Automobile and Appliance Scheme

A charitable organization collected used automobiles and appliances for distribution to the poor. A warehouse worker, the nephew of the veteran warehouse manager, arranged to have deliveries of the used autos and appliances made to a friend, and the three would sell the autos at discounted rates to used car dealers and the appliances to pawn brokers. The organization’s books were managed by a young bookkeeper, but controls over the incoming and outgoing items were fairly loose, and keeping the scheme a secret was not difficult. However, the bookkeeper left for another job and was replaced by a more experienced bookkeeper who tightened the organization’s accounting controls and discovered the theft. Total Cost: More than $500,000.