Don’t make fraud e-e-easy

The story of Clive Peeters and the payroll manager who allegedly stole millions over almost two years to build herself a massive real estate portfolio just beggars belief.

In fact, you wouldn’t even make a movie about it because the script would sound so implausible. For a start, according to reports, Sonya Causer, 38, from Lilydale, was on $125,000 as a payroll manager for the whitegoods and electrical retailer.

That’s a lot for a payroll manager, isn’t it? But actually it was not enough, because allegedly Causer took $20 million of company funds, buying more than 40 properties in the past 18 months!

This is one hard working woman. Imagine the time it took to research the properties, buy then, settle on them, lease them out and manage the rental business. That’s a full time business!

On top of that she also had to manage the theft and cover up. And she also allegedly bought a couple of cars, including a luxury $105,000 Audi four-wheel-drive, a Holden station wagon and a Toyota LandCruiser to boot.

What is so extraordinary is that apparently no one noticed. The alarm, according to The Age, was raised on the missing money on July 29 when another Clive Peeters accountant, noticed a $2 million variation between two company ledgers. Auditors, once they started digging around, found a much larger hole.

So what? No one noticed that Ms Causer was an extremely busy woman running a property portfolio? No once noticed the cars? No one noticed that she was buying a lot of property for a woman who had a job as a payroll manager? And no one at Clive Peeters raised the alarm before now??

It beggars belief… in retrospect. But over the years I have talked to so many entrepreneurs who have found themselves in a similar – albeit, not so dramatic – situation. And the reason? Trust. We only see what we want to.

To remain vigilant about people you learn to trust is difficult and uncomfortable. It is human nature to downplay or even dismiss signs that we don’t want to see. And there would have been plenty of signs in the Clive Peeters scandal that many people ignored, downplayed or discounted.

It appears that Causer was seen as trustworthy and initially assisted the company’s auditors, Deloitte, in the investigation of her own fraud.

In fact it was only when she was allegedly caught red handed – after she apparently attempted to cover her money trail by changing figures on internal accounting systems, that she was outed.

It is a good reason for all entrepreneurs to role-play the “distrust” scenario in their heads. What if your accountant committed fraud? How would you know? What if your bookkeeper fiddled with the figures? Or the person who does the invoicing? What checks and balances are in place?

And it is also yet another reason to trust your gut. If you have a niggling instinct that something is wrong, look into it immediately, no matter how small or big. And if you don’t have the instinct you are either not close enough to the business, or your procedures and systems are not giving you the information you need to run the business properly.