The Providence news. (Providence [R.I.]) 1891-1906, 1895-10-22
HOW THEY DO IT..
Skill Of Certain Cashiers
Who Wish to Steal.
Expert Accountant Explains Methods
Of Theft and Detection.
Sometimes Ingenious, Oftener Clumsy
Euuk.xzlfuO aa a Eiua Art.
Sometimes Ingenious, Oftener Clumsy
Embezzling as . Fine Art.
copyrighted by J. p. Brawner.)

The frequency Of defaulting cashiers In these
parts renders il worth while 10 learn from
professional accountant in business in New
York, Boston, Philadelphia, Chicago and other
leading cities, how the offenders manage to
conceal their steaiings for a long time. This
Information in the form OF recorded cases ID
provided below.
man dealt very largely in patent meoi'
cincs, and his daily receipts amounted to sSCO
OF $500. In addition TO this business he had
private estate which yielded considerable rev.
enue. The principal finding his business
growing too much for him to conduct person
ally, appointed one OF his trusted men as man
ager, with power OF attorney to indorse all
checks aud deposit them in bank to the prin'
cipal's credit, keeping, of oo1rse. separate
bank accounts for the medicine business and
the rivste estate.
The lax manner in which every thing was
conducted, and the want OF supervision OF the
accounts, prompted the manager to appropri'
ate small sum which he needed for press
ing purpose. This sum was augmented from
time to time by further peculations He be-
came SO bold that check for S46s was one day
received on account of the estate and he ap'
propriated il to his own use.
OF the estate accounts the principal kept
close operation, being particularly interested
in the bank balance to the credit OF the es-
tate. An inspection Of this account was made
monthly and in order to swell the balance OF
the account tampered with. the manager
would pay in. day or two before such inspeo
ton, q sum OF money representing nearly the
amount stolen, whi ch was received from the
medicine customers, thus Transferring the
shortage from the estate account to the medi-
cine account
The practice was continued for two years,
aud each month the deficiency became great
er and greater. until at last
ASSUMED SUCH DIMENSIONS
that the manager. who was cashier as well,
had to take the booieeper into his confidence.
and cajoled him into supplying the principal
with falsified balance sheets. The assets Of
the concern were false, the stock being placed
at some 5000 more than it really was, and the
unpaid accounts were manipulated at the
close Of each half year. SO tina. false charges
were made against the larger customers ao'
counts for goods purporting TO have been only
recently supplied, the payment for which, 1t
was stated. had not become Que
The bank balances always remained heal
thy, and that satisfied the principal without
going closely into details. Had he done so he
would have discovered that names Of custom
ers who had no existence appeared on the
ledgers, and those accounts were carefully
kept active by means of constantly debiting
them with goods never delivered, and credit
ing them with cash never received. But those
mystic accounts never appeared on the list
of customers accounts
Further, the principal would have discov'
cred that the shipping clerks record was far
more each month than the amount OF goods
charged up against the customers-that large
parcels Of goods had been sent to n good-pay-
ing customer. but not charged; and when that
customer remitted his check 1t was. OF
course, misappropriated.
When the manager suspected that the prin-
cipal wished to see the bank balance TO the
credit OF the medicine account" the mana
ger, knowing well that the principal knew ap-
proximateiy how each account stood. and IL IL
happened to be about $1,000 below the average,
collections on account of the estate would in.
stantly be made. and placed to the credit oi
the medicine account
Thus. by playing one account against the
other, the principal was deceived: but /,
could easily have been prevented, had the
two different accounts been
PERIODICALLY EXAMINED
up 10 any given point at the same time.
The crash came The accomplice bookkeep
| er died, and the new one sent out bills for al
overdue accounts upon the books. The man
| ager absconded. and the stock to be replen
| ished or placed at its proper standard would
| have created an overdraft the bank ac
| count A new balance sheet, prepared by
| the inevitable expert called in too late, showed
a deficiency of sB2,0
In another case, that OF a manufacturinI
| concern in Pittsbure, the cashier wanted
| money Numerous checks, drafts, bills anS
| cash in q variety of forms were daily pass
| ing through his hands. and he pondere'
| which of them he could take with the leas
| chance OF discovery.
He took the check received from a custom
| er of standing. whose account had just be
come due, and who was above suspicion. 81
far as credit went. SO that the payment bein
| shown 10 be a little overdue notice wa
taken Of it. He entered all the receipts il
his cash book that day with the exception o
the one distracted.
His cash. Of course. was short that amour
| until the end of the month came, when |
must be put right at all hazards that IL nigh
not appear on the list of monthly balances
This is the plan adopted. Again large mum
ber Of checks and much cash was received.
The cashier entered TO She debit of his cas-
the name and amount abstracted last month
His success led him the following month I
abstract the payments Of four customers 1
the same way, until he had tampered wit
eight accounts
II will be- noticed that the method adopte
did not involve any cash deficiency which a
auditor would discover in the counting Of N
cash on hand, neither did IL nocessitate an
Justification by false entries OF altering ba
snces in the ledger, 40 that the stealing wer
on successfully for a long time, although a
independent bookkeeper
| WAS KEEPING TRACK