Myra Manning, CFE, was hired to investigate some suspicious activity at Dupree S
ID: 2547602 • Letter: M
Question
Myra Manning, CFE, was hired to investigate some suspicious activity at Dupree Supply, the largest regional supplier of coffee, soda, snacks, and tobacco to convenience stores. Dupree Supply had received numerous complaints from customers that they had not received credit for cigarettes purchased from Rodney Paris, their route salesman. Myra examined Rodney Paris' tobacco warehouse withdrawals, vendor cancelled checks (that evidenced that the checks had been deposited into Dupree Supply XL), and handwritten receipts showing that customers had made cash payments for the tobacco purchases. In total, she noted that over $48,000 was neither credited to customer accounts nor deposited by Rodney Paris for the tobacco sales. What type of scheme might she have uncovered and why?
Explanation / Answer
Myra has uncovered the scheme that the vendors payments and sales receipts from customer in cash have been fraudently used for the personal purpose.
At Dupree Supply, the vendor's checks were drawn and cancelled and on the contrary, payments from the customers has been received in cash and Cash receipts have been drawn accordingly.
Thus, no payment has been made to vendors and no credit to customer's accounts (or deposit/debit to Cash book). A total amount of $48000 were fraudently taken away of business.
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