Tom and I have been praised more than a few times for admitting mistakes we made in our shops on mis-prints, and the like. This is a tougher admission I make to you today.


I had someone embezzle from my business. They stole $80,000 from my business and it happened at a time when I didn’t have a pot to piss in. At a juncture in my life when I had some bad family things to take care of, my bookkeeper in the guise of helping me out more, instead helped herself to lots of money to feed a bad gambling habit. In the end she just took money out of the ATM machine every day. Supposedly my account with the bank wouldn’t allow for that, but that’s another story. Try and find a lawyer that wants to attack a bank. There were photos of her doing it every day. No way she was not going to be caught.


It is not fun to admit this. You feel like a fool, a sucker, an idiot, a soft touch, stupid, gullible, and weak. In fact I am none of these things. Somebody pretty evil took advantage of me when there was a perfect storm that allowed her to get away with it.


Do some research and the facts aren’t entirely clear, but it appears that the usual embezzling thief is a family member or someone personally close to and well trusted by the owner. It takes two to five years to catch them, and they steal an average of $200K. It took me eight months and I lost $80K, so I guess I was not on the worst end of the spectrum.


The perfect storm was as follows:

– My trusted accountant got cancer and eventually died. He had always watched over me and he was not able to.

– My trusted manager at the same time was hit by a car and had some family tragedies, distracting her from being the usual check and balance. She and I were eventually the ones that caught the thief, as well as perfectly documenting it for a conviction.

– I was distracted by some pretty terrible personal family issues and let down my guard and did not follow through on some practices that I normally had in place.


Add to this that the bookkeeper in the end didn’t even care if she got caught. You know, if you go into a bank with a bazooka you can steal the money, but folks don’t do that because you usually get caught if you do that. If you don’t care if you get caught, it is tough to stop.


What can you learn from my mistakes and my experience on how to keep this from happening to you?

  1. Prosecute anybody that steals from you. That’s one of the only ways to keep such people from doing it. In my case we figured later from stories told to employees that this thief had done this before and yet she had no criminal record.
  2. Make sure at your shop that any kind of theft is not tolerated, whether taking a shirt or staying punched in when you are not working.
  3. Make sure that you have an accountant who is good and who is independent from your bookkeeper. You as owner should have the relationship with the accountant, not your bookkeeper.
  4. Don’t let your bookkeeper look at the bank statements before you. This is key. Make sure they stay sealed until you open them. That’s how I caught the thief at my shop. It all unraveled when I insisted on seeing the bank statements first.
  5. Keep your cash in a safe. Don’t mix petty cash and cash receipts. If somebody pays an invoice, don’t let that money ever go anywhere except into the bank. Keep separate petty cash if you need it to pay things and keep all the receipts and reconcile all your petty cash, and all your invoices paid in cash regularly.
  6. Don’t use a signature stamp. If you have a large business require two signatures on checks over a certain amount.
  7. Keep strict track of any charge cards, charge card accounts, and I would say don’t allow any cards that can be used to withdraw cash.
  8. Keep handwritten checks to a minimum and try to print all checks. Make sure you question thoroughly any payments to companies that you are not familiar with. One of the biggest sources of embezzlement is when checks get written to phony companies.
  9. Be hyper aware if folks in your office are big gamblers or give off any signs of a drug problem. Also be vigilant if you see employees living beyond their means and ask yourself how they are doing that.
  10. Trust your instincts. In my case the bookkeeper was kissing my butt too much and I stopped entirely trusting her and that helped me catch her.
  11. Avoid writing checks for cash like the plague. My thief’s initial thefts were on fake COD’s for what looked like payments for shirts to legitimate vendors that were supposedly arriving via UPS COD.
  12. Do background checks on anyone in your company you are going to hire to be around the money.
  13. Have insurance that covers you. I was not made whole, but I would have been ruined without insurance
  14. Have checks and balances and good practices that are in place. Don’t totally base your protection on who you feel personally can be trusted. Otherwise that trusted person can take advantage of you in the worst way. Make it be about system and not personal.


The ending of the story is that I got through the humiliation, the financial crisis and we survived. Despite the fact that on so many levels I did not want to deal with it and that I had the police saying that I would not get anywhere, I worked hard with a great District Attorney and the thief was convicted. She did not spend any time in jail, but she has a 20 year suspended sentence hanging over her which will be enforced if she doesn’t make restitution payments monthly for basically the rest of her life. Most importantly I was able to move on with my business and my personal life.


Ugly business. Protect yourself. Don’t be a paranoid crackpot. That isn’t worth it either, but do protect yourself out there.









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