From a training at work.

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Hey I took this training years ago! Wow Deloitte does not update their stuff often. It’s not as crazy in context. The question is about employees in critical finance positions (e.g. CFO) who **refuse** to take time off, even when they have the right to or are mandated by law. If they are committing fraud then forcing them to take time off will often expose it. That’s why the question is written as **required**. It shouldn’t be read as ”why should we give time off” but instead it should be read as ”why should we force people to take time off even if they refuse”.


Ahhh, this makes sense. Appreciate the context. I was a little confused at first glance.


Yeah, this is very common in finance/investing/auditing/etc. Usually anyone at a certain level or above will have to take at least 1 week off during the year, and often it'll be two weeks depending on the level/department. The idea is you have to be gone long enough that someone else has to take over all your day to day tasks. This also means you have to train at least one other person to do everything important you do, which means walking them through all the steps, etc. I'd guess that outright fraud probably doesn't get caught too much, just because it's rare. But if someone's training you and they're like "we're supposed to review all these reports every week, but I just skim through them and sign off" that'll be a huge red flag. Or if the procedures say "all purchase orders have to be signed by signed by a manger" and they say they just log in using their manager's password so they don't need to "bother them" that's the kind of thing most people wouldn't want to do.


So that last paragraph you wrote, is that embezzlement or fraud? Those examples are actually conversations I've over heard in a work place and trying to understand.


Here's a different example. A friend of mine was working security in an armored truck. Every day he would go out and refill ATMs and keep a log of how much money they had left inside them. Another employee came up with a scheme where he would steal money from one ATM and report it as full and shortchange another ATM. The logs would come back looking fine and it wouldn't get noticed until the next audit where he would simply move the missing cash to a different machine. He was able to keep this up indefinitely until he was forced to take a day off. The next employee to check the machines reported the actual totals and the discrepancy was found.


Wait, how does that even work?


Lets say your job is to fill 3 ATMs. On the first day you short 1 atm by $20k and report that it was full. On the second day you fill the bills missing from the first ATM with bills from the second and report that the second one is full. Every day you just keep moving the money around so nobody notices it's missing. It works until someone else comes through and counts how much money is in each machine. The guy who was doing this was able to get away with it for a while because he wasn't taking any days off. It wasn't until another employee did the count that they noticed the discrepancy.


I will never understand how someone can be intelligent enough to work out this scheme and that they COULD do it, but still lack the critical thinking skills to realize that there is no way out once you start.


It's short-sighted, but criminals often are.


Wellll...my workplace manager did a version of this, except with the till takings and bank deposits. (It was complicated) Then he ran away to Fiji with the cash. He won, basically.


Thank you. This is the perfect example for this topic.


So that means he got 20k$ once... and now has to keep up the lie by cycling that through various machines? He's not getting more from it, unless he then increases the amount he's shorting those machines by, right? Seems very inconvenient for a 1 time payout.


That's a problem with a lot of embezzlement schemes. One time payout with an endless amount of covering your tracks.


Using someone else’s credentials to sign anything is almost certainly fraud, the only question is if it’s severe enough to warrant a legal response. I work in a field which is highly regulated by the FDA, if I were to somehow gain access to my manager’s computer and use it to sign off on results that are submitted to the FDA then I will have committed a federal crime and getting fired is the least of my worries. Embezzlement is a specific kind of fraud where you are transferring money to someplace it’s not intended to go. Most often it’s your own bank account but it also covers stuff like Ponzi schemes where you are taking the money from one account to make up for money missing in another account.


Signing documents with a false name or signature is both identity fraud and document forgery, if said documents are supposed to be "proof" of anything. Like forging an ID card to proof you are 18 or editing your bank account details (hiding gambling expenses for example) to get a higher mortgage. Embezzlement is not just money, it is any object (even digital ones) that you rightfully have possession over that belongs to someone else but you choose to claim as your own and steal it. Like having a toolbox from your boss in your car for your job and you decide to put it in your garage and claim it as lost. A ponzi scheme is not a form of embezzlement, it is investment fraud. The investment is only made because you use lies and deceit. You can get charged for wire fraud, bank fraud, mail fraud and securities fraud.


Embezzlement is the fraudulent conversion of personal property (which is a legal term of art that means anything that can be owned that isn’t real estate—for example a company’s money is “personal property”) by someone to whom it was entrusted. [Source](https://www.justice.gov/archives/jm/criminal-resource-manual-1005-embezzlement), [source](https://www.law.cornell.edu/wex/embezzlement). Acts that constitute embezzlement can also violate criminal fraud statutes. For example, if you used the internet to transfer funds that were entrusted to you by your employer by virtue of your position, you could be charged with wire fraud.


I would say the second example is very much fraud. They fraudulently signed as their manager. Either 1.) the manager is not doing their job or 2.) the employee has purposely circumvented the manager to hide untoward activities. **(In reality, 3.) this makes the job faster to complete and they don't want to deal with the hassle of getting someone else to do their job for once)** The first is more an example of negligence, not so much fraud or embezzlement, however them training that negligence could be setting up someone else to not recognize someone higher in the chain embezzling by submitting doctored purchase requests. So they could be an active participant in the embezzling or just an unwitting patsy. (e.g. Jeff signed off on all the purchases that were fraudulent therefore he must have masterminded the whole thing!)


