Embezzlement Cases At A 5-Year High, Report Finds
Released on Tuesday, the report from Marquet International, a Boston-based professional security firm, analyzed embezzlement cases in which at least $100,000 was stolen. And the report found that 2012 cases represented a five-year high, with 538 new arrests or indictments of workers who allegedly stole a total of $735 million. The number of new cases has been growing steadily by about 10 percent each year since 2010, the Marquet report found, noting that the amount embezzled each year seems to be getting "bigger and bigger."
Chris Marquet, CEO of Marquet International, blamed the uptick on the tough economy. "We know that major embezzlements usually take five years to be found out, so many schemes that began at the beginning of the crisis are just beginning to pop up," he told AOL Jobs.
Who Is Most Likely To Embezzle
According to the Marquet report, the embezzler is most likely to be a bookkeeper or treasurer, who is female, in her 40s, and without a criminal record. Nearly 2 out of 3 alleged embezzlers were female. Only 4 percent of them had prior criminal records.
According to Marquet, the reason many of the embezzlers are middle-aged is simple: They're most likely to have the opportunity. "They need to have risen to the level of authority in an organization where they are able to scheme against the company," he said. As for why accused perpetrators are most likely to be female, he said, "One reason is pure numbers. Bookkeepers and people in that role tend to be women." The Bureau of Labor Statistics reports that in 2010 90 percent of bookkeepers in the country were women, the most recent year in which statistics are available.
Even Religious Organizations Are Hit
The financial services industry saw the most cases of embezzlement by workers, in large part because, Marquet notes, "That's where the money is." The sector had 80 cases alone last year, each worth an average of $3.8 million, the report found.
But industries operating outside the financial establishment were also hit hard. One out of every 8 schemes from last year took place in a nonprofit or religious organization -- those two industries saw a combined total of 66 theft cases. That didn't surprise Marquet. These organizations typically "have very weak control systems," he said. "They're not operating on big budgets that allow them to spend money on accountants."
In fact, the 66 theft cases likely represent just the tip of the iceberg. Many cases go unreported to authorities, "due to embarrassment or a philosophy of forgiveness," according to a study published in 2010 by the Journal of Forensic & Investigative Accounting. That study notes that previous estimates have found as many as 15 percent of all U.S. churches have been victims; another 2007 study found that a whopping 85 percent of Roman Catholic dioceses surveyed reported that embezzlement had occurred in their dioceses within the last five years.
More To Come
Marquet predicts more worker embezzlement, not less, in the coming years. Many schemes from the beginning of the crisis are only now coming to light, and so "we are expecting high rates of embezzlement for the next several years," he said in the release. Indeed, one of the largest schemes in U.S. history only came to a conclusion last year. Last September, Peregrine Financial Group founder Russell Wasendorf pleaded guilty to stealing $215 million from clients; Marquet says it is the largest corporate embezzlement in U.S. history. He was sentenced to 50 years in prison.
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Dan Fastenberg was most recently a reporter with TIME Magazine. Previously, he was a writer for the Thomson Reuters news service's Latin America desk. He was also a reporter and associate editor for the Buenos Aires Herald while living in South America.
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