Matters Of Trust
When an employee embezzles from you, it's no laughing matter.
Like many entrepreneurs, Mike Lacey struggled during the recent
recession. As founder of the Hermosa Beach, California, Comedy
& Magic Club, the 44-year-old Lacey rode the popularity wave of
stand-up comedy in the late 1970s and '80s, only to face
dwindling crowds once the economic tide turned against Southern
California. But he persevered--thanks in no small part to
performing regulars like Jay Leno and a dedicated team of employees
working behind the scenes.
"They were really here [for us] during the recession,"
raves Lacey of his 50 employees. "They pitched in for all the
right reasons."
But everything wasn't completely right at the club. "In
1995, we started seeing more bodies come through the door, but we
didn't see the money in the bank," says Lacey. "We
kept saying, 'We're getting a lot more people, but we
don't have the funds to show for it.' "
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What was wrong? One of Lacey's trusted employees--a woman
who'd been promoted to bookkeeper--was embezzling. "We all
did everything we could to keep costs down, and lo and behold, it
wasn't that our costs had gone up . . . it
was that somebody was embezzling $8,000 to $10,000 a
month--sometimes as much as $12,000 or $13,000," says
Lacey.
Not that the embezzlement was immediately apparent. "We
just started seeing things that didn't make sense," says
Lacey. "The explanations for why there wasn't any cash in
the bank kept getting stranger. We [knew] something was wrong, so
we brought in an accountant [to look at the books]."
Eventually, Lacey's bookkeeper confessed her
crime--although, says Lacey, she initially confessed to stealing
just $27,700--a sum much lower than the more than $175,000 she has
subsequently been convicted of stealing.
"This woman married her high school sweetheart, had three
children, went to church every Sunday--she didn't look the
part," says Lacey. "And everybody who called me after
this happened said the same thing: 'It's almost always the
person you'd say would never do it.' "