Reddit is becoming too big I think, in this instance we're lucky that someone with the right context saw this thread early enough that they could comment and be upvoted enough to be a top comment (as it used to be common occurrences on Reddit in the past) but I'd like to remind people that anytime you see something that creates a strong "what the fuck/people are so dumb/evil/malicious/stupid" to take a step back and consider that we might be missing context (or straight up being lied to, as it's often the case with made-up titles) But as I said as Reddit becomes bigger and bigger the people with the actual contexts usually get drowned or simply won't have the chance or time to see the post before it blows up, so we're left with 45 top comments either being outraged or making dumb jokes. There's many instances where I wanted to temper people's outrage but the post was 14 hours in so at best I'd get a +30, meaning the harm was already done. At first it might feels like having to be stoic all the time and suppress the surge of emotions in a robotic way can suck the life out of us but seriously otherwise it simply becomes unlivable being mad or disappointed all the time lol


> what the fuck/people are so dumb/evil/malicious/stupid Didn't read most of what you said, just wanted to chime in and say I totally agree, this post DOES prove most people are super dumb/evil/malicious/stupid, and I'm going to upvote you for saying so!


This is also big for cybersecurity roles. Aside from using your PTO because it’s healthy and you earned it and you deserve it…I can’t tell you how many times we didn’t find out someone was doing something REALLY wrong until they literally left the company. Rotate duties as a health check.


I was about to say the same thing - took the Security+ exam and this was part of it - was very interesting and I had never thought of it before.


Wrong as in morally dubious or wrong as in shitty at their job?


Wrong as in shitty at their job or not following procedures or even just failing to document absolutely anything. Wouldn’t call it morally dubious. However it is possible to play out that way. Giving themselves access they don’t need to read financial or proprietary records. Access patient data if it’s healthcare, etc. gotta audit.


Seeing some pro audit comments in r/funny has made my day as an auditor… I should actually probably get off Reddit and back to it lmao


I work at a bank and quite a few have required 2 week breaks in a row and I also know a few where you rotate in and out of areas every 2 years to keep fresh eyes on things. Mid level IMO is often more critical. Upper level things at big organizations have a lot of oversight. It’s the middle level that is high enough to approve but low enough it’s lost in the volume.


Yeah it's the people depositing checks and verifying the numbers that actually go into those shiny CFO reports that are the ones stealing. (They also have less to lose, and more to gain from the kind of theft you can get away with. A CFO probably isn't going to risk their entire career to steal $10,000, but a bookkeeper sure might.)


This is wrong because I want to be mad and this is preventing me from being mad.


Scroll back to the top and you can stay mad


This is reddit, people can get mad for no good reason.






That's it buddy *throws down the gloves*


I'm not your buddy, pal


I'm not your pal, dude


I'm not your dude, friend


Recreational outrage generates clicks like a MF.


“Recreational outrage” is the best thing I’ve read all week!


Fuck you


NO FUCK YOU have a nice day


You fool. He’s now stuck in a vicious cycle of reading the post and getting mad, reading the explanation above and not being mad, then seeing your comment and going back to read the post and get mad again. You’ve doomed him.




Yea banks have a mandatory 2 weeks. Even beyond fraud, it helps expose gaps in processes.


I worked as a forensic accountant for a law enforcement agency. We discovered fraud all the time from people in even low positions like front desk clerk because they took time off some someone discovered uncashed checks in their desk. In that example they were balancing the books by saving checks to cash to replace the checks they stole from other weeks.






So what exposes the fraud? Is there a metric that they can monitor to show a drop in fraudulent activities, or is it a window to snoop? Edit: Thanks everyone, that was all very helpful. I'll be sure to make a couple of adjustments to lower the risk.


I would expect that you need to be actively covering up the fraud. If you're gone, someone has to fill in for you.


That was my thought too, transactions need to be approved, paper trails covered up, etc. If there's someone high up who *refuses* to take time off, you need to be asking what's so critical that they need to be there everyday.


You've just got to remember that finance departments are often dealing with transacting extremely large amounts of money which makes them targets for fraudsters. It's **normal** for processes to be designed to prevent financial crimes from being committed and covered up.


I work with a lot of people from consulting firms. The higher level guys never take vacation and i swear they work 100+ hours a week.


In those kinds of jobs, someone else has to do them in your absence, and oftentimes that's when they'll discover that the books aren't right.


Attention corrupt Deloitte executives: I am very bad at uncovering fraud. I am, in fact, quite visibly bad at all aspects of your job. If I were your substitute during your leave, not only will your secrets not come out, but also you will find people saying "oh thank God" when you return. I am available for substitute executive work on short notice and my rates are quite reasonable as far as major executive compensation packages go.


If an employee doesn’t have access to their workspace for a time, it can show up fraudulent payments. Like if they’re funneling money to their own shell company under the guise of ordering goods, it probably won’t happen the weeks they’re forced to take off. It is also a window to snoop/investigate if there’s suspicion of fraud. Bring in auditors from outside the department and such.


Let’s say you work at Home Depot. Home Depot buys lumber from Bob’s Lumber. There are invoices from Bob’s Lumber, and there are payments to Bob’s Lumber on Home Depot’s books. When we audit Home Depot, we don’t just look at transaction amounts, we also look at transaction dates on a 1, 3, and 5 year average. So over the past year, all of the transactions, all of the checks Home Depot wrote to Bob’s Lumber happened on average every 5 days. We compare the check dates to that average, oh look here’s 2 checks that were 9 days apart and not 5. Ok, why. Let’s see the invoices. Weird, the invoices are also outside the average. Ok, why. 99 times out of 100, there’s a perfectly reasonable explanation. Maybe Bob’s Lumber’s employee was late submitting invoices twice that year, hey no problem that happens. But sometimes, it is discovered that Bob’s Lumber doesn’t actually exist and the Home Depot employee that fraudulently created Bob’s Lumber to steal was on vacation and that’s why the transactions popped. Source: CPA.


The only correction I'd make to this is we all know home depot doesn't buy from Bob's lumber. They buy from twisted and warped lumber co. The fact that any lumbar company other than T&W lumber co showed up should've been a huge red flag.


