Nardzie Stone was the youngest sibling of a family whose parents owned and operated a small manufacturer of flocculant equipment, Stone Pound Inc. (SPI). Nardzie was part owner and executive officer of the corporation, and she was responsible for all human resources and payroll functions. She approved all payroll timesheets, but an outside vendor generated physical pay- cheques based on Nardzie's reports on employees' net pay. She fraudulently issued payroll cheques to actual SPI employees who had either been absent during the pay period or who had left the company, thereby creating "zombie employees." Nardzie had no trouble falsifying records because she was the only one who ever looked at them. The company paid employees with physical cheques and sent them to Nardzie. Nardzie then fish out the fraudulent cheques, forge endorsements in the zombies' names over to her on the backs of the cheques and deposit them into her personal account. · THREE categories of fraud scheme and the one illustrated in the case above. · FIVE conditions that make an act a fraudulent act and state the level of fraud identified in the case above.
Nardzie Stone was the youngest sibling of a family whose parents owned and operated a small manufacturer of flocculant equipment, Stone Pound Inc. (SPI). Nardzie was part owner and executive officer of the corporation, and she was responsible for all human resources and payroll functions. She approved all payroll timesheets, but an outside vendor generated physical pay- cheques based on Nardzie's reports on employees' net pay. She fraudulently issued payroll cheques to actual SPI employees who had either been absent during the pay period or who had left the company, thereby creating "zombie employees."
Nardzie had no trouble falsifying records because she was the only one who ever looked at them. The company paid employees with physical cheques and sent them to Nardzie. Nardzie then fish out the fraudulent cheques, forge endorsements in the zombies' names over to her on the backs of the cheques and deposit them into her personal account.
· THREE categories of fraud scheme and the one illustrated in the case above.
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FIVE conditions that make an act a fraudulent act and state the level of fraud identified in the case above.
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