How to make or steal a lot of money
These scams all play on human greed, fear and emotion, and use social engineering to con folks out of their cash. A good example is this scam from The Real Hustle where they take a car straight off the showroom court without the salesman even realising what was going on: So simple, and yet not something that most people do. The ten most common scams, according to moneywiseare: You will receive some form of correspondence via post, a text message or automated voicemail, informing you that you have won a major prize and all you need to do to claim it is call an premium-rate number. You will invariably be kept on hold for a long time, all the while racking up more costs.
My company had a large number of credit cards issued to company officers and sales people. All of the cards were issued by the same credit card company. We made a lot of purchases on the cards, which meant that we had to pay down the balances several times per month.
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It just so happened that she had a card issued by the same bank, and she simply paid her credit card along with ours. But how did she almost get away with it?
She solved the problem by recording the expense in the prior year! Adding a transaction to a prior year changes the year-end balance of an account called retained earnings near the very bottom of your balance sheet.
- Даже клочка бумаги.
Accountants would be immediately suspicious if the numbers were different. She solved that problem every December by changing the transactions back to the current year.
To make a forecast of payouts to our investors, I had to dig into the books. She had made the notes so that she could find her antedated entries and change them back at the end of the year. I started asking questions, and she finally admitted what she had been doing. That whole scheme appears pretty sophisticated, but any good bookkeeper with a little cunning and sufficient incentive could do it.
So what could I have done to prevent the theft? I could have paid more attention. My experience has shown that the victims of embezzlement are shocked to the point of disbelief when they discover it.
I could have trusted my instincts. Many times it just seemed to me that we should have had more money in the bank than we did.
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Turns out my instincts were right, but I never acted on them. I could have password protected prior year entries. Most software has a setting that requires a password in order to make entries into a prior year. Most importantly, I could have used an outside accountant to close our books each month.
- Print icon Resize icon I always knew it was possible to fool the American financial system.
- Then, when my business declares bankruptcy in a few years, I can keep the money, declare a loss and pay less taxes — just like the President!
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An outside accountant would have reviewed the retained earnings account each month and spotted the changes. Instead, I had my bookkeeper close the books. I trusted the fox to guard the henhouse.
Although the explanation is a little tedious for this short article, there is another method that will spot prior year entries, even if they were made with the permission of passwords. Email me, and I will send you the steps to implement the method.
I am writing this article about two weeks after a client of mine caught an employee stealing from his company. Talk to your outside accountant about how to guard against embezzlement.