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Asset Misappropriation Fraud Case Study

821 Words4 Pages

I. Background The Sandhogs Union was responsible for representing 1,000 Local 147 workers employed in New York City who worked in construction-related capacities. The organization established plans to provide Local 147 employees with such benefits as retirement benefits, workers’ compensation, and unemployment benefits, for example. The Sandhogs Union also created Local 147 specific benefits including the Local 147 Construction Workers Retirement Fund as well as the Local 147 Construction Workers Annuity Fund. From 2002 to 2008, Melissa King acted as the Local 147 Fund’s employee benefits fund administrator and tasked with providing administrative assistance to the Local 147 Fund through her company, King Care LLC. The Sandhog Union …show more content…

Transferring the funds led to King committing embezzlement against the Sandhogs Union as she was trusted by union members to properly appropriate their funds. Embezzlements are classified as Asset Misappropriation fraud, which is considered the most committed fraud type when compared to Corruption and Financial Statement Fraud. “Asset Misappropriation fraud involves third parties or employees in an organization who abuse their position to steal from it through fraudulent activity” (Asset Misappropriation Fraud n.d.). By utilizing her position to embezzle union member funds, King committed Asset Misappropriation as the money belonged to the hardworking Local 147 union members (Asset Misappropriation Fraud n.d.) (Scribner, et al. 2010) (Fraud Tree 2017) (Murray …show more content…

There are four factors to being considered an embezzler: (1) a fudiciary relationship exists between the parties, (2) the defendant acquires the asset from the fudiciary relationship, (3) the defendant either takes or transfers ownership of the asset, and (4) the defendant’s actions are intentional. After being in the business since the 1980’s, the locals placed their trust in Melissa King and King Care, LLC. The trust between the workers and Melissa King established a fiduciary relationship. Once the worker enrolled in a benefit plan and gave her the money, she acquired his property. A union member enrolled in a $35,000 retirement plan and gave King the money. Instead of putting the money in his new account, King transferred the money to her King Care account. By transferring the money to her account, she became the property’s new owner and spent it on a new mink coat. In this case, buying a new mink coat was intentional because she wanted one (Ganga 2010) (Murray

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