1. CGB
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    CGB Active Member

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    Embezzlement/fraud/theft

    Discussion in 'Plot Development' started by CGB, Jul 11, 2016.

    One major subplot of my story involves theft of company funds and assets (mining equipment) by a high level executive within the company. The main character spends her time trying to uncover it and the person responsible.

    Im trying to figure out a few things.

    First, how would this scheme initially be uncovered? Maybe through some kind of audit? (I know nothing about accounting).
    Second (related to above) how would a person steal a lot of money and equipment without being found out? I.e. what type of position would they have to be in? Who would they need as co-conspirators?
    Third, what type of job would the MC have to have to be in a position to uncover it and as a result become a target for assassination by the perpetraitors? (Note - would have to be emplyee of company, not a cop or something).

    This is not my area of expertise so any resources you might recommend would also be helpful.
     
  2. NeeNee
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    NeeNee Member

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    My initial thought is that to steal equipment and funds maybe you're villain works in either accounts payable or something to do with purchase orders and they have accounts under a false name that actually goes into a secret bank account that he's set up.

    As for how your MC uncovers the theft - maybe the MC is a either a new hire or a temp that was brought in to do an internal audit because the company's books didn't seem to balance quite right and the owner of the company hired the MC to come in.
    Or maybe the MC uncovers the theft totally on accident, he or she overhears or sees something that puts them on the villain's hit list.
     
  3. NobodySpecial
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    NobodySpecial Active Member

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    My uncle did 10 years in Marion for embezzlement. He owned a title company that sold to Suntrust. They sold to BankBoston who sold it to someone else. Somewhere along the line they did an audit and found several million dollars missing. I don't know if they actually traced it directly to him or if they just made him to take blame because he was responsible for the company. To be perfectly honest he did have a habit of living well beyond his means. A house much larger than a family of 4 needs, new luxury cars every year, expensive custom tailored suits. To this day he swears he didn't steal anything, and I tend to give him the benefit of the doubt, since I haven't been shown anything to the contrary. But he did serve time in prison over it.
     
  4. tonguetied
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    tonguetied Contributing Member Contributor

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    You will probably have to do some research on what mining assets are used to figure out how they could be stolen. Oil drilling involves using some very expensive drill bits so they are something worthy of theft but they are probably tightly controlled and inventoried, etc. So the theft might be a scenario such as bit goes out for repair, the executive directs it to a company they are in cahoots with that replaces the genuine article with a knock off that when put into service breaks down in the mine shaft making analysis difficult, etc.

    The person uncovering the fraud might simply be a drill worker that suspects something is wrong and does some digging into past events to get a bigger picture.

    Stealing money is often done with bogus billing to shell companies, etc. Figuring out something that can be treated that way might be difficult to make it feel "new". With mining I believe they use some special clay or something along those lines to facilitate the drilling, shorting the deliveries might produce some cash flow for example.
     
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  5. CGB
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    CGB Active Member

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    Thanks a lot, good ideas.
    What makes this more difficult in some ways is that it is science fiction - this is all space drilling and fictional currencies and fictional banking systems and economies.
     
  6. Shadowfax
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    Shadowfax Contributing Member Contributor

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    1/ To embezzle money, you typically need collusion between purchasing and accounts payable; purchasing places the order, bogus company sends invoice, AP raises the cheque/bank transfer. One suggestion I heard was;

    a) Manufacturing places a requisition for 10 tonnes of steel.
    b) Bent buyer sources this steel from legitimate supplier at £200 per tonne, delivery ASAP.
    c) Bent buyer places personal order on legitimate supplier at £200 per tonne, invoice to MY HOME ADDRESS
    d) Bent buyer places company order on MY HOME ADDRESS for 10 tonnes of steel at £210 per tonne.
    e) MY HOME ADDRESS invoices company, and makes £10 per tonne.

    2/ To uncover the fraud:

    a) Unless the purchasing is VERY carefully disguised, I'd expect the budget-holder (whoever's responsible for the spend on, say, Repairs & Maintenance) to query why he's overspent, ask to look at the individual invoices. If it's suspected that there is a systematic fraud, the board would probably instigate an audit using an external company. (If you suspect fraud, you don't trust anybody in the company NOT to be in on it, so you go external...and you use a different firm from your regular auditors because they may have been "got at".
     
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  7. Bruce James
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    Bruce James Member

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    Setting aside the sci-fi aspect of it, let me just throw out some things to consider in real world mining and business.

    BUSINESS:
    A/P- accounts payable-they pay invoices sent to them by vendors. The invoices are approved by managers who oversaw the purchase, the usage, or the expense (all different things) The check is most likely cut by a different person than the one who processed the invoice for payment(the A/P gal). There is an A/P manager, and there is someone who approves the payment(like the site manager who authorized the purchase)-other than the one who wrote the check.

    A/R-accounts receivable-they receive money from customers who are paying on your company's invoices. They would likely not be involved in stealing company assets. But they may find a way to steal money.

    Assets- this is mining equipment. Product and raw material (the rocks in the mine) are not necessarily considered assets. But the mine property itself is. And so is the equipment-like the shovel. (google Big Muskie-that would be impossible to steal, but smaller caterpillar equipment or dump trucks wouldn't be so difficult if the operation is big enough)

    Auditors-an internal department that is separate from the accounting department, sort of-think of the Internal Affairs Department in a police organization. Auditors can also be separate companies hired to audit the books of the company that hired them just as a responsible management practice , or they could be hired by a group of plaintiffs suing the company (injured workers or angry investors)

    Labor union- the workers from Supervisor, down are likely a part of a labor union.

    Managers-from a site manager, all the way to the CEO are managers. They would know where the equipment is, and lower level managers would be responsible for moving equipment around on a mine property, or to a repair or storage facility. The higher you go, the more delegating of actions there are; the lower you are, the more hands on the manager is.

    There is always some level of tension between union workers and company people, or managers. Lower level people in accounting-an A/P gal-may have access to books and deal with managers and like them, but they are 'just clerks'-hourly people, like the union people but maybe not in the union because they're white collar. But on the same socio-economic scale as the union workers-maybe they interact socially with them.

    If a mine goes idle due to a union strike or economic conditions (look at the Coal Industry in the USA right now), or geological reasons-a geologist goofed at indicating where an underground spring is and so a mine had to be abandoned because the mine personnel were unable to contain the spring they unwittingly broke through to, and the mine flooded-possibly drowning some equipment.

    Just some food for thought
     
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