Remember all of the bars and restaurants named the “Library” or the “Bookstore” in college. You and your classmates would charge your fun to these places because you thought your parents would pay these charges without questioning them whatsoever.
It turns out that these scams are also effective in the real world. Read this quote from an IRS press release where a criminal complaint was filed against an accounting firm for tax fraud, wire fraud, and money laundering.
“Using Intuit QuickBooks software, Jerkins would initiate wire transfers out of his clients’ bank accounts and into bank accounts that he controlled or could access. Jerkins used Intuit QuickBooks so that these withdrawals appeared on clients’ bank statements with descriptions including “Intuit,” “Jerkins Business Sol,” or “Jerkins Business Sale,” which concealed the nature of these fraudulent transactions from his clients and made them appear as though they were for legitimate business purposes.“
Businesspeople should not blindly trust their vendors. Periodic audits conducted by the appropriate accounting and/or law firms is he ounce of prevention that will prevent a pound of financial losses.
David Seidman is the principal and founder of Seidman Law Group, LLC. He serves as outside general counsel for companies, which requires him to consider a diverse range of corporate, dispute resolution and avoidance, contract drafting and negotiation, and other issues.
He can be reached at david@seidmanlawgroup.com or 312-399-7390.
This blog post is not legal advice. Please consult an experienced attorney to assist with your legal issues.
Photo credit: 15 Fabulous Library Bars Around The World – BOOKGLOW