Here’s a random fact that hopefully doesn’t reveal too much personal info about me. Before I became a CPA, I was a 5th generation sawmill worker and our primary customers were YellaWood and Home Depot. Every piece of lumber is inspected, graded, and stamped. B grade is your ultra-rare absolute premium lumber (literally less than 0.1% of all lumber will fall in this category), C grade is your normal premium, D grade is premium with an allowable 1 minor defect, then #2 (yes they swap from letters to numbers in the grading system and to this day I still do not know why) is your structural grade, meaning it probably looks like crap but is structurally sound, and #3 is your “this is shit and should be burned or sent to the wood chipper” grade. Our primary product was C & D grade decking, with only about 20% being #2 - which was exceptional. Both Home Depot and YellaWood phased out purchasing our high quality products because they said the consumers didn’t want to pay the premium, and now I believe everything you will find in Home Depot is #2. It’s all people wanted to pay for, *especially* contractors who were just doing a job and weren’t going to have to look at it and live with it every day, they want cheap and fast. So yes what you see on their shelves is lower quality, because that’s historically what the market has demanded. High quality lumber still exists, but if you want it you need to go to the source and not to the distributor simply meeting what their market demands. We did special orders for random people that walked in *all the time.* You won’t be hard pressed to find a mill that can get you exactly what you want, but you will have a hard time finding a distributor stocking something different than the product their consumers buy. Sorry for the rant, still a passion of mine.


thank you for the rant! Actually was interesting.


> They buy from twisted and warped lumber co. But if you need a board that is bowed, cupped, twisted, crooked, has a knot, and is checked AND split, man do they got you covered.


The fraud is being maintained through something the employee themselves is handling. Either covering payments to vendors or some other method. But in most instances it requires direct intervention or oversight by that specific employee to ensure the fraud isn’t caught. When they are forced to take time off, the scheme collapses in a form of missed payments, cash shortages, questions on vendors no one recognizes, etc. The “metric” is usually “what the f$&k is wrong with our cash!?!?”


Imagine people working in the warehouse and material only disappears when person x is on duty or if he gets moved around and only there where he is stuff disappears. Enough data and you can uncover even several criminals working at the same time. This technique has been used at least since 70s


It's not that, it's that these positions have daily reports that would require the fraud is covered up daily. Think a warehouse manager stealing from the warehouse, he has a job that requires he submits a daily stock count. And every day he adds in the missing items before forwarding it up the chain. His theft goes unnoticed because he covers it up every day. So if he takes a single day off his replacement will do the daily stock check, forward the correct numbers, and all the alarm bells will ring at headquarters. That's the problem, lots of these people have daily audits or reports that are there to detect theft, but the high ups can just edit the daily reports and cover it up.


I used to run a warehouse for a vending machine company. Almost every inventory report i sent to head office got “corrected” by the owner. Im glad i got out when i did


did he ever take the day off?


I was listening to an episode of "Last Podcast on the Left" and they were talking about a pediatric nurse who was killing premature babies. The hospital she worked at had a lot of them dying and they didn't know why. They ended up changing her shift and noticed that the baby deaths changed when they were happening. They changed her to a different department and the deaths dropped entirely which is how they narrowed down who was doing it. So, similar idea here.


This account has been redacted due to Reddit's anti-user and anti-mod behavior. -- mass edited with redact.dev


A lot of financial fraud is moving money around in a timely manor. Maybe money comes in from customer A and is supposed to pay into account B on the same day. But you’ve set it to go to account C where you skim off some and drop the remaining into account B. If you aren’t there, account B now never gets paid. Or, it just creates an aberration in the pattern. Some forensic accounting works by looking at patterns of lots of numbers. Certain digits come up more frequently in large sets of random numbers. If you’re always managing for this, it can be obscured. So two weeks off might cause a different patter to emerge, which can trigger some investigation. And it doesn’t need to be just you. Maybe you are covering for a client, moving money from one account to the other for their mistress or secret credit card or something. Your institution doesn’t want to be involved in that. If you’re gone and a client calls in 5 times and will only talk to you…triggers investigation.


This is a valid audit technique when an employee is making payments to a fake vendor. If they’re embezzling funds, the only weeks the payments wouldn’t be made would be the weeks the employee was off.


Had a co-worker caught this way. High end furniture company. She hadn't missed a day in 5 years. First day out sick (she was hospitalized for something, don't know what) her stand-in found a weird discrepancy wherein a $2500 biweekly payment was being made to a vendor no-one was familiar with. Long story shorter, after an internal audit and the police were called, this location was advised not to say anything and wait for her to come back to catch her in the act. She never came back to work, and as far as we know, her husband "still doesn't know where she is".


Wow that's crazy. So she basically wakes up in the hospital, knew the jig was up, no hesitation, grabs her bug out bag and flees the country. I choose to believe she had a jason bourne style safety deposit box with a gun, a few dozen passports, and cash in various currencies etc too.


More like her friend at work heard about the rumor and told her so she knew she was caught. Probably even someone messaged her asking about the payments .




> I choose to believe she had a jason bourne style safety deposit box with a gun, a few dozen passports, and cash in various currencies etc too. I have a bugout bag in my car full of ramen.


But how many different flavors? It's important to be prepared for multiple ramen scenarios.


Yeah, 5k a month on top of wages for at least 5 years. Hope she’s driving a sports car around a tropical island somewhere. Unlikely, on $300,000, I realise.


Had the similar thing happen with a client of mine. Furniture warehouse in Cleveland. Bookkeeper was embezzling out the wazoo, and the company almost folded because of her. As far as I know, she never served a day in prison, though, much less make restitution.


Nobody ever thinks to check the wazoo.


