In 2019, Mr. Luis Lee was the senior financial analyst for a health services provider in Fredericksburg, Virginia. Mr. Lee was promoted to treasury manager in October 2022, gaining the responsibility for monitoring the company’s bank accounts and payment processing, ensuring quality standards with third-party vendors, conducting risk and cash flow forecasting, and working with internal and external auditors.
Mr. Lee and a co-conspirator, the chief financial officer of the company, allegedly used their access to company finances to set up a fake vendor called JKemp Consulting LLC. To help the fake vendor appear to be legitimate Mr. Lee allegedly opened a business checking account for JKemp, and the CFO drafted a fraudulent engagement letter to pay JKemp $100,000 per month in exchange for “various strategic and consulting services.”
The two conspirators allegedly drafted and submitted 12 fraudulent JKemp invoices for a total of $1,140,000 then divided the proceeds amongst themselves. Through additional methods, such as taking company funds for unused vacation time against company policy, the conspirators misappropriated approximately $1,323,962 from the company.
Collusion by two high ranking members of a company can be difficult to unearth as illustrated in this case. The two conspirators were able to work together to embezzle funds due to having access to company accounts and being able to initiate payments which their subordinates would not question. This highlights the continuously changing industry of fraud and how maintaining current knowledge of methods and preventative measures can be beneficial.
Photo by Tara Winstead
