Monday, November 19, 2007

A Hidden Casino Cost I Hadn't Considered

The case of a Louisville woman caught embezzling $7 million from an Indiana credit union to spend in Indiana casinos -- math majors will note the money is gone -- is interesting mainly because of the size of the theft.

But what caught my eye in the press release was this:

As Head Teller she was responsible for ordering and accounting for all cash replenishments for the credit union. She was also responsible for reconciling and overseeing vault activity. She also was responsible for the general ledger and reconciling the vault cash account to the physical count of cash on hand.

Part of her job was to prevent herself from embezzling funds which she, of course, failed to do. The credit union needs another employee or two.

So not only are the customers of the credit union out millions, but they will be hit again as the credit union has to hire more people for oversight to prevent this kind of fraud in the future.

There are a lot of businesses that handle large amounts of cash. If each of them has to go out and hire another layer of bookkeeping support to prevent this kind of embezzlement, we are looking at significant added costs to be passed along to customers.

And while Patricia Sherman is a guest of federal taxpayers for the next few years, whatever benefit Indiana taxpayers get from casinos may get sliced if Kentucky or Ohio start to play the same game.