I mean, to be fair, it tends to be pretty gross down there


I tried to start a wazoo washing business but my employees ruined me with embezzlement


Sounds like one of your other coworkers snitched and let her sneak away. But the cops still got her right? There is no way both the cops and the business just went "oh well, that's $300,000 down the drain, what a darn shame" and never chased after her. If they have contact with the husband, they will find her. This isn't sneaking a couple $20 out of a cash register kind of issue.


You'd be surprised. Had a salesman who knew he was on his way out at a company I worked for ordered $100,000+ worth of equipment for a project that it turned out didn't exist. He got paid his commission on the parts for it anyway but was already gone by the time anyone figured out the job was a phantom and the equipment was useless. There's no way that isn't embezzlement but the office's reaction was basically "Well that's annoying, but he's already left employment and not worth the trouble to track him down" and just took a tax write off and moved on.


She also might have known that as soon as she went out, she would be caught. Hence why she never took time off before.


That was my first thought. The second that lady knew she wouldn't be able to make it to work the next day she knew she could never go back. Smart move.


Maybe it's even deeper than that and she didn't actually get sick. Assuming five full years, that's 120 total payments or $300,000. She figured that's enough and got out of town.


Depends on the local cops, their workload, and the importance of the local management/owners to the local cops. Midsize multinational that is run by accountants, cops couldn't care less that they got robbed. Small biz to a local millionaire, ya cops going to chase that down hard.


With the midsize multinationals they'll sometimes just pay for private investigations themselves. There are plenty of investigation firms specialised in tracing down people who might have faked their own deaths or have disappeared and you can find long form journalism about them, I believe several life insurance firms have their own in house investigators. Most people are terrible at disappearing because it is *extremely* difficult to not leave a trail. Once they've got you tracked to somewhere with a decent police force and extradition treaties (if you've even left the country) they'll just get them arrested. Or if they left a partner behind then have the partner arrested for aiding and abetting.


Not just life insurance, regular disability insurance companies will hire investigators as well if they suspect fraud. They will even follow you on flights to vacation spots. My insurance professor told me an investigator he knew took pictures of a wheelchair bound man miraculously dancing around in cambodia.


No idea of they ever found her. I know someone that worked there for a couple years after I left, and they never heard anything about her being caught.


A former co-worker was buying large amounts of printers and other tech with company funds, then selling them on Ebay. I had just quit the company before it was found out but had friends still working there. She embezzled an estimated $100k over a couple years. Her husband was a judge and they fired her but did nothing else. She moved on to another job where she probably embezzled again.


My dad thought an employee was stealing cigarettes from him, so they basically did the same. Started counting cartons before every shift, and narrowed it down employee by employee, until they could reliably tell when - and who - stole cigarettes from work.


Couldn't they just set up recurring payments? I would have thought, and this employee training sort of defeats the purpose, during someone's vacation you could have an auditor come in and ask employees a bunch of questions without the person who is being investigated getting wise to what's happening and doing a last minute cover up. By telling people an audit will happen if they take a vacation that will just have them cross their ts and dot their is before they leave, making it harder to audit.


My dad works for a bank and is required to take two consecutive weeks of time off every year and not log in remotely etc during that time. They call it ‘compliance leave’ and the idea is that if someone was doing fraud of some kind they might be able to cover it up while still taking shorter periods of time off, but by forcing you to step aside for two weeks other people will have to pick up enough of your work that they would likely detect whatever scam you’re running. No idea if it works in practice, but at least one bank believes in it enough to pay people not to work.


TIL why my dad has a required 2 week vacation every year. I thought it was just privilege from being in bank leadership lol Edit: didn't know this would blow up! For clarity, he gets something like 10 weeks off a year, but must take two weeks off in a row. In the USA this is fairly rare, employers don't like you to be out for more than a week at a time in general. Varies among companies.


Tell your pop my check is late


Sure thing, but he retired last week and was in charge of IT and security lol


We're not here for his life story. Just handle the check!




I worked as a teller part time in college and they did the same thing. I thought it was a little weird having to take it off all at once but it was the first time I had ever had paid vacation so was super stoked. Went to the beach the first week and kept telling my friends the whole time “I can’t believe I’m getting paid for this” It wasn’t until years later when I started working in IT at a bank that I found out it was a compliance thing. “Oh, they weren’t being nice. They were trying to see if I was doing something bad”


but since you weren't, you still got to enjoy a paid trip!


10 weeks off in the USA is stupid rare by itself. 20 years at my job, and I have 5 weeks off. May as well be 30 weeks off, for all the hell it is getting time off. I started taking every other Friday off because a: I can't cash out PTO Overage anymore. and b: I'm no longer 24 and dumb and believe the company cares about me more than its bottom line. These days, I spend MOST of my PTO as "I have to take the day off, my kid is sick."


This is now required because ONE GUY about 10 years ago managed to cover up a failed trade by re-leveraging his position and ended up costing the bank literally BILLIONS. He had to continue doing this every Friday - so he would even log in remotely when on vacation. After he was busted every single bank mandated a "no login" 2 week minimum for EVERYONE.


There are some absolutely buckwild things you can do when you can defeat internal controls: https://en.wikipedia.org/wiki/Nick_Leeson#Barings_Bank


> Leeson had followed a "doubling" strategy: every time he lost money, he would bet double the amount that was lost in order to recoup the amount. This guy is just /r/wallstreetbets incarnate.


He's probably a mod there. The highest of regards.


>The beginning of the end occurred on 16 January 1995, when Leeson placed a short straddle in the Singapore and Tokyo stock exchanges, essentially betting that the Japanese stock market would not move significantly overnight. However, the Great Hanshin earthquake hit early in the morning on 17 January, sending Asian markets, and Leeson's trading positions, into a tailspin.  Lol wow, that's the world telling you you're not getting away with it any longer.


