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Simple Stupid

 Most people have loads of passwords, and are paranoid about cybercrime, malware, phony eastern European credit card charges and other schemes. These are certainly concerns, but let’s get a bit more low-tech.  Recently, I was contacted about serving as an expert in a matter regarding embezzlement from bank accounts. A lawyer’s long-time assistant had taken money over a long period from his attorney escrow account.  The lawyer never reviewed the bank statements and relied on the assistant to keep track of the account; of course you know the results.

I consulted in another matter where an unsophisticated person received a lot of money as a settlement for injuries sustained.  That person’s attorney put the money into a bank account for him.  A careless banker and that banker’s unscrupulous friend helped relieve him of most of it.   The point, simple stupid, is that with very few exceptions, you need to be involved, whether you detest it or not, in reviewing your financial matters, and financial matters for which you have responsibility.

In our smart phone world, why would anyone want to have paper bank or brokerage statements?  The reason is that you are more likely to look at paper that comes in the U.S. mail, as opposed to email. I serve as trustee for a bunch of accounts, and treasurer for several entities. Some people might not dwell too much on the responsibilities one carries as a trustee, but that is a mistake.  Years ago, I was a trustee of a day school that did not pay its federal withholding taxes. Subsequently, all of the trustees had a tax levy filed against them.  That focused my attention.

If you are a trustee of an organization that has a “full opinion” Certified Public Accountant audit, you can pretty much relax. The accountants will review the books, and you are probably safe.  But, most organizations can’t afford, and don’t need full opinion audits.  With anything less, you are on your own, and the accountant will get the person/organization to sign some forms to say so and absolve them of any responsibility.  If you are on an Advisory Board, don’t worry.   Advisory Boards have no official responsibility.

I suggest the following for your own finances:  Get your important bank or brokerage statements where there are cash, check or electronic transfers in hard copy.  Review the pages that have the copies of the checks on them, or other pages that show the payees to be sure that there is nothing with which you are not familiar. If it is a business account handled by others, test check the same thing from time to time. If you have responsibility as a Trustee, or other officer for someone else’s money, in addition to the above, confirm that each account is reconciled monthly.

If you don’t want to take the time to do these things, consider resigning because you have the responsibility for any wrongdoing.


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LEE TABAS is available as a consultant or an expert witness.  Areas of expertise include:  general business, management, problem asset resolution, marketing, acquisition or sale of businesses, relationship development, loan policies, high performance banking, and business funding.  Please call 610-896-2400 or email for further information.


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