Great Women In Fraud

Episode 51 Cheryl Obermiller, Fraud Points, Part 2

September 28, 2021 Kelly Paxton, CFE Episode 51
Show Notes Transcript

We are back again with Cheryl Obermiller aka the Pothole Queen and the author of Fraud Points.  I really hope you came back for more Cheryl because this episode will have you laughing and thinking differently.  Do you have a gun safe?  What do you put in the gun safe?  Where do you put your checks? I really think this episode needed to be 2 separate episodes because of all the information Cheryl has about her embezzlement aka pink collar crime experience.  

Have you ordered her book yet?  Either for yourself or for a friend who owns a business?  

Cheryl and I have been messaging each other and I can’t tell you how lucky we are to have her as a guest.  We hit it all when it comes to #trustisnotaninternalcontrol and it’s not all about the money.  Have you reached out and connected on LinkedIn?

Let’s get going.

00:36:58.500 --> 00:37:14.550

CherylO: In my complete failure to find a process that would address it at this point it's like a sick obsession I started reading hundreds of them... I was very much the norm, I wasn't a weird outlier.


00:37:36.360 --> 00:37:53.010

CherylO: And, despite the fact that agent Jay was absolutely awesome.  The number one item on my bucket list is to never again be involved in anything that requires my own personal FBI agent on speed dial so they're just they're eager. 


00:38:08.490 --> 00:38:23.880

CherylO: And I realized after reading enough embezzlement cases I started seeing the patterns. It doesn't matter that there are 487 different ways that they got hold of a check and used it. The common denominator is they got one of your checks. And it doesn't matter that they found another 497 ways to cover that in your accounting system.


Nobody can mess with your online bank account that's where the rubber meets the road when is in your online bank account is what happened.

And that's when I developed my own system which is called Fraud Points. 


00:38:58.140 --> 00:39:12.000

CherylO: If you lock your checks up and you only give them to people when needed that's great, but if you never get on the online bank account to verify that those checks went where they were supposed to include the bank that's a fraud point. So you got it's like the little things we did when we were kids and you got to connect all the dots are the little picture doesn't make any sense if you've got missing dots that's for money can leak out.



00:39:22.770 --> 00:39:36.120

CherylO: And so I developed my own system to deal with the most common kinds of fraud and the three things I tell people every business owner every day and everybody can start this today, there are other things.



00:39:36.420 --> 00:39:42.720

CherylO: In the book that I talked about that are going to be none of it cost any money but it's a little more of a process to kind of implement.


0:40:14.700 --> 00:40:21.210

CherylO: Before I was embezzled I kept my guns in the guns day and my checks and the dust storm.


271

00:40:21.480 --> 00:40:35.730

CherylO: But now that I've lost a million dollars I keep my checks in the gun safe and my gun in the desk drawer and I sleep much better and then people laugh until they realize, and I know we're not on video. I'm not joking.


00:40:38.250 --> 00:40:43.560

Kelly Paxton: Oh, I wish you guys could be on video, and I did pull a 38 revolver out of my desktop just so you know.



00:40:43.980 --> 00:40:54.240

CherylO: And I've never yet threatened the accountant, but if somebody kicked in my office door and is here alone late at night I will call Smith and Wesson first and that.


00:40:56.670 --> 00:41:00.690

CherylO: I mean it's a joke, but the point is secure, your checks, there was a  lot in there, sitting on top of the checks, when I get a check out I sign it out, I look at every check number I pulled check numbers for my accounts payable.



00:41:09.810 --> 00:41:25.800

CherylO: I write down I took these 13 checks from check number one through check number 13 those checks, I signed out for accounts payable and I signed those checks that I printed all the checks after I've reviewed the payables I signed them.


00:42:25.530 --> 00:42:40.110

CherylO: Watch your checks...do something similar with my credit cards, nobody can take out what's on your online account so you've got to let people like what's the source document well.


00:42:41.790 --> 00:42:43.320

CherylO: Look at the source documents.



00:42:44.010 --> 00:42:45.930

CherylO: But to be fair to business owners. One of the business gurus tells us do what you're passionate about let other people do that other stuff well business owners are passionate about their clients being happy and promoting their business.

But turns out what I'm also really passionate about is not losing million dollars so I've learned to spend a little bit of time, making sure that that doesn't happen again.



