A bank auditor met with the senior operations manager to discuss a customer$$s com$-$ plaint that an auto loan payment was not credited on time. The customer said the pay$-$ ment was made on May $5,$ its due date, at a teller$$s window using a check drawn on an account in the bank. On May $10,$ when the customer called for a loan pay$-$off balance so he could sell the car, he learned that the payment had not been credited to the loan. On May $12,$ the customer went to the bank to inquire about the payment and meet with the manager. The manager said the payment had been made on May $11.$ The customer was satisfied because no late charge would have been assessed until May $15.$ The man$-$ ager asked whether the auditor was comfortable with this situation.

The auditor located the customer$$s paid check and found that it had cleared on May $5.$ The auditor traced the item back through the computer records and found that the teller had processed the check as being cashed. The auditor traced the payment through the entry records of May $11$ and found that the payment had been made with cash instead of a check.

REQUIRED

What type of embezzlement scheme is this, and how does it work?