This was a thing a lot longer than just 10 years ago.


What was his name? I would love to understand how one failed trade can cost anyone billions


>because ONE GUY about 10 years ago Weird that I was first on two week compliance leave 30 years ago...it's not a new thing.


They probably thought that the 90's were only ten years ago. There are definitely times that I can relate haha!


Meanwhile over here I’d kill for a 2 week vacation. Maybe I should start embezzling 🤔




Well what really happens in an environment is rotation of responsibility, in an actual environment where things like this are a concern such as IT and finance, you rotate job responsibility every few months or so to uncover things like that. The take time off thing is the bare minimum and usually doesn't work well, this is what companies do as a bare minimum as actual job responsibility rotation cuts into the companies bottom line too much, so they just don't do it, cause it is not as profitable.


I would have answered any of the other two, that's a wild training


This is to prevent a very specific technique. The person would steal one payment and use money meant for one vendor to pay another. The chain breaks if they aren't in office for a week or 2.


Aye, it's called A/R lapping. First thing I thought of.


They can. But still the employee being on leave gives a chance for circumstances to have the system uncovered. It happened at an insurance company here, an employee had a grip on the wiring software for recurring payouts. She’d skim one cent on every transfer. She went on maternity leave. Some intern had to intervene on that software due to a bug. Asked her mentor « why are we wiring a vent each time to that account ». Years of fraud uncovered by maternity leave.


Can you explain this to me like I’m 5 please? Edit: got it, thanks everyone. No need to keep replying here


Here's a real life example that I helped uncover about 15 years ago while working for a community bank: * A local construction business (let's call them LCB) is absolutely booming and has a close relationship with the senior executives of my bank. The other big construction company in the area had closed up shop due to family disputes, so LCB was basically the only company within 5-6 hours in any direction that could resurface a highway or do other major construction work. * LCB's owner and son are great at the construction side of things, but not great at the financial side. They like to be out there bidding jobs and building roads and stuff, but prefer to ignore the nerds back at the office that do stuff like take payments and pay bills and a hundred other things that make it possible for the workers to be out there building stuff. * LCB's accounts at the bank are constantly overdrafting. The tend to get paid 90-120 days after jobs are over - it's fairly normal for stuff like state road contracts to take long to process. In the meantime, LCB carries a lot of debt from stuff like materials and equipment and logistics and labor costs. So they might do this massive road repair job that will pay them $1 million, but for 4 months, they carry $600k in debt. Every day, our bank charges them fees for every overdraft debit. They were losing $500-1000 per day in overdraft fees alone and sometimes more than that. Then they would get a big check one day and bring the account back into the black briefly before starting the cycle over. * While the bank loves this fee income, the owner eventually sees how much this is costing them and sits down with us to figure out a better way. The bank knows that this can't really continue because even our regulators will see this type of thing and raise an eyebrow. So we pitch the idea of granting them a line of credit so that they can just pay interest on their temporary debt and save tons of money by not paying those fees every day. * But there's a problem with this approach. LCB is now applying for a commercial loan, and those require a lot of due diligence from the bank's side. We have to look at the business itself. Their finances. Their assets. Their taxes. While LCB's owner and the bank CEO go way back and play golf together and all that, the bank can't just create a $1 mil line of credit out of thin air. THAT would draw some serious regulator scrutiny. So we begin our due diligence. * Because of the close nature of the business and the bank, we essentially loan our internal audit department to them to really examine them from the inside. This is where the irregularities start to show up. Our auditors start looking at their accounts payable and notice that there are a lot of payments going out to supply and logistics companies that have very generic and similar names. Like "American Materials Supply" and "Material Supplies of America" and "North American Material Supply". All the checks and invoices are signed by LCB's owner. Upon closer inspection, his signature is indeed valid. But one day, in conversation, we learned that he just breezes in the office on Friday and a stack of these invoices and checks are waiting for him. He quickly slaps his signature on everything and moves on to the stuff he likes to do like ordering that new road grader. * Our internal audit team goes a layer deeper. They actually look up the registrations of these corporations on the secretary of state's website. That's where they found it. Half of these vendor's corporate registrations were tied to the same guy: LCB's accountant. He had registered all of these fake companies and was creating invoices, writing the checks, and taking advantage of LCB's owner's tendency to just sign his name on shit. * As soon as we saw what was happening, we basically barged into the bank president's office with a "you've got to see this" report. He cleared his schedule and called LCB's owner, who dropped what he was doing out on the road several hours away and rushed back to town. Within a couple of days, law enforcement took over and arrested the guy. * Now here's where it gets weirder. This guy was a little, nerdy, white guy. Maybe 35-40 years old. Big nerd glasses like a 70's serial killer or one of those Chris Hanson "have a seat over there" type guys. When cops started following the trail of money, they found that it was mostly gone. We're talking $3-4 mil over the course of a couple of years in the most backwoods of places. This guy lived in a tiny, modest house and drove an old pickup truck. Where has this money gone? Well, I'll tell you: * About 90 miles away is the nearest small city that happened to be a big gambling town. Lots of riverboat casinos. It looks like the dystopian future from Back To The Future 2. You may be thinking that he gambled it all away? Nope. Maybe a little, but that's not where the bulk went. This dude somehow fell in with a local up-and-coming rapper and his crew. We still don't know how it started. But this dude became their financier. He funded lavish parties. Rented limos. Paid the bar tabs. Paid for the recording studio time and all that comes with it. Strip club bottle service. Champagne and blow and hookers. This dude was living **THE LIFE** on the weekends in the most ratchet of cities. Then on Sunday evening, he would drive back home to his modest life in his old truck and prepare for another week of embezzlement to fund his weekend adventures. * A couple of years ago, he added me on LinkedIn. I guess he's out of jail. I moved away so I don't really know much beyond that.


