Embezzlement and Toys

Recent news has been announced of the embezzlement of toy giant Toys R Us by a dull and uninspiring employee – accountant Mr Hopes. He has stolen some £3.7 million by issuing fraudulent invoices to the company and arranging for payment to be made (into bank accounts that he controlled).

Mr Hopes will spend several years in jail and lose every penny he has ( and probably do extra time in jail as a result of a harsh confiscation order against him). So it has not been worth his while – but consider he was only caught because he lavished his proceeds of crime on prostitutes who then flaunted their wealth. Suspicious police investigated and it wasn’t long before the money trail let to Mr Hopes.

I reckon he might have got away with it. He had been taking sums up to around £300,000 for three years. His activities had escaped three years of internal and external audits. If he had squirreled his money away and retired he could be living in some sun soaked land in the life of luxury?

Maybe not – but the lesson again must be how easy it is for the fraudster to escape for significant lengths of time before being caught, just because of the complacency of the organisation. Mr Hopes had been an employee for 23 years. There is no doubt that the organisation’s trust in him allowed him to escape detection for so long. It is breathtaking that Toys R Us, which has 1,500 stores in 33 countries world wide, did not have a more robust system in place to prevent fraud and also to detect fraud.

I have offered anti-fraud services for many years but it is the area of business that sees the least instructions every year. Why is this? There are clearly many organisations that do not have adequate fraud protection, from the smallest to the largest business. Frauds in these are what keep me in work! Yet, as Toys R Us will learn, it would have been far, far cheaper to spend a little on its fraud prevention program than it will end up spending on investigating the fraud, tracing the assets and recovering what little may be left of the losses and probably going over the top in its now ongoing efforts to prevent fraud happening again!

Further details of this fraud can be found on my forensic investigation web site.

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