Anatomy Of A Fraud

Most fraud victims clam up. In this check-tampering case, the victim-a small-business owner-decided to speak out. The resulting cautionary tale offers a rare, detailed look into the mechanics and psychology of fraud. And its aftermath.

Rosen chose Jackson from a pool of candidates and paid Spherion an $8,850 placement fee. In early March, Jackson arrived at The Rosen Group's offices in the Mill Centre, a four-story 19th-century mill dominated by brick walls and grand windows. Jackson's assignment lasted three weeks, but he impressed Rosen. So she followed her instincts and hired him full-time.

"It was not his work so much as it was his persona, his attitude," Rosen says. "He was a really bright guy. Well-spoken. Well-cast. You'd have trusted him with your firstborn."

Jackson immediately seemed to prove Rosen's instincts right. He did his job. He befriended other employees. He missed only one week of work in late April, and one other day. Once, according to Rosen, Jackson said he had a family emergency and the other time he got food poisoning, an illness confirmed by a doctor's letter on hospital stationery. He was the kind of colleague who brought doughnuts in for everyone, recalls Kristi Halford, former public relations director for TRG. "He was so willing to help," says Halford. "He had a charm about him. He was like the perfect employee."A FraudIn july 2003, Wendy Rosen's outside accountant, Chuck Geser, was in the office reviewing some vexing bank statements. A large sum from checks that Geser couldn't find had cleared. "I'm drilling down on where this money went," recalls Geser, "when, literally right then, the phone rings."

In a coincidence of timing worthy of a bad movie, the phone call was from USAA Insurance, wondering why The Rosen Group had overpaid its account and submitted a $1,500 check for car insurance. USAA faxed over the check. Geser and Lisa Brice, TRG's controller at the time, immediately noticed that the check came from the 900 number series, well out of sequence. Brice had been paying bills with 300-series checks. Brice must have felt dread as she connected dots: Months before, Wendy Rosen says, Brice's door had been tampered with. Now, checks supposedly locked in Brice's office were showing up, used. The checks must have been stolen.

Geser immediately suspected Jackson, who had access to the books. Geser also said that as he was hunting down the discrepancy, Jackson was allegedly trying to "plug the cash"an accounting term for adding journal entries to the books so that they match the bank statements.

With some evidence in hand, Geser asked one of Jackson's friends in the office, Rebecca Cason, to join him and confront Jackson. They cornered him just outside the building. Sternly, Geser demanded answers to two questions: Why did you do this? And how much did you take?