A-Rod facing up to 30 years for racketeering

You might remember him from his days of smashing home runs with the New York Yankees. Or perhaps more recently, you may recall his viral TikToks’s dancing with fiancé J. Lo (Jennifer Lopez) and their family.

Regardless, Alex Rodriguez is back in the news again. And this time, the news isn’t so glamorous. He is facing affair rumors with Southern Charm star Madison LeCroy and, of all things, embezzlement charges filed by his ex-wife’s brother. 

Constantine Scurtis’s, A-Rod’s former brother-in-law, filed a Civil Suit against Rodriguez in 2014 that was recently upheld by a Miami judge, with a looming  August 2, 2021 court date.

“Rodriguez and his co-conspirators caused Scurtis many millions of dollars in damages,” according to Scurtis’ legal team. In the lengthy filing, Rodriguez is accused of embezzlement, racketeering, and civil theft, just several of the 59 counts.

If upheld and he is found guilty, Charges could lead to up to 30 years of prison. All of which leads to this one essential question: 

How does someone actually get away with embezzlement? 

In the event, A-Rod is not found guilty (he has his own counter-suit in addition to denying the allegations), one could logically ask themselves, is it possible to actually get away with embezzlement and money laundering? 

Let us explore. 

The lawsuit

Most of A-Rod’s illustrious career will forever be tainted due to his admitted use of performance-enhancing drugs. But that isn’t the only controversy that was brewing from 2002-2008. 

Scurtis, the former brother-in-law to A-Rod when he was married to Cynthia Scurtis from 2002-2008, has alleged Rodriguez owes millions from a previous real estate venture the two worked on together. 

The suit goes as far as claiming that A-Rod profited from the damage that Hurricane Ike created in 2008. If guilty, these charges would be a classic case of embezzlement and fraud. Put another way, for almost 20 years, Alex Rodriguez has gotten away with money fraud. 

And while these charges will work their way through the court system, regardless of the claims against A-Rod, embezzlement is more common than you might think! 

According to a CNBC article from 2017, workplace fraud or “White Collar Crime” leads to $50 billion in company losses each year.

Whether it’s reselling equipment or skimming funds (the most common form of embezzlement), companies lose more than just money when these crimes occur. If you’re like me, you might wonder:

How does one get away with embezzlement, anyway?

The Hiscox group has conducted multiple embezzlement studies and found that small and mid-sized companies (fewer than 500 employees) continue to be disproportionally victimized by employee theft, representing nearly 7 in 10 cases. 

Funds theft (simply taking money) followed by check fraud are the most common forms of embezzlement, and the stats are even more staggering based on how long the embezzlement occurs. 

The longer the fraud occurs, the more money that is lost, and this doesn’t even include court cases. In fact, in the 2018 Hiscox Embezzlement Study, the Hiscox group found that the vast majority of embezzlement cases had multiple perpetrators. Companies that were victims of embezzlement lost far more than money: they lost customers, had more difficulty attracting new customers, and lost business partners. 

This Hiscox group study indicated that the average age of those who commit fraud is 48 years old, represented slightly more by women than men who commit this type of crime (51% vs. 49%). Nearly half work in accounting or finance (think access to money). 

You can read more about some of the bigger embezzlement cases here, such as the Robert Vesco case in which he is accused of embezzling $224 million. 

However, what should be noted is that aside from the bizarre Vesco cases, most embezzlement occurs to those companies that are under 500 employees. With less oversight than, say, a large Fortune 500, smaller companies can take steps from embezzlement! 

Steps to protect yourself & company from embezzlement 

Most who embezzle money rationalize the act in their mind and start small. 

They are typically trusted individuals who “Only Need” a little money for an emergency; a funeral, a court case, a divorce, or a family illness. However, after getting away with skimming cash or stealing checks, the embezzlement continues and grows, costing companies millions. 

In fact, there is a very logical sequence embezzlers go through that starts with: 

  1. Familiarity with the financing systems and company workings
  2. Motivation, such as a financial crisis
  3. Encouragement (they can’t believe how easy it is) 

On a positive front, after doing it, most are caught by year three! But that doesn’t mean you can’t take steps to protect yourself ahead of time! Courtesy of the Clarion Ledger steps a company can take to prevent embezzlement include: 

  1. Recognize it can happen in your business.
  2. Process all receipts and disbursements through a checking account.
  3. Create separation of duties (implement checks and balances)
  4. Review all statements, bills, and invoices.
  5. Audit the books internally and with external surprise audits.
  6. Set up dual control procedures.
  7. Reduce the amount of cash on hand and who has access
  8. Don’t throw away protocol because of friendships or the trust of any individual.
  9. Ensure the second review of purchases from vendors and suppliers.

A few to note from the list above include numbers 1, 3, 8, and 9. While all of the above is best practice, first recognize it can happen to you if you own a company. 

When I was growing up, my aunt had a neighbor who was a secretary for a small business who ended up getting a new SUV and a six-figure remodeled kitchen all in a few months. 

Several years later, it came out in a divorce that she had stolen $100,000’s of thousands from her employer. So it happens more than you think, and people do get away with it (encouragement factor). 

After being aware, it is important to have a checks and balances approach to cross-check work. This is how most money fraud is discovered – by someone in another division.

Lastly, consider reviewing purchased items, as this is a simple way for those in charge of procurement to skim off the top to speak!