Wednesday, January 11, 2006

Where Did This Mink Jacket With Fox Trim Come From?

The press blog of the U.S. Attorney's Office for the District of Maryland describes the indictment  of Bryn Phillips for defrauding her employer, Old Mutual Financial Network (OMFN), and a group of banks of over $800,000 in the past three years.  The blog (here) recites two schemes allegedly perpetrated by Phillips that leaves me wondering how she could have gotten away with it for so long:

[F]rom approximately October 2, 2002 until December 30, 2004, Phillips caused Wachovia Bank and Municipal Employees Credit Union (MECU) to transfer $708,049.42 in monies, funds, and credits from OMFN corporate accounts into accounts she controlled. The indictment alleges that Phillips falsely represented to Wachovia Bank that OMFN gave her authority to cause the issuance of wires transferring monies from OMFN accounts at Wachovia Bank to Wachovia Bank and MECU accounts controlled by Phillips. She caused checks to be drawn against OMFN’s account at Wachovia Bank that were payable to entities controlled by Phillips, and/or her relatives and associates, and withdrew and wired monies from OMFN accounts which OMFN had intended to be used as payment for OMFN business expenses, to Wachovia accounts under Phillips’s control.  Phillips also allegedly used names and passwords of employees under her supervision to execute wire transfers from OMFN corporate accounts into accounts she controlled.

The indictment also alleges a second fraud scheme. OMFN issued Phillips a corporate credit card for business expenses of OMFN. Phillips initially submitted reimbursement requests to other OMFN employees and later reviewed and authorized payments for the corporate credit card herself. The indictment alleges that from September 2003 to January 20, 2005, Phillips made a number of unauthorized purchases and obtained a variety of products, services and trips through the unauthorized use of OMFN corporate credit cards including services and lodging at the Venetian Hotel in Las Vegas, Nevada; personal property including two Louis Vuitton handbags, a $4,095 pink mink jacket with fox trim, and jewelry; home improvements; and professional basketball tickets. She allegedly submitted fake credit card statements to OMFN causing her to obtain more than $150,000 from OMFN in improper reimbursements.

Phillips is 30 years old, and I suspect she is not a senior executive of OMFN, an insurance holding company whose subsidiaries have over $22 billion in assets (website here).  I can't help but wonder if anyone was looking at the credit card receipts and asked whether that mink jacket with fox trim had the company's logo on it, or maybe why the two Louis Vuitton handbags weren't in the supply cabinet.  Where are the internal auditors when you really need them? (ph)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2006/01/was_anyone_payi.html

Fraud, Prosecutions | Permalink

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Comments

Internal Auditor usually do not test low-level expense reports - supervisors and managers should do their job -

Posted by: Internal Audit | Jan 12, 2006 5:53:22 AM

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