Canadian Accountant Caught Buying Nearly $7 Million Worth of iPhones and iPads With Company Credit Card

[MacRumors]

The National Post has shared the story of a Canadian accountant who was caught after buying nearly $7 million worth of iPhones and iPads with her company credit card and reselling them to the owner of a small electronics store.

Nadia Minetto, who was as an accounting manager at Mississauga-based software company Wescom Solutions, started buying thousands of Apple products with her company-issued American Express card in 2011. It had been her job to approve business expenses for all employees, so her spending went unnoticed.

Over the next two and a half years, the Ontario Superior Court found that Minetto sold 5,321 iPads and 4,942 iPhones to businessman Gabriel Fung, who in turn sold them at his store Plus One Solutions in the Toronto area and to wholesalers in Hong Kong, turning a profit of just over $1 million.

Fung first met Minetto after responding to her ad for an iPad on Kijiji, a popular Craigslist-like classifieds site in Canada. Their transactions eventually became more elaborate, often involving 10 to 20 devices at a time, ultimately leading to bulk shipments to the address of a virtual business set up by Fung.

The scheme came to an end in July 2014, when consultant Kristine Pacy discovered spending irregularities as Wescom was contemplating becoming a publicly traded company. The court determined that at least $6,831,834 of Wescom's money was misappropriated dating back to May 2009.

Minetto admitted to her actions and, in October 2014, she consented to a judgment in the amount of $6,831,834.17 plus interest. Wescom also won a judgment for more than $5 million against Fung, but he was awarded his cross claim for the same amount against Minetto, potentially reducing his amount owed.

This week, an Ontario appeals court dismissed Fung's appeal over his judgment, potentially bringing the case to an end.

Article Link: Canadian Accountant Caught Buying Nearly $7 Million Worth of iPhones and iPads With Company Credit Card

 

[AkuskaUK]

Ohhhh, Naughty!



(Gimme a cheap new Mini)

 

[44267547]

If this company was properly/thoroughly audited (Especially with a credit card), Nadia would’ve have been caught much earlier on to stop her antics. A lot of companies are audited once, if not twice a year with any external expenses with company credit cards.

 

[avanpelt]

That card must've had one hell of a high credit limit. Even though the devices were purchased over a period of two and a half years, 7M worth of purchases is staggering.

 

[subjonas]

At $7M (and probably climbing), how did she think this was going to stay unnoticed?

 

[JetTester]

Criminals always think they can't possibly be caught. And they are usually wrong. In this case, there was just too much evidence for it not to be discovered. A proper audit system would have caught it much quicker, though.

 

[LogicalApex]

That card must've had one hell of a high credit limit. Even though the devices were purchased over a period of two and a half years, 7M worth of purchases is staggering.

Amex charge cards don't have credit limits.

 

[thisisnotmyname]

It's amazing the lax policies and controls in place in so many organizations. People like to think this couldn't happen in their own organization but in many cases they'd be wrong.

 

[keysofanxiety]

At $7M (and probably climbing), how did she think this was going to stay unnoticed?

People don't see the bigger picture when they're doing stuff like this. It begins with one or two purchases a month. Then a few a week. Then you really think you can get away with it and becomes the norm. "Oh, time to boost this month's paycheck."

You get overconfident. Purchase in bulk, lose perspective, and get sloppy.

Before you know it, you've racked up 7 million dollars.

 

[radio893fm]

I spent 40 in gas last week and there was turmoil in my company... I need to talk to Nadia.

 

[jicon]

I was reading this story this morning. She had some sort of deal with the company who would forgive her repaying back the money... Selling back Mercedes and Audi cars, but, as it shows, 10K gift to a family friend here, Raptors season tickets, and vacation for her and friends to Vegas. Out of control.

 

[rdowty]

Now that is a true fanboy.

 

[zorinlynx]

I don't understand how people can think they can do this sort of thing and not eventually get caught.

Someone always eventually looks at the books and will find there's money missing. It's the entire basis of accounting.

 

[44267547]

I don't understand how people can think they can do this sort of thing and not eventually get caught.

Addiction, thrill, the thought of being invincible, ect. And the biggest thing, is being overconfident that this female employee thought she had the upper hand being an account manager. Still completely baffles me that they did not have an outside source conducting an audit at least once a year, which would’ve detected this much earlier on.

 

[flyinmac]

Well there goes 7 million dollars in future sales for Apple.

I’m sure the potential end-users will still likely buy phones. But if this scheme was based on reduced prices to move the phones, then those more umm... “budget minded” target buyers will probably be out of the market.

It sounds like it was a purchase at retail at someone else’s expense, then sell cheaper since she had no actual out of pocket expenses to make the initial purchase.

Otherwise, her profit would have matched or exceeded the 7 million dollars. If she only made 1 million, she was selling them considerably cheaper than the price her employer paid for them.

 

[CarlJ]

The court determined that at least $6,831,834 of Wescom's money was misappropriated dating back to May 2009.

Minetto admitted to her actions and, in October 2014, she consented to a judgment in the amount of $6,831,834.17 plus interest.

So... she embezzled 6.8 million dollars, she got caught, and the punishment for her crime is, she has to pay back the 6.8 million dollars? There are a lot of people doing hard time for lesser crimes who would love to get that sort of a deal.

 

[now i see it]

while a shoplifter stealing food to eat goes to jail

 

[Raid]

I'm kind of disappointed that this store isn't in Pacific Mall. I mean they have a reputation to adhere to.

 

[cube]

He could have bought 77 bottles of champagne at a Miami nightclub instead.

 

[avanpelt]

Amex charge cards don't have credit limits.

The article doesn't say explicitly that it was an Amex charge card. It says it was a 'company credit card' and then later refers to it as simply an 'Amex card'. Are Amex credit cards not available in Canada? Here in the U.S., we have both Amex charge cards and Amex credit cards -- the former having no limit and the latter having a limit.

 

[dlucks]

So when Tim says iPads and iPhones have been selling like hotcakes....

 

[r.d]

Lack of effective internal controls.

 

[theonekcrow]

If this company was properly/thoroughly audited (Especially with a credit card), Nadia would’ve have been caught much earlier on to stop her antics. A lot of companies are audited once, if not twice a year with any external expenses with company credit cards.

I agree with this statement though with a twist... If this company was private at the time of the fraud, they may not necessarily be a requirement by the government to be audited, so there is a failure point there.

This is more so an issue of a lack of internal controls, as she is the accounting manager that oversees everyone’s credit cards, she should not have been allowed to oversee her own. Her charges should have been reviewed by the CEO, CFO, Controller, or some supervisor above her.

 

[Mousse]

At $7M (and probably climbing), how did she think this was going to stay unnoticed?

When you're the ONLY bean counter at a company and the boss doesn't ask questions, it's easy to embezzle. Any bean counter worth hiring would have had 3 sets of books: one for the tax man, one for the boss and one with actual tally.

Accounting ethics, bruh. It's like a situation where client pays, in cash, a $1000 bill. And when I count it it comes out to $1100 in cash. You would think ethical question is, "Do I tell the client?" But you'd be wrong. The ethical question is, "Do I tell my boss."

 

[itsmilo]

I could probably do that too. They got rid of our sales department so everyone has to approve basically everything themselves and I get random invoices that i wasn’t even involved in cuz my boss doesn’t know how to use the software or it’s invoices that were not even meant for me