Right Working Romantic Related Learning Friendly Healthy Legal Inspirational Unfiltered

Fraud For Dinner, Prison For Dessert

, , | Legal | February 2, 2019

(A business guest who has stayed with us for around a week comes to check out. Even though he was here for business and his company had booked his room for him, he brought his wife, which is not a problem for us, but the company explicitly said they will only pay for one person. So, we split the bill into his stay and his food and beverage consumption and a separate bill for his wife’s consumptions, which he will have to pay himself.)

Guest: “All the food is split up.”

Me: “Yes, your company will only pay for your food, but you will have to pay for your wife.”

Guest: “Yes, but can’t you just wrote ‘Dinner’ and the full amount without specifying how many people ate?”

Me: “No, this is an automatically generated bill. When you go to the restaurant, they type in what you order and that’s how it appears on the final bill.”

Guest: “Can you not… change it? I can say it was very expensive, but that it was only me eating here.”

Me: “I’m afraid we can’t do that, sir.”

Guest: “Well, why not?”

Me: “Because modifying a bill is fraud and if your company finds out they will not do any business with us again.”

Guest: *grumbles and pays*

(Seriously though, your wife stays with you for free and you only pay for her food? Isn’t that enough?)

Taking Inventory: I’m Afraid I Can’t Let You Do That, Dave

, , , , , , | Legal | February 1, 2019

This story happened to a friend of mine. Let’s call him Dave. We like to think of it as the moment he went from small-time to big-shot.

Dave is a new systems administrator for this company but has been working in IT for close to 15 years at this point. The last admin retired with little warning, so Dave was hired with the understanding that he would be getting no training and would have to figure out the system more or less by himself. One of the earliest projects Dave is given is creating a proposal for the annual IT budget. He takes an inventory, crunches some numbers, and submits a budget of $495,000.

A few hours later, one of the VPs drops by and asks him to recalculate his budget. Dave gets an anxious vibe from the guy, so he doesn’t ask too many questions and goes back to the drawing board. Figuring there must be some financial issues he is unaware of, he tries to find places where he can save some money and skimp on costs, finally resubmitting a proposal for $460,000.

The next day, Dave is called into a meeting with the CEO, the head of accounting, and two senior VPs. They’re concerned about his budget and ask him to review it with them and explain the numbers. My friend obliges. He points out the cost of equipment currently in production, expansion based on the company’s estimates for growth, and the standard wear-and-tear replacement cycle for the servers, plus padding of ~15% for unforeseen costs. They ask why he was using that inventory list and not the one they provided, and he responds that he never received an inventory list and had to make this one from scratch. Apparently, someone had forgotten to give it to him.

The execs talk among themselves for a bit, then decide they want to double-check the inventory. Dave had previously called the server centers and satellite locations to get inventory counts, but now they decide to check each location personally. Over the course of two days, Dave ferries one of the VPs from location to location, checking every item on the list. He actually finds that several items have been depreciated due to age and failure, so his list is even shorter than he thought. After all this checking and making sure nothing needs replacing and a final bit of calculation, he submits a final budget closer to $380,000.

By now, the execs are mad. They tersely thank Dave, and he doesn’t hear from them all weekend. By this point, he is extremely nervous that he has done something wrong and he is going to lose his job, and picking up a job like this isn’t exactly easy. When he gets in on Monday, he’s called into the CEO’s office yet again.

It turns out the previous administrator had been putting in budgets in excess of $700,000 for the past four years, with the last before his retirement just scraping over $1,000,000. They show Dave the inventory sheets and math the old admin had submitted and they showed an artificially bloated system that didn’t exist — literally hundreds of servers that the company simply didn’t own. Turns out the guy was making the purchases, showing the receipts to accounting, then selling them to friends and family for a fraction of the price and pocketing the profit, which is how he was able to retire at 40, and why he insisted his inventory sheet be given to his replacement. He had effectively embezzled nearly two million dollars that they could prove, and an unknown amount that they could not.

Regardless, they got the court to freeze the guy’s funds, got a warrant for his arrest, and put him in prison where he belongs. They weren’t able to recover most of their money since he didn’t keep records of who he sold to, but the reduced IT budget at least helped them absorb the blow.

And that’s how one misplaced inventory sheet made Dave into a big-shot at his company.

In Soviet Russia, Tax Frauds You!

, , | Legal | January 7, 2019

(I work in a hotel. A Russian guest in town for business purposes checks out, pays for his stay, and is handed his bill. He reads it carefully, practically staring at it.)

Coworker: “Is something wrong with the bill, sir? Did I misspell the name of your company?”

Guest: “No, not name.” *says something in Russian* “Breakfast!”

Coworker: “Oh, if you need a separate bill for the breakfast, that’s not a problem.”

Guest: “No! Tax!”

(The tax on the breakfast is actually higher than the tax on the hotel room itself, so we think that this might be confusing to him and that he probably thinks it’s too expensive.)

Coworker: “Sir, these are the tax rates in Germany. I’m afraid we cannot change that.”

(The guest still seems unhappy and mumbles something under his breath. Finally, I get what he was trying to say.)

Me: *to coworker* “Gosh, he doesn’t want to have the tax on the breakfast adjusted; he wants us to adjust the tax on the room and make it higher! That way, he’ll get more money back from his company than he actually paid here!”

Coworker: “Sir? Is that what you wanted us to do?”

Guest: “Yes! Yes! You can change for a new bill?”

Coworker: “No.”

Guest: “Why not change?”

