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advocacy community education
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what occurred, and in many instances,
the full extent of the theft can never be
determined.
Can measures be taken to reduce
the risk of fiduciary theft and embez-
zlement, as well as increase the rate
of detection early in a scheme?
Definitely.
And that brings us back to Monopoly.
If there are clear and defined written
instructions whenever a fiduciary rela-
tionship is established, they could lay
the foundation for preventing this kind
of abuse. These instructions would
include a clear definition of the fiduci-
ary relationship. They would clearly
identify that a fiduciary relationship has
been established, define exactly what
that means, identify the person to
whom the individual owes the fiduciary
duty, and outline how the fiduciary
would perform his or her duties on
behalf of the benefiting individual.
And, like Monopoly, there should be an
explicit warning that the fiduciary must
keep personal funds separate from the
individual's
funds
and
property.
Included should be a reporting mecha-
nism to account for the fiduciary's
actions and activity, as well as the
venue and frequency to which the fidu-
ciary needs to report. The documenta-
tion should also clearly identify the con-
sequences to the fiduciary in the event
the fiduciary does not act in the best
interest of the individual or, worse,
inappropriately embezzles funds for
personal purposes.
In Monopoly, an unscrupulous banker
can spell the end of an evening or a
friendship. In life, an unscrupulous
fiduciary threatens the health, safety,
and security of another person. Both
situations are sad. The second is dan-
gerous. Neither should be tolerated.
Stephen Pedneault is
the principal and
founder of Forensic
Accounting Services,
LLC, a firm specializing
in fraud investigations,
forensic accounting,
employee embezzlement, fraud pre-
vention, litigation support services,
internal control evaluations, due dili-
gence analysis, and various other spe-
cial projects. A forensic accountant,
Pedneault is also a certified fraud
examiner, certified in financial foren-
sics, and a forensic certified account-
ant. He has authored or co-authored
three books on fraud and is currently
working on a fourth. Email him at
steve@forensicaccountingservices.com.
Embezzlement Lessons from Monopoly
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