On Feb. 4, Vanessa Vence-Small will report to prison to begin serving a 30-month term which will be followed by three years of supervised release. The former controller of Continental BMW of Darien (Conn.) faced up to 20 years in prison for embezzling a total of more than $1.1 million between October 2014 and June 2017.
If you’re wondering how the dealer lost more than $1 million in less than three years without noticing, don’t worry. She did. Paula Callari, president of her family-owned business, said profits and losses were clearly out of whack.
“We were all concerned of the dealership finances and that we were not making the profits we should have been,” Callari wrote in a witness impact statement, noting that employees were laid off and pay plans altered to make up the shortfall. “But month after month, nothing seemed to change and no one could figure out why. She had an answer for everything but would reassure me that things will be so much better by year-end.”
By the time Vence-Small, 50, was fired, she had managed to issue and sign 28 fraudulent checks, execute 65 unauthorized EFTs, and rack up $31,452 in personal credit-card charges and reimbursements. The money went toward first-class vacations for herself and her husband, renovations to their home, clothing, cosmetics, plastic surgery, and — perhaps most egregiously — a $50,000 Ford Mustang. That’s despite the fact that she earned an annual salary of $150,000 and enjoyed the free use of a new BMW.
Now she has to pay that money back, and it won’t be easy. The Mustang was worth less than $29,000 by the time she forfeited it. Every dollar of the money spent on contractors and plane tickets is gone forever. She will very likely spend the rest of her life putting a significant amount of her post-conviction income — which is not likely to reach six figures anytime soon — toward her court-ordered restitution.
Embezzlement is a persistent concern among dealers and other owners of small to mid-size businesses, particularly those in the financial services realm. A definitive 2013 study by Marquet International estimates about 500 “major” ($100,000-plus) embezzlements are discovered in the U.S. each year, most commonly in the form of checks written from the business to the embezzler, one or more of their creditors, or some entity the embezzler controls.
Marquet’s analysts found the vast majority of these schemes are undertaken by one person. Women are more likely to commit embezzlement, but men steal more than twice as much.
Remarkably, only 7% of embezzlers in Marquet’s study had prior criminal convictions, and most were 40 or older. How does one become a criminal out of thin air at that age? Cognitive dissonance, says management consultant Jonathan Shipley, who discussed the topic in an October 2017 LinkedIn post.
“I might, for instance, believe that eating deep-fried food is bad for my body, but eat it anyway. Why? Because it’s delicious, of course! However, this disconnect causes mental stress, requiring me to come to terms with the internal inconsistency,” Shipley writes, adding that, by the time they are caught, many embezzlers no longer consider themselves thieves. “In fact, if asked, the majority would continue to tell you that embezzlement is wrong. Their attitudes and perceptions toward their own actions have shifted to correct the cognitive dissonance they are feeling.”
It may seem impossible to justify the theft of any amount of money from anyone, let alone hundreds of thousands of dollars, but it happens. “Justification” is one of three points on famed criminologist Dr. Donald Cressey’s “fraud triangle” (alongside “individual pressure” and “opportunity”). In his groundbreaking 1953 treatise, “Other People’s Money: A Study in the Social Psychology of Embezzlement,” Cressey found many embezzlers justified their actions because they felt they were underpaid, felt their employer was dishonest or greedy, or planned to repay the funds they stole.
Experts agree employee theft in any form is very difficult to prevent but not that difficult to uncover. Recommendations from the Marquet study include adhering to strict, standardized controls over company finances, with no exceptions for long-term or otherwise “trusted” employees; those who never take a vacation may worry their fraud will be uncovered while they are away. Surprise audits by specially trained forensic accountants will quickly reveal even the most sophisticated scheme.
Finally, analysts say, when thieves are caught, they should be reported. When business owners sweep embezzlement under the rug, they lose any chance of recovering the funds and the perpetrator goes off to find another victim. This may have been the case for Vence-Small, who prosecutors say committed similar, unreported crimes at two prior jobs, one of which was at a dealership. Perhaps those employers preferred to sweep the fraud under the rug and move on. That decision would be understandable, but tough to justify.
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