JACKSONVILLE, Fla. — A former Jacksonville Jaguars employee is accused of stealing more than $20 million from the team through a virtual credit card system. Even for a team valued at $4 billion, losing $22 million is a serious chunk of change. But could something similar happen to your small business?
The Jaguars are a powerful organization with one of the richest men in the world as their owner and this type of fraud happened to them. So if if could happen to the Jags, what about small business owners who rely on one of their employees to oversee the businesses finances?
While the Jags were busy racking up wins on the field, Amit Patel, their former financial manager, was accused of padding his own pocket with team funds. Patel faces wire fraud charges.
Kyle Schaeffer is a certified fraud examiner with H2 Advisors and said from his experience, business owners who fall victim to fraud put too much trust in a single employee.
"If you have someone with authorization to make a purchase or receive a payment who also records that payment, they can make it go away and act like it never got received," said Schaeffer.
So what are the best ways to prevent that?
"The biggest thing we can do is seperate duties in a firm, it's called segregation of duties," said Schaeffer.
That might be difficult for a business owner whose focus is on the trade that is the foundation of their business, rather than their finances.
"Any business owner is good at their trade, but they're not necessarily well versed in the business side of things," said Schaeffer, "they rely on their book keeper, their office manager."
Schaeffer said their are 3 distinct areas business owners should focus their resources in order to avoid becoming the victim of fraud.
"You can devote it to prevention, making sure it doesn't happen, detection, so you catch it if it happens and correction, making sure once it has happened it doesn't happen again," said Schaeffer.
In order to prevent fraud, Schaeffer also recommends that business owners work with outside CPAs more frequently than annually for tax purposes.
According to Amit Patel's attorney, Patel plans to plead guilty to the charges brought against him. Currently he does not have an appearance date in court.
For more information about H2 Advisors, visit their website.