NJ Banker charged with fraud
A former employee of Pamrapo Savings Bank was arrested by IRS agents on June 2 and charged with diverting and embezzling more than $600,000 from the New Jersey-based bank. According the the details published in the public domain to date, the scheme was quite simple. In a complex banking environment, he asked business partners to pay commissions and fees to him personally instead of to an associated entity. He misinformed his colleagues about this (obviously) and was able to uphold this interesting way of doing business for around 4 years. How about fraud prevention or internal controls? Anyway, it seems that the banker started his fraudulent scheme when he was confronted with a pay cut in 2006.
From a ‘fraud triangle’ point of view, we have 2 out of 3 covered already; rationalization (the pay cut) and opportunity (inadequate internal controls). Who knows what caused the (financial or psychological) pressure to finalize the triangle?
