I peeked at my watch. It was six in the evening. Most of the employees would not return to work anyway, but there was no doubt in my mind that the news would make Victor and Yoel very happy.
"What about the rest of the systems?"
"I estimate within a day or two, everything can return to normal."
"That long? You said you’d cracked it -"
"I cracked the method, but not the extent of it."
"Ah… Well, explain to me what she did exactly?"
"Actually, nothing complicated, but, according to my experience, all the largest swindles are very simple in their basis. Sigal was actually paying the suppliers’ invoices twice: once to the supplier, and again to herself."
"And how come they weren't on to her?"
"This was exactly the breach Sigal took advantage of. She made a transaction to the supplier, and then created a duplicate order against the transaction order she’d made before."
"A Storno order?"
"Yes, a cancellation order."
"But the Storno order didn’t cancel the money transfer?"
"No. The Storno order only cancels the transaction in the company books, but it doesn't cancel the transfer itself. In reality, the supplier received the money, but in the books, the payment order was reopened. The repeat payment was transferred by Sigal to one of the fictitious accounts she’d opened for herself. At this stage, we’ve identified about five suspicious bank accounts."
"Interesting. Then, in fact, the supplier received the money twice, at least as far as the company was concerned – didn't he? So how didn't they notice it?"
"Very nice! Excellent point! Conducting a supplier's adjustment ought to be noticed. However, this company doesn’t have any additional controls. And Sigal herself was in charge of the suppliers’ adjustments! This is how she managed to conceal the whole thing."
"But how’s it possible to hide such embezzlement?"
"This is a question for the bookkeepers. Sigal knew very well where to take the money from. She was sufficiently smart not to repeat the trick with the same supplier too many times, and she transferred the money she withdrew to all kinds of budgetary pits that could swallow such sums. According to what I've seen so far, she never withdrew very large sums at one time, only up to 50,000 Shekels, no more. I know that for me and you, it's a lot of money, but for Panda, it’s pocket money."
"I still don't understand how nobody figured it out. After all, there are managers here, there are accountants…. Sorry, I still don’t see how she was getting away with it."
"Shirley Navon probably figured it out. That’s why we're here," Gilad reminded me and winked. No doubt he was very satisfied.
"Clearly. The question is why nobody else noticed that money was missing…"
"It can happen in such a big company. I’m not surprised the public accountants didn’t detect the deception. I can't tell you yet how much money she stole exactly, but it runs to millions."
"Millions?" I was shocked.
"Yes, millions. It didn't happen in one day, but over a long period. She didn’t steal one large sum, but rather many relatively small sums. There’s a term for this in the auditing field. It's called 'the threshold of substantiality.'"
"What does it mean?"
"In every company, there’s an audit team that sets up a certain threshold. Sums under that threshold aren’t checked because there’s no benefit or interest in checking them. I’d bet that the threshold of substantiality at Panda was at least a 100,000 Shekels. Sigal knew very well what the threshold of substantiality was, and took care never to exceed it."
"So - even if, by chance, someone were to suspect that something odd was going on - it wouldn’t have been checked because it concerned insubstantial sums."
"Exactly!" Gilad smiled. "We have here a quite sophisticated woman who was very familiar with the auditing policies and procedures, and knew how to fool the CPAs."
"As far as I remember from my previous investigation here, she wasn’t a CPA herself."
"That makes sense. Many public accountants aren’t really familiar with the work bookkeepers do, and don’t understand it."
"You’re not the first to tell me that," I said and made an effort to remember where I had heard this sentence before.
"Usually, bookkeepers are the ones saying it, but aren’t taken seriously. However, I’ve interrogated so many bookkeepers who managed to fool public accountants that I know this is the sad truth."
"I remember who told me that! Shai Hakim, who works here."
"What’s his position?"
"Bookkeeper." I smiled. Gilad responded with a big grin.
CHAPTER 23
Monday, July 4, 2011
Gilad and his team worked in the Panda offices until the small hours. In the morning, he called me and told me that it was time to bring the company directors together to review the extent of the embezzlement. I asked him if he still thought that nobody from the company had collaborated with Sigal, and he answered affirmatively. I told him to get some sleep and summoned Rafi Elad, Sigal's husband, for interrogation.
Rafi entered the station frightened and confused. I greeted him and led him to the interrogation room. He needed several long minutes and two glasses of water to calm down the tremors that had overtaken his body.
"Can we begin?" I asked.
"Y-yes," he said in a broken voice. "I apologize for being like this. I’m just very agitated and I don't understand what’s going on."
Either he was an excellent actor, or he had been living in a fantasy world, with the lights just turned on in the auditorium, I thought to myself.
"Is your name Rafael Elad?"
"Rafi’s fine."
"Okay. Rafi, as you know, your wife has been detained on suspicion of conspiracy to commit murder in aggravated circumstances."
