal control systems, policies, procedures and habits are thoughtfully designed and working as expected. Owners of small businesses turn over controls to the bookkeeper all the time, and this is a common result. Boards of trustees of small non-profit organizations turn over controls to executive directors, with the exact same results.

Take these fraud-defying actions:

  • Perform criminal background checks on anyone who has any access whatsoever to cash or finances.
  • Pull their credit reports, too, as a condition of employment.

Bangor woman faces second embezzlement accusation in 9 years


By Judy Harrison, Bangor Daily News Staff
Posted Jan. 30, 2013, at 7:44 p.m.

BANGOR, Maine — A woman convicted nine years ago of stealing more than $200,000 from Maine Energy Inc. was indicted Wednesday by the Penobscot County grand jury for allegedly embezzling more than $500,000 from a Union Street nursery.

Ellen F. Wilson, also known as Ellen Gunstone, 55, of Bangor, was indicted on one count of theft by unauthorized taking, a Class B crime.

An arraignment date has not been set.

Wilson worked at Sprague’s Nursery and Garden Center as a bookkeeper and took the money over a five-year period, Michael Roberts, deputy district attorney for Penobscot County, said Wednesday after the indictments were handed up.

She was convicted in December 2003 of theft by unauthorized taking, he said. Wilson was sentenced to five years in prison with all but nine months suspended and four years of probation, according to information in the Bangor Daily News archives. She also was ordered to to pay $200,000 in restitution to Maine Energy.

Information on whether Wilson paid all the restitution in that case was not available late Wednesday.

If convicted, she faces up to 10 years in prison and a fine of up to $20,000. She also could be ordered to pay restitution to Sprague’s Nursery.

And on the same day, there is this! The criminal background check and credit reports would probably not have deterred this, but some simple and inexpensive internal controls (described in some previous posts) would have.

Bangor man charged with stealing more than $100,000 from Kiwanis groups

By Judy Harrison

, BDN Staff

Posted Jan. 30, 2013, at 4:20 p.m.
Last modified Jan. 30, 2013, at 6:44 p.m.

BANGOR, Maine — A local man who kept the books for the Bangor-Breakfast Kiwanis Club and the organization that sponsored the city’s July 4 fireworks display has been indicted on theft charges by the Penobscot County grand jury.

Bruce Fowle, 62, of Bangor was indicted Wednesday on two counts of theft, according to the Penobscot County district attorney’s office.

Fowle allegedly stole $100,000 over a period of several years from the fireworks fund and about $40,000 from the breakfast group between sometime in 2000 and July 31, 2012, Michael Roberts, deputy district attorney for Penobscot County, said after the grand jury handed up indictments.

He is being prosecuted only for money taken between 2007 and 2012 due to the six-year statute of limitations, Roberts said.

“Mr. Fowle was indicted on two counts of theft by unauthorized taking of more than $10,000,” the prosecutor said. “I’m not sure what the exact amount is that was taken during that time period.”

An arraignment date has not been set.

Fowle, who is listed as a certified public accountant in the Bangor telephone book, was a member of both organizations. He served as treasurer for them from 1998 through July 2012.

“We are saddened to learn that a fellow volunteer for the Fourth of July Corporation has violated our trust and the trust of our donors and residents of the area, who depend on us for the Independence Day festivities,” Tony Bernatche, president of the nonprofit, said in a press release issued Wednesday afternoon. “ We struggle each year to bring the best possible event to the Bangor and Brewer areas, and part of that struggle is funding. Last year’s fireworks alone cost $20,000.”

The corporation is made up of members of five Bangor area Kiwanis clubs and community members, he said.

A financial review performed by officers of the nonprofits uncovered questions about “fund accountability.”

“The initial discovery was made after fellow officers and other members of the organizations’ boards of directors were unable to verify funds on deposit at a local financial institution following fundraising events surrounding the July 4th, 2012, celebration,” the release said.

In August, the Kiwanians asked Bangor police to investigate, Roberts said.

Fowle, who was not named in the press release, is no longer active in either group, according to Bernatche.

Bernatche said that a check for $5,000 from Fowle had been received but has not been cashed.

“We sincerely hope the trust of the many businesses, organizations and individuals who support our efforts will continue,” Bernatche said. “While one individual may have crippled us temporarily, we’re confident we can recover from this with help from the public and our loyal supporters who care about maintaining traditions that come with celebrating our nation’s Day of Independence, and the significant related charitable efforts.”

If convicted, Fowle faces up to 10 years in prison and a fine of up to $20,000. He most likely would be ordered to pay restitution to both organizations.

Shakpoee Valley News – 6/30/2013

A 45-year-old Elko New Market man with a history of theft is accused of swindling more than $167,000 from his former employer.

In January, the owner of a Spicer, Minn.-based farm equipment company, Pilot Plastics, reported suspected thefts by Brandt James Jasper, who was the bookkeeper for the business.

The unauthorized payments from the company account totaled $158,647, from January to December 2012, authorities allege.

Jasper has four theft-related convictions dating back to 1989.


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2 Comments to “Are Criminal Background Checks a Waste of Time and Money?”

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This entry was posted on January 31, 2013 and is filed under Fraud and Embezzlement, Small Business Advice. Written by: . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.