Law Firm Prevents $1.1M Embezzlement with Segregation Controls
A regional law firm implemented vendor payment controls that exposed an attempted embezzlement scheme by a long-tenured employee.
The Challenge
The firm had experienced a previous embezzlement incident at another office involving fictitious vendors. Leadership wanted to implement controls to prevent similar schemes while maintaining operational efficiency for legitimate vendor payments.
The Approach
VenLink implemented segregation of duties controls requiring multiple approvals for new vendors and vendor payment changes. The system flagged unusual patterns including new vendors with P.O. box addresses, rapid payment frequency to new vendors, and vendor bank account changes.
Implementation Timeline
How the solution was deployed and results were achieved
by Managing Partner
The Outcome
Within three months of implementation, the system flagged a pattern involving a newly created vendor receiving multiple payments. Investigation revealed an accounts payable employee had created a fictitious vendor and was processing payments to their personal account. The scheme was detected after $12,000 in fraudulent payments, preventing an estimated $1.1M in losses based on the employee's planned payment schedule.
"The controls paid for themselves in the first quarter. We caught something that could have gone on for years."