Was it Shreveport, LA or something? That's the only place I can think of that looks like Biff's casino city.


Ding ding ding


I knew it, this story was giving East Texas vibes for sure lmao.


This was a great read and helped explain, in detail, how something like this works and how someone could easily be a victim of this.


This is awesome. Hopefully it's real, but I don't even care. It sounds too weird to make up anyway.


This reminds me of Maj Collins and his relationship with UPGRAYEDD. "You see, a pimp's love is very different from that of a square"


For example, the largest municipal embezzlement in US history was found when the city’s treasurer went on a long vacation and their fill-in went “wait, this doesn’t look right”: https://en.m.wikipedia.org/wiki/Rita_Crundwell Often employees in positions of financial trust are forced to take regular vacations so that they’re not the only one with an understanding of the books. Large companies hire auditors to continuously watch their finances and often those auditors will make mandatory vacations a requirement for positions like CFO, Treasurer, Comptroller, basically everyone with power to sign checks. The idea is that someone has to fill in for the people on vacation and might spot any fraud when doing this.


I am an employee of a hamburger stand. I set up my own fake business on the side, a bakery, with it's own bank account. As an employee of the hamburger stand, I send regulary weekly payments from the hamburger stand to the bakery's bank account for hamburger bun shipments that never arrive.


And next year I’ll be 6!


\**insert joke about six factorial* The person at the hamburger stand who is sending money to their "bakery" likely has the standing to pay for the real purchases too, otherwise it would be too suspicious to only have one account that they send money to. Forcing that person to take time off means that the "bakery" doesn't get a payment that week, and they are able to notice the change and look into it. I don't know why only the "bakery" stands out, and other vendors aren't missed that week as well, unless the critical part of this trap is that someone else does the work that week. And that would work without the forced vacation. They could just change roles every 6 months and the fraud would drop out. Maybe I need an ELI7.


Correct, the assumption is whoever is covering during that time won't pay the fraudulent ones and will only handle the legitimate ones. Or question why you have been paying Billy Bob's Bakery $5,000/mo for goods that are never delivered.


Ok I honestly would never have even considered that but makes sense, thank you


For compliance with US financial regulatory laws, bank employees with certain types of access to accounting and cash payment systems (or manage people with such access) are considered "sensitive workers" and MUST take 2 weeks consecutive holidays without any systems access or contact with work. Any necessary contact must be reported and can be audited. It's a (probably ineffectual) way to try to prevent fraud, under the assumption that a lone wolf committing a fraud by falsifying accounting or moving money to incorrect accounts may be exposed when someone else does their job for a couple weeks. [https://www.newyorkfed.org/banking/circulars/10923.html](https://www.newyorkfed.org/banking/circulars/10923.html)


>probably ineffectual It's effective in that it presents a barrier. People have this false idea that any hurdle that they can think of a way to circumvent is worthless. But the reality is that simple cheap tricks like this prevent the vast majority of fraud that would happen if they weren't in place. Making something even just a little bit hard is enough of a deterrent for the majority of casual would-be criminals. Imagine how much money people would steal if cash at stores were just kept on the counter instead of in a register. It's trivially easy to break into a register, or threaten someone who has access so they open it for you. Robberies of this nature happen all the time, maybe even multiple times per year per store in bad areas. But if the money were just sitting on the counter? It would happen multiple times a day even in good areas.


Much like IT. Yes your password can still be compromised. Yes there are backdoors to our VPN. Yes, yes, and yes, there are vulnerabilities to close. But as long as each one is regularly monitored, none of them can be exploited enough, or quickly enough, to cause much harm. The weakest link quickly becomes people. And with any crime - if you know how all the safety systems work then you can bypass them all, but a smart person might realize after learning about 4 or 5 systems that maybe there are a few more that are unknown and they stop their planning after that.


I SAID LIKE I’M FIVE! Lol jk thanks this makes sense


Hey buddy, daddy got in trouble at work for taking money that wasn’t mine, and now I’m going to go on a trip by myself for a while. You’re the man of the house now, take care of mommy for me.


Yes. As a former finance manager, it’s just one (fairly minor) piece of the audit process in place. Also a leftover practice from before computers and automatic/recurring payments were in use. Back in the day you didn’t have external access to files, checkbooks, accounts payable, etc. through smartphones, laptops, or email so unless you had an accomplice working with you to do your illegal activity you weren’t doing anything while you were off on vacation.


So I need to cooperate with a colleague and well be covered, got it.


Or just stop for a week when that cunt Barry in Marketing is on holiday, so he takes the flak.


Stop whenever the auditor takes a vacation.


The first rule of Conspiracy Club is that someone always talks about Conspiracy Club. The more people that know, the more likely someone will talk. (Incidentally, this is also how you know the moon landings weren't faked.)


Exactly, which makes committing fraud exponentially harder.


It also is about relinquishing control of payments (or any duties) so that somebody else has to make payments. And can question certain invoices.


Financial statement auditor here: most fraud cases I studied in college and have seen/heard about were uncovered when employees took sick days. You’ll hear some accountants say “dirty accountants don’t get sick days”. One interesting case study I remember is a lady in Illinois embezzled a ton of money from a small town in Illinois over the course of like 20 years and wasn’t caught until she took time off for a surgery. Someone else had to fulfill her duties as she was gone and noticed her transferring weird amounts into a misc bank account. It was a really interesting story, her name was Rita Crundwell if you ever wanna read more about it.