Coworker: “Because that would be illegal. Have a nice day, sir!”

(He left rather disappointed.)

Crashing Headlong Into Jail Time

, , , , , | Legal | January 4, 2019

I work as the compliance manager for a haulage company. My job largely involves making sure the drivers follow the numerous laws, restrictions, and regulations placed on haulage drivers in the EU; however, my side job is that I handle all incidents or crashes involving our company vehicles, accident reports, statements, CCTV footage. It’s all run through me, and I send things off to the relevant parties who need them. Many of these accidents are very mundane, drivers reversing into posts or clipping someone’s mirror off. Every now and then, though, I get something rather more interesting.

In spite of the risks involved in deliberately taking a hit from a vehicle many times the size and weight of a regular car, lorries have always been a hot target for cash for crash scams. The arrival of full-coverage onboard cameras in the last five to ten years has somewhat reduced the amount of these scams in recent years, but we do still get one now and then. This one was a particularly brazen effort.

Our driver was travelling down a motorway at the vehicle’s top speed of 56 mph. The road ahead was clear until a Range Rover pulled in front after overtaking; the Range Rover was very slowly accelerating away, so our driver took no action. This continued for a further half a mile or so, and the Range Rover was 60 or 70 feet ahead when a BMW tore past our driver and dove in front of the Range Rover.

The BMW braked very briefly, but the Range Rover slammed onto the brakes and didn’t let off them. Our driver braked hard himself, but with passing traffic keeping him in his lane, he had nowhere to go but straight into the back of the Range Rover.

Our driver had a load of uncut steel on at the time, and his total vehicle weight was in excess of 40 tons. Our driver was still going just over 40 mph when he hit the Range Rover which by this point had nearly stopped. The impact was devastating, completely caving in the vehicle up to the rear axle, and sending it spinning into the embankment to the side of the road where it proceeded to roll before landing back on its wheels.

Further footage from the onboard camera showed our driver running to the vehicle whilst ringing the emergency services. The occupants of the car were an adult couple and two children aged 11 and 7. Both children, amazingly, were able to exit the vehicle unaided, but the parents were both removed by the ambulance crews.

The police took copies of our footage at the scene, and after reviewing it, released our driver without charge after concluding he did the best he could under terrible circumstances and that the accident wasn’t caused by negligence on his part. The following day, once his vehicle had been recovered and I received the footage myself, I had issues with several aspects of the crash, chiefly the extreme brake response exhibited by the Range Rover which led to the crash.

I passed the footage on to our insurance group citing possible insurance fraud. After reviewing it themselves, our insurance agreed and I left them to it.

They came back to me only a few days later regarding this incident to confirm that it was being treated as an attempted cash-for-crash scam and that the police were involved. It was several weeks later before they returned to me again with full details.

The couple in the Range Rover had conspired to take part in the scam, and had put their unknowing children in the back seats as extra collateral; however, the mother, who was driving, had braked much harder than intended, which caused the accident to be much more severe than they had intended. They might still have gotten away without charge had the BMW that cut them off not been owned and driven by the father’s brother.

As it was, the couple and the man’s brother were all arrested on charges of insurance fraud, dangerous driving, and reckless endangerment. The parents were also charged with child abuse for involving the children. They all received sentences of five to ten years, and the children were sent to the mother’s parents to live whilst their parents served their sentences.

Fifteen years ago, before dash cams were really a thing, this crash would have seen our driver likely lose his license and possibly face criminal charges. Crashes like this saw my company adopt vehicle cameras fleetwide six years ago, and now, thanks to them, we’ve defended against dozens of scams that would have cost our company thousands upon thousands of pounds otherwise — not a bad investment.

A Product Of Fraudulent Taxes

, , , , , | Legal | November 21, 2018

(I work for a woman who has a fashion and jewelry import business, and she is trying to set up sales reps in other cities. She has just sent one rep a sales kit of some somewhat pricey jewelry, and the rep has ghosted us, stealing the jewelry. My boss’s solution for this?)

Boss: “Well… tax season is coming soon; maybe we’ll just 1099 her for it.”

Me: “What do you mean?”

Boss: “We can say the product was her payment and put it on her 1099! Then we’ll get it as a tax credit, and she’ll have to pay for it in her taxes.”

Me: “Uh…”

Boss: “We can even say the product was worth a lot more! Like, we can put [amount ten times the product’s value].”

(I’m starting to feel like this is sketchy.)

Me: “I don’t think we can. That’s fraud.”

Boss: “Who’s going to find out?”

Me: “[Rep] will report us to the IRS.”

Boss: *most arrogant tone possible* “How can she? She’s the one committing a crime!”

Me: “She has proof the items in her kit weren’t really worth that much. We sent out a packing list to all the reps, saying what products we sent them and what the value was.”

Boss: *deflated, so disappointed she doesn’t get to commit tax fraud* “Oh, yeah. Okay, so we can’t do that… but we can still put the value of products she got on her 1099 as compensation!”

Me: “I don’t think this is a good idea. Why don’t we just contact the police in her state and report that she committed theft?”

Boss: “That’s too hard.”

(Her accountant, who was probably also kind of shady, said that “payment in product” was a totally legit thing to put on a 1099, so as far as I know she went ahead with this scam. I don’t know; I quit — after tax season, to make sure she didn’t get mad at me and send me a bogus 1099 saying I had been “paid in product” ten times more than my actual salary — and got a job where the boss didn’t try to implicate me in fraud. My old boss is still in business, last I heard. I feel bad for her employees.)