"I’m still in shock -"
"Why?"
"I find it hard to believe."
"Really?" I asked in a skeptical tone.
"Yes, really!" He almost shouted. "I've been married to this woman for fifteen years, and we have four children! You don't think I’d be shocked? She’s been arrested for murder!"
"Do you believe your wife’s innocent?"
"I definitely want to believe it."
"Tell me a little about yourself. What do you do?"
"I’m a sales rep for the Strauss Group."
"So you travel around to supermarkets and grocery stores and market the merchandise."
"Something like that."
"How much do you make in a month?"
"Em…" He was stammering again. "I don't know exactly. Are you asking gross or net? I have all kinds of sales rep commissions -"
"What’s your average net income, more or less?"
"I think it’s 10,000 Shekels a month, more or less."
"Not bad," I smiled. "If there's an opening for a sales rep, let me know." He failed to smile at my weak joke. "Do you have any idea of Sigal's net income?"
"Actually, no. She takes care of our finances. She’s a bookkeeper, as you know."
"If I told you that her net monthly salary is 8000 Shekels, would that sound about right?"
"Yes."
"Do you have a mortgage on your apartment?"
"No, to the best of my knowledge."
"You have a Honda Accord 2010, and you’ve travelled abroad seven times over the last two years."
"We didn't always travel together. Mostly, she traveled with her girlfriends."
"Okay. What I’d like to ask you is this: where does the money come from?"
"Money for what?"
"For an apartment in a prestigious neighborhood, for a new car, for traveling abroad. Together, the two of you make 18,000 Shekels per month. It's very nice, but I don’t have to be a mathematical genius to realize that it's really not enough to manage a household like yours."
"I'm not really involved in these matters. Sigal deals with all the bills. However, a few years ago we received a very large sum o
f money, Sigal's inheritance from her uncle."
"What uncle? What's his name?"
"I didn't know him. Sigal didn't really know him, either."
"What was the amount of the inheritance?"
"Not small. Several million."
"Wow! Not a small amount from an uncle you didn't even know!"
"Yes. I was surprised, too, but I was simply happy we could afford the apartment in Ramat Hasharon."
"Do you remember when, more or less, that rich uncle had died and left you the money?"
"Five or six years ago."
"Do you have an idea how much money you received, and where it was deposited?"
"Not really. I told you, it was all Sigal's responsibility. I understood from her that we didn’t receive all the money at once. There were all kinds of assets that had to be sold, so we received the money in installments."
"I see. Did Sigal appear to be under pressure lately?"
"In what sense?"
"Was she concerned about work?"
"No more than usual."
"Was she relaxed in general?"
"No," he said, and lowered his eyes. "Sigal’s not a relaxed sort of person, for better or worse. That’s why I’m with her. They say opposites attract. She’s fire and I’m water."
"Can you explain?"
"She always says she’s raising five children," he chuckled bitterly. “She managed the household from the moment we got married. In fact, from the moment we met."
"Is she a strong woman?"
"Very."
"Rafi, I'm sorry to tell you that, in addition to conspiracy to commit murder, there's an additional suspicion associated with your wife."
"What?"
"The motive for the murder. According to an investigation being conducted right now at Panda, it looks like Sigal embezzled money from the company. I assume the story about the uncle never happened and he never even existed."
"It can't be! She showed me documents!"
"Do you have them?"
"They're probably at home somewhere."
"Did you ever have any idea that a considerable portion of your money actually originated from Panda?"
"No!" he said, and it was apparent that the question hurt him. "I told you, to the best of my knowledge, we had money from an inheritance."
"We’ll examine this avenue in more detail," I told him, even though it was clear to me that we would not find any mysterious rich uncle.
I left the room and requested that Sigal be brought over for interrogation. I instructed the cop to take Rafi out of the room precisely as Sigal was approaching along the hallway.
"Rafi!" Sigal shouted in a choked voice. "What are you doing here? Who’s with the kids?"
"My mother’s with them," he answered with agitation and asked the cop if he could go over and hug his wife. The cop naturally prohibited him from approaching her. Sigal burst into tears.
"But what are you doing here?" she asked tearfully.
She did not receive an answer. The policewoman escorting her broke off their conversation and pulled her along to the interrogation room. "Why can't I speak with him for a moment?" Sigal sobbed.
"There are visiting hours for that," answered the policewoman coldly, and brought Sigal into the interrogation room. I entered the room and the policewoman left. Sigal was crying bitterly. I took out a box of tissues from the locker in the corner and handed it to her. She pulled out a tissue and wiped her nose.
"Has something happened?" I asked.
"Nothing," she said, regaining her self-control in an amazing speed. "I’m sure you understand this isn’t easy for me."
"No doubt," I said and sat down opposite her. "Sigal, the reason I brought you here today is to inform you that we have evidence concerning the money you stole from the Panda Company."
