PBTK Case Study #1: Employee Fraud Investigation
PBTK was retained by a locally-owned casino to investigate and quantify the losses to support an employee theft insurance claim that was perpetrated by a key employee. Following that investigation, we assisted the State of Nevada Gaming Control Enforcement Division in its submittal of the matter for prosecution, and then supported prosecution of the suspect by the Clark County District Attorney’s Office.
Procedures included performing background research on the suspect, considering the financial and accounting processing environment, identifying and isolating suspicious transactions and those subject to influence by the suspect, testing selected transactions, and quantifying the theft loss.
Background research; evaluate and understand financial and accounting processing systems of the casino/hotel that may have been preyed upon; identify transactions subject to potential manipulation; conduct interviews of management and the suspect.
Investigative Accounting Procedures:
Analyze the support for identified cash payouts; physical inventory of all computer equipment; independent assessment of purchase quantities and costs; analyze falsified invoice files from a recovered compact disk.
Quantify the Theft Loss:
The loss amount of approximately $500,000 was determined by aggregating fabricated invoices that had been identified based on our independent physical inventory and estimating the inflated purchase costs using financial analyses and extrapolation.
This claim was accepted by the insurance carrier, which promptly paid out the policy limit under the employee theft coverage of the insurance policy. The perpetrator was indicted and entered a guilty plea for his offenses.