00:43:08.190 --> 00:43:16.590

Kelly Paxton: So I was listening to he said world famous speaker and he was talking about his business and he's like they go well you know how do you keep track of your money.



00:43:17.310 --> 00:43:33.390

Kelly Paxton: And he goes every Friday morning my financial person calls me and tells me what's in my bank accounts and like literally I'm on a run and I want to like stop and scream and it's like trust, but verify like come on dude and and.


What you're saying here and the thing is is we have fraud, and we have Bernie Madoff and we have Enron we don't it doesn't affect us you getting ripped off it took years for you to do that so where's Tammy now, how do you know, do you track her I bet you track her.


00:43:54.810 --> 00:44:01.950

CherylO: I do you know what she's still living in the area, the only reason that I know anything about her is she works at a hospitality business where sometimes people that know me that have worked here, or like service providers, for me, will run into her and fear there and they're like I saw her at this place and I want  I’m gonna look she's paid or press you know she I get restitution she served her prison sentence.  Her life is destroyed, she has a four-year accounting degree. It's useless. 


00:45:28.410 --> 00:45:34.740

CherylO: Between the two of us, I got the better end of the deal, I got the better end of the deal my life sucks for a while. I got a lot smarter my business is twice the size, it was before my embezzlement I know where every penny is I make a lot more money. My life is good, she spent two and a half years in prison away from her child missing critical life events.  She lost her home during this time, you know there wasn't a bankruptcy here, she has this on her record forever. I got the better end of the deal, and you know what, I'm a much better  business person today, it may cost me half a million dollars in a couple of really unhappy years.

But I'm a much better business person today than I was.


00:52:02.430 --> 00:52:13.890

CherylO: I said I don't know that I would have done this is the worst class I'm in and I appreciate I'm not complaining...I appreciate the opportunity and I think was important for people to understand what victims are going through.


00:52:20.220 --> 00:52:32.310

CherylO: The most difficult thing to get through, is not the money, it is the fact that you know that a person that you trusted cared about,  treated fairly,  had Christmas dinner with what.


00:53:02.850 --> 00:53:14.220

CherylO: And now you can either let that make you cynical and untrusting or you can step back and take a really unemotional analytical look at your business and say I'm a grown-up and you don't I don't establish financial controls, because I think you will steal from me so that's kind of insulting I said it financial controls, because I know what someone in your position could do, and my job.


As the business owner is to see to it that I know where my money is so that the men come and work for me know that their paycheck will clear the Bank and the vendors, who.


00:58:52.770 --> 00:58:56.760

CherylO: The first thing is number one, nothing that you did give anybody the right to commit a crime against you, nothing, even if you were negligent and attentive or just naive nothing that you did gave anyone the right to do it, so their actions are their responsibility but there's a second component and this is the one that was really hard in it, and it was hard for me to really look at an admit.


The fact that the opportunity existed for her to embezzle for eight and a half years with that being detected is my fault is squarely on my plate, that is my fault, it was my negligence that allowed it to happen it didn't mean that she was justified it didn't mean she should have done it.


01:01:47.910 --> 01:01:51.300

CherylO: For somebody to commit this kind of offense you feel like a moron.

And I was telling you a good friend of mine is to feel so stupid and she immediately said sure Oh, you are not stupid, you are honest and because you would never do this to someone else you were not looking for someone to do this to you so you're not stupid you're honest.

That, if you are not prepared to set up financial controls, because it might hurt people's feelings enough think you were saying that I'll tell you that you probably shouldn't be in business.

Because the employees, your employees your vendors your customers everybody who depends on you financially has the right to believe that you really are managing your finances well enough to meet your obligations, so if you.


Well, what did you think?  Cheryl’s story is so regular but so insightful.  Regular because pink collar crime happens in every industry and geography by most often a trusted employee.  Insightful because she had the idea to help others in a way that has not been done before.  Her book is great.  Look forward to collaborations with Cheryl.  We are on a mission to protect businesses from theft and if it does happen on how to move forward.  Please leave a rating.  It really helps spread the word on the podcast.  The more people know about how often it happens the more we can help.  See you next week. Next week’s episode will be a bit different due to travel schedules. Still working on it.  Thank you again.