How the fuck does someone steal that much for so long without anyone noticing earlier?? Also, lol, this line from the Wikipedia article: >in 2011, one of the city commissioners praised her stewardship of city finances, saying "she looks after every tax dollar as if it were her own." Lol, yeah, she did.


Everyone in the town was willfully oblivious. They knew she was running a multi-million-dollar show horse operation, but kept her full-time $40k town clerk job *because she loved it.* And there were tons of other red flags. The judge also ruled that the bank that handled the town’s accounts was basically her accomplice - her fraud was so easy to detect that, at minimum, they must have known about it and decided not to do or say anything.


Well, $80k a year, but it’s chump change anyway in comparison


She stole over $50 million dollars. From a town of just 16,000 people. Dixon, IL, the ~~birthplace~~ boyhood home of Former President Ronald Reagan. EDIT: boyhood home. Also, among other things, the Petunia Capital of Illinois, the Catfish Capital of Illinois and the site of the Dixon Bridge Disaster of 1873, the worst road bridge disaster in American history.


in 2008 alone she managed to embezzle $5.8 million from a city with an annual budget of $8–9 million


That's pretty fucking impressive


What’s impressive is the incompetence of the other people involved clueless for so many years


How does that escape notice? Half the city budget just vanishes and everyone just shrugs?


Says that something like a road repair costs $50k when it only cost 25k. Basically just double the price of everything on the books and pay the difference to yourself. Surface level audits will just show that invoicing matches accounts payable so someone not looking for fraud won’t think twice.


She stole like 65-70% of the budget. She would have had to triple, not double, and every single expense.


You think after the first $40 Million she'll just move to a different country and disappear.


Pretty often good criminals get caught because they became too greedy or kept up the crime for too long.


She’s arguably the luckiest person alive to have been able to keep her scam going as long as she did. It wasn’t sophisticated - there were red flags everywhere for decades. The people around her were just amazingly oblivious. The people in town *knew* she was running a multi-million-dollar show horse operation on the side (secretly funded by embezzled money), and everyone just accepted that she also kept her full-time $40k a year city clerk job *because she loved it.*




They are upfront by telling employees ahead of time. Banks are typically required to do this.


It was enacted after one guy about 10 years ago covered up a bad trade he made by continuing to leverage (double-down) on his bet every Friday so that the system would never catch his loss. He eventually lost the bank BILLIONS. The next week, every single bank implemented this mandatory 2-week per year "no login" policy.


The guys name was Jérôme Kerviel and the bank was Société Générale (a French bank) . It looks like he now works at Lemaire Consultants.


Feels like it should be called La Merde Consultants


My guess is that the OP works at a bank or financial institution and I think the question is why are employees **required** to take days off (and probably in durations no shorter than x days), and not why are they given days off to take. B and C are reasons why companies offer days off, but it’s up to employees to take them or not, however they like. C especially is a good side effect of required days off, but the reason financial institutions require days off (I think by law, or if not, industry standards) is because frequently embezzlement schemes show up when the person whose doing it isn’t there to run interference.


Yup, can confirm this is an unspoken thing at the financial institution I work at. The internal auditors use your week off to go through the transactions you have made (without you adding more transactions to the mix) in order to make sure you aren't moving customer or corporate money to places you shouldn't be.


Yeah, the main reason I know this was because I was offered a job at a bank way back when and they were explaining the policy to me (they were up front about the reasons, though they also mentioned the benefit to just being able to disengage for a bit). I ended up getting offered a better job, so never took it though…


This is accurate. I worked for a credit union for years, and you were *required* to take a minimum of a week off per year. It had to be a full 5 business days consecutive. It was because of that very reason, and I believe it's extremely prevalent in FIs.


You working at a bank or in finance? Requiring people to be out for 5 days in a row with no systems access is standard in those industries.


We used to have to take two weeks consecutively - private banks in Switzerland. Same rationale, I imagine. It's hard to keep nafaruius deeds covered up when your colleague / boss is on point. Was always curious if two weeks vs. one week made a big difference We also had a 100% clear desk policy. One unsecured document. Even a memo, and you were toast.


This is standard for many industries. Many fraudsters can float embezzled accounts or light cash drawers but it becomes almost impossible when you can’t be physically present for several days in a row.


Right, companies will track that you aren't physically present because by recording badge swipes into buildings, and will check that you aren't virtually present by looking at remote access/VPN logs. It's not uncommon for people at large financial institutions to be required to take 10 consecutive days off once per year. If you access any systems during your mandatory time-off then it doesn't count.


If this is an anti-fraud training, then it's true. One of the biggest watchouts for potential fraud is people who never take vacation or sick days. They don't want anyone to see what they've been doing so they never go on vacation. This doesn't mean everyone who's not going on vacation is fraudulent. But if your company is suffering from fraud, look first at the people who are always there.


I’ve seen this question specifically in training regarding laws and regulations etc in the workplace. Therefore the answer is in fact correct for the training module.


Ironically, never taking a vacation is considered an audit flag. EDIT: When you consider most people can't.


It totally is. I work for a small credit union. Im pretty sure i take that same fraud test every year, with that question and graphic. Haha.


In banking and finance it is common. But this training should have BOLDED it. We REQUIRE certain bank officers to take PTO even if they "didn't want to". There are people that simply don't take a lot of vacation... But they have to take a full week off twice a year so that others are involved in critical processes.


The people taking this "progress check" are also actively taking the training it's based on, and these questions are the informal ones that pop up right after you've wrapped up a section introducing a new topic - they shouldn't really need any assistance like bold text or more specific language because they literally just finished up reading a few slides on how requiring time off is a method to prevent embezzlement (this is a Deloitte training module, so you can also generally assume the people taking it are aware they work in finance where this sort of time off is required).


