An ounce of prevention

COEUR d'ALENE - It's usually someone you would never expect.

"The person that is the fraudster usually isn't the person you think is the fraudster," said Virginia Tate, president of Elk Point Consulting. "He's Ken, he's handsome, he's charming, he's intelligent, so beware, don't make him treasurer."

Tate was speaking to audience of Hayden Chamber of Commerce members at a "Lunch & Learn" workshop Wednesday at the Salvation Army Kroc Center.

She joined a panel of three other fraud experts in educating business owners on how to spot signs of embezzlement, and how to prevent it.

Coeur d'Alene City Finance Director Troy Tymesen earned his expertise on the subject by living through it.

"I have never been through a more painful experience than the one I am about to share with you," he told the audience. "I am going to play with the theme of fraudster Ken. I am going to tell you about fraudster Barbie.

"I may jab at sensitive issues and I know that there are people in this room that know the individual who embezzled from the city of Coeur d'Alene, but mean no disrespect at all."

Sheryl L. Carroll, 52, pleaded guilty to six counts of wire fraud stemming from the embezzlement of $365,000 that was discovered in July of 2012. She was sentenced to a little more than three years in prison for the crime.

He said his goal is never to give the presentation again, and his intent is to educate the business owners in the room.

Tymesen said it's important to seek out partners in situations like the one he went through while overseeing the investigation into the embezzlement.

He worked with bankers, law enforcement and Kootenai County Prosecutor Barry McHugh, who was also a panelist at the luncheon.

"Trust and then verify; that is your mission," Tymesen said. "We hired this individual. She was a single parent. At the time of the embezzlement she was 52 years young. She did not fit the criteria that you just heard about."

Referring to her as Barbie throughout his portion of the presentation, Tymesen said Carroll lived a modest lifestyle. She did not have a paid-off home, and she didn't drive a fancy car.

"She was the best actress I have ever met," he said, explaining that she was liked by nearly everyone she knew.

Tymesen said Carroll was a volunteer in the community and no one would ever suspect that she was capable of embezzling from her employer. She hid it very well.

Carroll was skimming money from employee insurance payments for nearly five years, and at time she was caught she was taking home approximately $6,300 a month above and beyond her salary.

The insurance company didn't catch it, and because Carroll also oversaw the annual audits she was able to mask the embezzlement from the auditors.

She was caught by an employee who filled in for her while she was on an extended vacation in Europe.

McHugh said he has seen many cases of white-collar crime as both a federal and county prosecutor. He encouraged any business that suspects fraud or embezzlement to contact local law enforcement.

He explained the process of investigating those crimes and told the audience to be patient with the investigators while they are trying to build a case.

"These things can take months to sort out," McHugh said.

Joy Rogers, with Mountain West Bank, gave the audience a few pointers on how to work with the bank to stay aware of what is happening with their accounts.

She said there are several things they can do to provide limited access to employees who are managing the financial end of the business.

Tate said that most fraud occurs in small businesses with fewer than 250 employees, but most of those small businesses don't train their employees on how to prevent fraud.

Many of the panelists gave tips on prevention, including training employees to lock out their computers when they are away from their desks, and making sure any employee with financial responsibilities has some sort of oversight.

Wednesday's meeting is the first of four "Lunch & Learn" workshops the Hayden chamber will host this year. To learn more about those programs, visit the chamber's website at www.haydenchamber.org and click on the "Lunch & Learn" link.