Open and Shut—simply not the case
Often the initial evidence presented can point toward an open and shut case, however further investigation may prove that everything is not as it seems.
Forensic accountants are regularly engaged, not only to identify fraud, but also by defence counsel to review fraud evidence against their client.
Recently, a client (Mr C), an employee of a nightclub, had been charged with embezzling a large amount of money. When we were presented with the evidence, it certainly did seem like an open and shut case.
The nightclub’s initial investigation commenced after management noticed a discrepancy between cash register readings and amounts banked.
In summary, the evidence presented to us was:
- Mr C was the only duty manager rostered on each date that a discrepancy was identified.
- On each date the discrepancies were identified no other staff member was rostered on.
- The cash takings reports reconciled almost to the cent for every other date when Mr C was not the duty manager.
The allegations relied on the fact that Mr C was the only one with the opportunity to take the money on each date funds were unaccounted for.
Our investigation on behalf of Mr C revealed the following facts:
- Although Mr C may have been rostered on each date there was a discrepancy identified, timesheets indicated that he was not at work on a number of those dates.
- The business’s cash handling procedures were not as perfect as management thought.
- At close, Mr C would put the cash in the night safe.The safe was opened and cash reconciled and deposited by office staff the next day.
- A review of office staff rosters revealed there was a number of office staff who would have also had the opportunity to misappropriate the funds.
- Mr C was independently financially comfortable and therefore his personal circumstances did not indicate someone who needed to embezzle money from his employer.
The report submitted to the defence counsel concluded that a thorough examination of the alleged offence’s facts had not been conducted. The report found it relied on largely circumstantial evidence and reached unsupported conclusions.
In summary, even though based on the initial evidence, all roads led to Mr C, we identified issues that had not been investigated thoroughly and presented sufficient questions in relation to his guilt, for the charges to be dismissed.
Even when the evidence seems compelling, it is the independent investigators job to put aside any preconceived notions of guilt and conduct a thorough investigation. In this instance, Mr C’s reputation, freedom and future employment relied on our investigation and report.