3 Key Ways to Prevent Embezzlement
By Kerry Serritella, CPA, Partner and Rob Raiola, Director
The spotlight on athletes and entertainers shines on their performance, their relationships and their wealth. What hides in the shadows, though, is their unique vulnerability for financial misappropriation as they trust heavily on others to manage their careers, finances and daily operations.
From prominent cases of stolen millions to the quiet, slow siphoning of wealth, embezzlement by business managers is an all-too-common occurrence. These “trusted professionals” take advantage of unchecked accessibility and the famed distraction of their victims.
Guidance for Athletes and Entertainers
Here are three key strategies to help protect yourself:
1. Segregate Duties and Demand Transparency
As with any business, separating fiscal responsibilities provides for cross-checks and reduced opportunity for theft. Put approval processes in place for things like credit card payments or larger transactions. Require monthly or quarterly itemized reports and commit to reviewing them on a regular basis. Even if you’re not sure what you’re looking for, a basic idea of what charges are legitimate will highlight those that demand further clarity.
Have an independent Certified Public Accountant (CPA) review your finances regularly. The key word here is independent – not related to your business manager. Annual audits by a trusted firm can uncover irregularities in real time, before they snowball into epic proportions.
3. Stay InvolvedUnderstanding the basics of your finances is key to recognizing when something seems amiss. Know your spending habits, where your money is and how it’s being invested. Ask questions, especially as you are learning your way around large amounts of money. Questions indicate you’re paying attention, which just might deter someone from trying to take advantage.
Don’t Let Trust Become a Liability
In an industry built on trust, it’s more important than ever to have measures in place to protect your wealth while you are earning it. It’s the only way to ensure a sustaining legacy you’ve worked so hard to build.
Embezzlement is a “financial crime where someone in a position of trust fraudulently misappropriates assets entrusted to them for personal gain, often involving the theft of money or property.”
Contact Us
If you have been using the same business manager for more than five years, it’s probably time for an independent look at things by a trusted external CPA firm. Please call one of our specialized team members below today for peace of mind:
Kerry Serritella, CPA
Partner
kserritella@pkfod.com | 845.670.7129
Rob Raiola
Director
rraiola@pkfod.com | 646.699.2864