She said members would come in to make a payment using their credit cards. If the woman was at her desk, the woman handled the payments and processed the charge on the member's card while they waited. However, if the woman was not in or available, the office manager would handle the transaction. The office manager would obtain the card information and may or may not process the charge right away while the member waited. Sometimes the office manager processed the charge, and other times he simply collected the information to process at a later time. He would mark the member's invoice or slip as paid, and tell them their slip would act as a receipt. 

The payment wasn't processed, the member didn't sign a charge slip, and no receipt was written out from the book. She said many nights, the end-of-the-day close-out of the credit card terminal was never processed, and at times it could go for a week or more before the terminal was closed. She suggested that I look further into the daily close-out and reconciliation of credit card payments by members. As she described the delay in processing the charges by the office manager, it dawned on me that the office manager could have had different schemes occurring through the credit card payments. One scheme was that the office manager simply didn't charge members' cards. I failed to see how the office manager would have personally benefited from not processing charges to members' cards, and not documenting their payments with receipts from the receipt book. I thought maybe the office manager was simply lazy, or perhaps didn't know how to process charges and didn't want anyone else to know it.

 These possibilities made no sense to me. I then thought it could have involved the office manager offering members who came in to pay by credit card a discount if they paid him directly in cash. He could have diverted their payments and made it look like he was taking a credit card payment, knowing that he would never process a charge as the member had already paid by cash (directly to him). I thought of a third possible scheme where the office manager could have been accumulating unprocessed charges, and on days when he diverted funds through some other means, he could have used the unprocessed charges to fill the void left from his theft. For now, it didn't matter. The information she was providing only showed me that the office manager had lied to me in the interview regarding how the credit card processing worked. I asked her what else was happening at the division. 

She said that when I had Tracking Down Leads ( The Plot Thickens) 121 received and reviewed the United Alliance account activity for the past few years, it would all be there for me to find. I asked her if she thought anyone else was involved with the United Alliance account or any other fraudulent activity at the division. She said she didn't know, but that the three people we had been discussing were definitely involved. 

She suggested that I speak with each employee of the division. I told her I planned to talk to the remaining individuals including her before I finished the financial review. Since she came to see me, I had one last question I needed to ask. I knew she might not answer me, but I had to know if there wasn't some hidden agenda or personal vendetta being pursued by the informant by providing information about the controller and assisting with the investigation.

 

Describe the scheme presented by "the mole". How was this able to happen? What controls would have been able to prevent the scheme?