Corporate Fraud Handbook: Prevention and Detection, 4th Edition

CHAPTER 11

Conflicts of Interest

Case Study: Working Double Duty

After grabbing a quick bite to eat at the mall, Troy Biederman1 spent the rest of his lunch hour shopping for clothes. He liked to present a professional appearance as a sales manager at ElectroCity, an electronics and appliance chain. While waiting on a charge approval at a small menswear store, Biederman spotted its promotion for a free La-Z-Boy recliner and tossed his business card into the drawing fishbowl on the counter. Suddenly his eye caught a familiar name on top of the pile—Rita Mae King, the full-time purchasing agent at ElectroCity. The card, however, read: Rita Mae King, account executive at Spicewood Travel.

  “He put two and two together and it smelled fishy,” explained Bill Reed, the vice president (VP) of loss prevention at ElectroCity. Biederman knew Spicewood Travel was the agency his company used to book incentive trips for its sales force, of which he was a member. He also knew King enjoyed close ties with Spicewood—now he wondered how close. Biederman snatched King’s card from the pile and discreetly turned it in to his boss that afternoon.

  Within two weeks, the business card had made its way up to the executive VP of ElectroCity, a company that rings up annual sales of $450 million. Not wanting to jump to any conclusions, yet also suspecting that his purchasing agent might be in cahoots ...