Diary of a Bad, Bad Bookkeeper - (Day 97) The Shell Company Con

Another day, another dollar...or at least, anotherI think I'll go test drive a Toyota Prius.  It's a
stolen dollar.very energy efficient car.  After all, it's my moral
Well - I've had my own company for about twoduty to save the planet.
weeks now and I've made a couple thousandA Little More Information About This Kind of
dollars skimming off the deposits.  The bossScam:
hasn't noticed.  As far as he's concerned, all ofThis scam is commonly referred to as a shell
the invoices are paid, and I'm doing my jobcompany scam because the embezzler is paying a
incredibly well.  In fact, I just passed the threevalid company for services that were never
month trial period, and the boss gave me a $0.50rendered or products that were never delivered. 
an hour raise.  When he told me that, I felt likeThus, the company is solid with a banking history
saying, "Really?  A whole $0.50 an hour.  You'rewhile the transaction is nothing but air.  Any teller
too kind.  Now I can buy that car I need."  Butwill cash that check without qualms and hand over
instead, I didn't.the money to whomever's name is on the
Still, I do need a new car.  Fifty cents an hour isaccount.
only an extra $1,040 per year.  That's not evenThis scam is also often pulled when a payment is
going to pay for a cup holder.  My car is breakingmade to an individual or an employee.  The
down and dying in the most inconvenient places,embezzler's excuse might be that this person was
so I really just want to get a new car.  I don'tjust a subcontractor for the day and was paid
really need anything fancy, but the best cars areunder the table.  Many times, the embezzler will
at least $20,000.  I need to figure out how toeven go so far as to pay someone they are
get a bigger down payment.  I want to putfriends with, and then let the friend take a portion
down at least $5,000, but the way things areof the embezzled funds.  They can steal for a
going, that's going to take a couple more weeks. long time this way without getting caught,
I have no idea if my car can make it a coupleespecially because the owner gets used to seeing
more weeks.that name.
I thought about starting another business, but ITo Stop This Scam:
don't really want to pay another $100 or so forIt's important to do your homework.  If you
the licenses...plus, the time it takes to go to thedon't recognize the name of a company, or know
bank and get another account...I'd rather not.anything about the transaction that took place,
But I did come up with another idea.  I wrote athen ask questions - lots of questions. Ask who
check to Johnson Hauling for $1,500.ordered the product or services.  Whoever
"What's this check for," the boss asked me whenrequested the order - sometimes it might be
I gave it to him to sign.  I had been hoping heanother employee - it's important to ask them
wouldn't notice it, since I slipped it in with a bunchwhy they placed that order.  Ask to see a
of other checks.  But since he had...Purchase Order, Shipping Receipt, or an Invoice
"That's a new vendor we're using," I told him. from the company.  Go and look at the service
"We needed to haul away a bunch of left overthat was done or the product that was
trash and remnants from the newest renovationdelivered.  Talk to someone at the company for
project, and they were the best deal.  Theywhich the check is written too and make sure
delivered a trash can to the project, then hauled itthat they actually delivered the product or
away when they were done."service.  A good rule of thumb is this... If the
In case I didn't mention it, the company I workpayment is for a new account - whether a
for buys, renovates and sells houses.  So payingvendor, employee, subcontractor, or customer -
$1,500 to haul away remnants was not thatdemand proof.  Make contact, or ask for
uncommon.paperwork.
"Okay," he said, distracted as he signed the nextWarning Signs:
check, and then the next.  Finally, he handed meIf someone is colluding with the embezzler to
the pile of checks and gave me a dismissivesteal from you, they may look you straight in the
wave of his hand.eye and lie about what they've done for your
I left the office triumphant.  The truth was, Icompany.  That's why it's important to go with
didn't need to create another company becauseyour gut when you meet someone.  If you don't
Johnson Hauling is my husband's company.  Thelike them, "fire them."
check that he had just written, I was able toAlso, if you ask for paperwork and it doesn't
cash at the bank because I'm a signer on thehave an address or phone number, be
Johnson Hauling bank account.  My husband willsuspicious.  Valid companies automatically put
never know that I got this money because I cantheir contact information on all their paperwork
just cash the check.  And the boss has neverbecause they want to make sure they get paid -
met my husband, so he has no idea that myand if you can't call them with questions, you
husband and I have different last names.  Thewon't be paying.  So, ask for the invoice or
result... I am now $1,500 closer to buying my newstatement, and be very, very slow at paying
car.anyone you're suspicious of.