Yesterday’s Press Democrat tells the tale of a winery employee who almost got away with embezzling “nearly 1,000 bottles of Bordeaux-style red wine” some valued up to $175 each, for a total of almost $200,000 worth of wine. The former customer service employee, based at the winery’s distribution center, managed the scheme by creating fake shipments of wine, which he labeled lost. He then sold the wine online, with the aid of two other individuals.
Company officials spotted the wine (which hadn’t yet been released to the public) being sold online and were able to bring the embezzlers to justice.
Without knowing the complete details of how this employee committed this crime, I recommend that you take the following steps to reduce the likelihood of a similar loss in your winery:
1. The individuals who verify shipments or receipts of inventory should not be able to make inventory adjustments in your accounting system.
2. Lost shipments should be verified with the carrier of record, who would be liable for damages.
3. Returns should be pre-authorized by a regional sales rep or someone other than the distribution center employee.
In most cases, proper segregation of duties can reduce the chances that any single employee can perpetrate a fraud like this. Basically, every company should take steps to assure that no single individual has control over all phases of a transaction.