Employee Sentenced to 90 Months in Prison in Galling Insider Fraud

A recent conviction of a malicious employee shows, yet again, how SMBs can be targeted and victimized by their own employees.

In April, an employee in a Missouri-based company, Tera Enterprises, was sentenced to 90 months in prison for embezzling $3.82 million from her employer. The employee, Bridget Thebeau, pleaded guilty to five counts of wire fraud.

The employer was a small, family-owned business. Thebeau had been hired out of college, and promoted from within the business to a senior role, paying her 6 figures and allowing her to work from home. As the business owner began shifting toward retirement, Thebeau began colluding with the company's Chinese suppliers. Over the course of 9 years, she orchestrated a procurement fraud scheme, replete with inflated purchase orders (over 150) and fictitious orders (over 80), causing her employer to pay $3.82M for products that the company neither received nor needed. The Chinese suppliers kicked back more than half of this money back to Thebeau over the 9-year period.

To hide her scheme, she created fictitious shipping labels, and provided fictitious invoices to her owner and their outside accountants to make it appear that customers were purchasing the fake products. Then, when her fraud was discovered, she deleted records from the company's servers and cloud, deleted evidence from her phone, and submerged her laptop in a sink full of water. At her sentencing, the judge called it one of the worst embezzlement schemes he had seen in his time on the bench.

Ultimately, the owner was forced to come out of retirement, and sell off assets to help the company avoid bankruptcy. He sold the company's office building of 20 years, and had to cause the company to take on debt. The company's customer, banking and other relationships were severely damaged. The case serves as a stark reminder about the need for separation of duties and other controls, even within smaller, family-owned companies. Thebeau has been ordered to repay the $3.82M, but defendants in these cases rarely satisfy restitution orders in full, leaving the defrauded employer holding the bag.

Keith Bova