Billing Scheme Fraud Case Study

1155 Words 5 Pages
Introduction and Background:
In 2002 Cecile Nhung Campbell was working as a CPA at the KIA headquarters in Irvine California. She and her husband, Mel Wayne Campbell, were in deep financial trouble. They had taken out two hug home equity lines of credit and were deep in debt. She was frustrated with her job and needed a way to get money fast. Part of her job was to process the invoices for U.S. Customs. And that is where she saw her opportunity.
The Fraud:
Her and her husband decided to implicate a billing scheme fraud. A billing scheme fraud can be easier to commit because it does not require any access to cash. In this type of fraud the perpetrator commits the fraud in such a way that the company pays the fraudster the money instead of the
…show more content…
The accounts payable even issued money transfers to the US customs when they normally issued checks, something that should have raised red flags. The fraud was eventually caught on a simple issue that Cecile had overlooked. The nature of the US custom invoices was to pay the US government for the import fees brought about by importing the cars. This means that it would be highly unlikely for one invoice to be the similar as a previous invoice in a small time frame. Cecile had gotten lazy and submitted two invoices with very similar amounts. This raised the suspicion of the internal auditors. When they dug more into the invoices they saw that the invoices had been paid with a wire transfer, something that was abnormal and against normal procedure. As soon as the internal auditors had sufficient evidence against Cecile they contacted the local police who were able to obtain search warrants for the bank records of Cecile and her husband. Once they had access to their bank records and transactions prosecutors were able to find the money trail that Cecile had not been careful to cover up. Cecile, Mel, and Ho were soon arrested in June of 2006, a full 4 years after the first billing invoice scheme took place. Cecile was sentenced to six years and four months in prison, her husband received four years, and her brother received two years and four months. …show more content…
If accounts payable had stuck to the normal procedure and paid the bill via check, Cecile would not have had access to the money because she did not doctor the address on the invoice. If she had doctored the address, and KIA had an approved vendors list that included addresses, accounts payable could have referenced that list and seen that the addresses did not match up. In order for this to not happen again each vendor should have a payment method that is the set method. If the payment needs to be different than the set method the bill needs to be submitted to accounts payable, that will then submit it to a supervisor. After the supervisor has verified the invoice he can sign it and send it back to accounts payable to be processed. This will help to further segregate duties to make sure that not one person is in charge of too much of a

Related Documents