As I have warned many times, no business owner thinks that employee fraud could ever happen to him. Yet, year after year, businesses are victimized.
Here’s a story via Victoria’s Times Colonist which illustrates this reality:
A B.C. government employee at the centre of a hiring scandal forged his criminal record check, and defrauded government by hiding his criminal past to get a job, a judge has ruled.
Judge Loretta Chaperon found Richard Wainwright guilty of forgery and fraud Monday in a Victoria provincial courtroom.
She said the case against Wainwright, which included expert testimony about how he altered a criminal record check form to use a last name that didn’t flag his previous convictions, was compelling.
“The Crown’s case is circumstantial but the evidence presented is quite simply overwhelming,” she wrote in her decision, released to the Times Colonist.
Wainwright was convicted of fraud, counterfeiting and possessing stolen identification in Kamloops in 2004.
He applied for a B.C. government job two years later. The government required a criminal record check. At the time, Wainwright was still serving a conditional sentence from his convictions.
It’s clear Wainwright knew having a criminal record would bar him from getting hired, the judge wrote.
So he used two different names to get out from under that record, the judge wrote.
Wainwright took the criminal record check under the clean surname of Perran, for which he also had a social insurance number, passport and driver’s license.
Then he altered the form to read Richard Ernest Wainwright-Perran and submitted it government, said the judge.
Wainwright was hired by government and worked his way up to a supervisor’s position in the Ministry of Children and Family Development before his two driver’s licences in different names were flagged by the Insurance Corporation of B.C.’s facial-recognition technology.
He was arrested inside a government office in April 2009, but kept his job until October while the government tried to get information about the case from police. Then he was fired.
The case became a public scandal for the provincial government, and led to strengthened criminal record checks for civil servants.
The government manager who hired Wainwright testified he would never have been given the job were his previous convictions known.
Did you follow all of that? This wasn’t some “small time” business that was defrauded—it was the B.C. government. The government has many more safeguards against this type of fraud than most businesses—and yet, a savvy individual was able to outwit them.
What’s the lesson to you, as a small business owner?
Even if you take the proper precautions when it comes to hiring and managing your employees, you must still remain vigilant. A forensic accountant will help you evaluate your financial records—and if fraud has been committed, it will be discovered. No matter how strongly you feel about the integrity of your employees, you can’t afford to take chances. If it can happen to the Canadian government, it can happen to your business. Don’t take any chances!