AXIS INSURANCE SERVICES, LLC: Crime Claims Scenarios
According to the FBI, employee theft is one of the fastest-growing crimes in the country, and the Association of Certified Fraud Examiners has estimated that the average business bleeds 6% of total revenue from employee-related losses. Following are examples of crime claims.
Over a period of 15 years, a successful property manager built a following of several Home Owners Associations (HOAs). He was in charge of all of the financial operations of the HOAs under his management including the collection of dues and payment of expenses. However, he had a severe gambling habit. When his own savings ran low, he began to “borrow” funds from the various HOAs he was managing. His “borrowing” evolved into a Ponzi scheme. At the end of his run the HOAs were out over $1 million. This is a classic example of what happens when there is no separation of duties.
Stolen Corporate Funds
A company executive delegated her secretary to set up travel arrangements and gave the secretary a corporate credit card and account information for payment. The secretary used the given information to make her own personal purchases. The executive sued against the secretary for $800,000.
A small escrow company handled transactions primarily for residential sales. There was a breach in their security and $500,000 was wired out in 26 individual wire transfers. When the company was finally aware of what was happening, they contacted their bank and put a freeze on the account. The bank tried to recover the funds by contacting the financial institution where the wire transfers had gone directly. The escrow company was held liable for lost funds of their clients. The suit settled for $1.5 million.
These are only claims examples: Minor changes from actual suits have been made to protect the confidentiality of all clients.