Robert Hartline talks to James Kennedy about his payroll fraud nightmare. He was baffled when he first came across suspicious numbers on his payroll but soon discovered that a contractor had stolen $300k from his business. In this episode, Robert urges listeners to be ruthless about double-checking transactions and verifying facts, and explains why American Greed should be on every business owner’s list of shows to watch.
What Is Absolute Wireless?
Robert started Absolute Wireless 21 years ago and now has approximately 380 people working in the organisation. He never planned to be in retail, but has learned a lot about it and has also learned a lot about sales leadership.
How Did Absolute Wireless Get Defrauded?
If you have ever watched American Greed and you’ve listened to those stories and asked yourself if this could happen to you… well, it could.
There can be somebody in your organisation who is super loyal, at work super early every day, never takes vacations and they are secretly stealing from you!
That’s what happened to Robert a few years ago. His organisation used a company to do their payroll services, which is considered to be best practice by many businesses. Every time he tried to get into the payroll system and take a look at the reports, he had trouble getting access.
Anyone running a fast-paced business knows that it’s easy to get distracted and not follow-up on everything that needs to be sorted out. He sat down one day and was looking at a cash flow issue and something just didn’t add up. He then used an employee’s login details to get access to these reports he had been looking for and saw a shocking and confusing report.
There was a man named “Michael” at the top of the list who made $106,000. Rob says that he knows everyone who makes over $100k in the organisation, which is why he knew that there was no way this man should be getting paid so much. After investigating this report some more, he discovered that there were other names on this list that had never worked for him in the past. He messaged his direct contact from the payroll company, and she told him these people had not actually been paid and it’s just an error in the report. Robert knew immediately that was not the case and the next day, he drove down to the payroll office and asked to speak to the manager. As soon as he said that he wanted to know what the actual chances of his data in his reports being mixed up with someone else’s data are, he was told it was impossible.
The FBI were then called as well as their insurance company. Luckily, the payroll company had an Errors and Omissions policy, which essentially means it covers fraud. Robert had no idea he was this protected and thankfully, he got over 300k back in the same week.
Absolute Wireless now has a process where when a payroll is run, all of the reports are compared against each other in order to make sure that everyone has been paid the right amount of money. The woman responsible for defrauding Absolute Wireless had to spend less than a year in prison.
Robert advises to always trust your gut about who you’re working with. He had an off-putting feeling about this person at the time.
We hope you enjoyed this brief episode of The Gross Profit Podcast!