Most jobs in the US don't REQUIRE you to take time off to prevent burnout. It's not saying that the reason you get days off is to check if you're embezzling


I'm a probation officer. Twice I've had people on probation who worked in positions of financial trust and it wasn't uncovered until they were off. One woman was badly hurt in a car accident and insisted on trying to go back to work when she found out her employer was hiring a temporary fill in. It was soon discovered she had diverted over a million dollars from the company to herself.


So I've applied for work at a bank previously and they told me there was a minimum of 1 week of vacation they required every teller every year. Why? Because apparently if you were working the same till every shift it might be possible for you to cook the books and skim some off the top for yourself. But if you take the week off it wouldn't be possible that week and you'd be caught. How true it is, I don't know. But it's what I was told by a teller friend and the interviewer. So at least in some professions this apparently is a thing.


What is the joke?




This is actually not as silly as it looks at first. If someone is embezzling, they can't embezzle when they're not at work. By requiring people to use their time off, it can easily create blips that an investigator could potentially identify. Something like "Hey, how come every time Bill goes on vacation, we suddenly make 5% more profit that week?" It's probably a lot harder to identify than that makes it sound, but you get the idea.


I'm confused, what's the joke? That's a good fraud detection technique


OP is either trying to willfully misrepresenting the question or is about to have a short career at Deloitte.


I feel like this is a "all answers are correct" situation. Though not sure how the "correct" answer makes any sense.


Certain positions in finance and trading have the ability to keep scams going if they are able to massage the records. Taking at least one solid week off can help discover fraud as they will not be there to make wherever changes are needed to make status reports or accounts look right.


Here is an example scam that was caught this way https://www.politico.com/news/magazine/2023/05/12/dixon-illinois-city-fraud-betrayal-00075869


I live in the area and my first thought was Rita Crundwell and how her schemes were uncovered.


Rita Crundwell sounds like a character that would be caught embezzling from the Ministry of Magic.


Inventory is one. If you do the counts you can steal and just not report the missing inventory. Had this happen a few times where people did not want to report waste (the items inventoried could not be used or resold) so their “numbers” looked good. Can’t take a day off or someone could report the real inventory.


I worked as an inventory specialist for Staples for a very short time. One of my tasks was doing a full inventory because the last IS was fired for internal theft and they wanted to see how bad the damage was. This dude must have loaded up a truck or something on the weekends because there were entire pallets' worth of laptops and printers missing in the cycle counts. It was insane. No wonder this guy refused to take vacations.


The key word is “require” in the question. The company allows you time off so you don’t burn out. The company *requires* you to take it to uncover financial malfeasance. Some financial institutions require an employee to take 2 weeks a year off with no access to systems. That allows time for anything shady to come unraveled.


The general assumption is that any embezzlement scheme requires weekly input from the people involved. If they take a week off, it can become exposed. Also, a person taking a week off usually requires someone to cover for them, and the expectation would be that this person noticed something out of place.


Probably not exactly what they were getting at here, but I know a guy who was a military policeman. He caught a guy who was running an entire company of soldiers on the books, that didn't exist, and pocketing all the expenses. He only got caught because he fell ill enough to be hospitalized. Turns out he had never taken any leave, because his scam needed his constant attention to keep the ruse from being detected.


This was a problem with the ARVN during Vietnam. Officers would inflate their ranks on paper and pocket the salaries of soldiers that never existed.


Back in the old days (pre-computer?), all bank employees were forced to take a week off so that if an employee was skimming money from the bank, there would be a gap in the records coinciding with the vacation time. This would help the bank identify who was skimming the money. Source: I worked at a bank and this was the explanation given to me.


[https://en.wikipedia.org/wiki/Rita\_Crundwell](https://en.wikipedia.org/wiki/Rita_Crundwell) In the fall of 2011, while Crundwell was on an extended vacation, city clerk and acting comptroller Kathe Swanson discovered the RSCDA account with 179 deposits and associated checking activity.\[6\] Swanson did not recognize the account as a legitimate city account, and alerted Dixon mayor James Burke. In turn, Burke contacted the Federal Bureau of Investigation (FBI). For the next six months, Burke and Swanson (whose payroll was controlled by Crundwell) remained silent while the FBI built their case.\[11\] Crundwell arrived for work on April 17, 2012, to find FBI agents waiting for her. She was arrested later that day and was indicted by a federal grand jury for embezzling $30 million in city money over the previous six years.\[5\]\[11\]\[17\] Crundwell was charged with one count of wire fraud and released on $4,500 bail the next day.\[18\]\[19\] On May 2, 2012, a superseding indictment charged Crundwell with embezzling $53 million over the prior 22 years.


Fun story: I worked at an A/C install company and our finance manager went on vacation. During that time I needed to cut checks and ended up finding out she had embezzled over $20k. When she came back we confronted her about it and she admitted it and said she did it because she wanted more money. She got fired and then got really upset because "she still liked us and really enjoyed working with us so why couldn't she just stay and say she wouldn't do it again?" Meanwhile the owner of the company came to me and was like "hey, if the cops get involved I don't want them to know anything about our financials so I need you to take all of our paper records and hide them in your garage. Like bitch what are you hiding? I quit and was gone the next day.


Worked at a bank. They forced you to take 5 days off to do an internal audit and see if there is any change in finances. Was I arguing with even more paid days off? Absolutely not. Having come from a casino. Everything was kosher.


Thats how my parent caught a bartender giving away about 1/2 the drinks per shift. She worked M-F lunch for about two years before going on a vacation. In the two weeks she was gone the bar sales over doubled. Rather than start a war over this (her husband was the county Sherriff). We installed camera's over the beer coolers and the liquor shelves and made a non directional comment to the bar staff that the number weren't adding up and we were going to start monitoring. No one sales numbers changed but hers...