She looked at me with a frozen expression. Even seasoned criminals had expressed more emotion than this when I hurled accusations at them. "I must admit, your silence up to this point has been rather impressive. If you want to keep quiet, or consult again with your lawyer, you can. However, the evidence against you is sufficiently strong for us to gain a conviction without an admission of guilt on your part. You have to understand that, at this point, there are two criminal cases against you. In one, you’re charged with conspiracy to commit murder, in the other you’re charged with theft. My problem in your case is that I find it hard to believe or comprehend how you did it all by yourself." I stopped for a moment and fixed my eyes on her piercingly. "I noticed you saw Rafi here a few minutes earlier. You probably want to know why he’s here. Let me explain. I brought him in for interrogation because I suspect that he’s your accomplice. I couldn’t understand how a family with a combined monthly salary below 20,000 Shekels could afford a standard of living appropriate to people who earn three or four times that - without both spouses being well aware of the source of the income."
Tears were pouring from Sigal's eyes once more. She did not say a thing, but I knew that she was deducing the simple conclusion by herself. If she continued to keep quiet and did not cooperate, she would get her husband mixed up in it and arrested as well, and their kids would be taken into care.
"Rafi claims he didn’t know anything," I decided to help her. "He has a preposterous story about a mysterious, rich uncle who bequeathed millions to you."
Sigal closed her eyes and then said, "It's not a story!"
"There actually was a rich uncle?" I asked and kept myself from laughing.
"No. But this is what Rafi thinks. I beg you, leave him alone. He doesn’t know anything."
"Doesn’t know about what?"
She closed her eyes again, swallowed and said quietly, "He doesn’t know what I was doing."
"And what did you do, Sigal?"
"Everything you say… I did it all," she said and resumed crying.
I waited a few minutes until her sobbing subsided.
"Can you tell me what happened, in your own words?" I asked gently.
Sigal Elad was the sixth child in a low-income family. Her parents were busy day and night providing for the family, and her older siblings were busy with their own affairs. Sigal raised herself and learned to stand her ground from an early age. She was a bright pupil, especially in math, but received low grades due to undiagnosed learning disabilities. Years later, she identified the same difficulties in her eldest daughter, but, fortunately, she could provide her with the right tools to achieve proper grades. When she grew up, she had to attend a vocational high school because her grades were too low for a regular high school. She decided to study clerical work and bookkeeping, and received a bookkeeper’s diploma. Due to her family's strained financial situation, she was exempt from military service. Upon completing her studies, she started working for a clothing importer in South Tel-Aviv. She picked up the skills very fast and realized that she liked the field. She wanted to study for a degree in Accountancy, but since she had not matriculated from a regular high school, the gates of the university were closed to her. In view of that, she supplemented her education with professional courses and advanced slowly to more significant positions.
When she was working for a public accounting firm, she had to deal with interns who did not understand numbers as well as she did, but had enjoyed better luck in life. She knew that, if she only had the opportunity to study at university, she could have been an outstanding student. However, the years passed, she met Rafi, married him, had children, and her dreams vanished little by little.
Working for Panda was rather convenient. When Sigal first started there, the Israeli cellular market had been in its infancy. She saw before her eyes how the company as a whole, and the Finance Department in particular, were growing. She was shocked to realize, time after time, how scanty the knowledge of the university graduates was, and how superficial their understanding of the accounting system. She was deeply disappointed when they were placed higher in the organizational hierarchy and on a higher salary grade. When the company went pub
lic, the senior employees received options and stocks. Due to her lower rank, Sigal only received options worth less than half her monthly salary.
The insult had been hard to bear. Sigal was deeply hurt. After all, she had been one of the most loyal employees, and had contributed so much to the company's growth. Why wasn't she granted the proper recognition?
She approached her supervisors and pointed it out to them. In return, she received a separate office the size of a closet and the title "controller's assistant," which was worthless in terms of salary.
Her first theft was unplanned. Sigal accidentally deleted a payment order, and consequently discovered the fault in the system. When it happened, Sigal was already disposed to committing the embezzlement, so she exploited the opportunity she had run into. She calculated how many shares she would have received, and what their value would have been, and decided that this would be the sum she would transfer for herself. She told herself that she was entitled to that money by right, so there was no reason not to take it.
Within two years, she had transferred to herself all the money she planned was hers by right. However, the new standard of living she had grown accustomed to became addictive. She continued to transfer money, perfecting her methods as she went. She told her husband that the money was an inheritance from a mysterious rich uncle, and showed him forged documents as evidence.
She also told her co-workers that the rise in her standard of living had been due to an inheritance, except that she told them that it was from her husband's uncle. Nobody suspected anything. Many at Panda even admired her for continuing working in spite of her new-found wealth, even though she had asked to cut down her work hours in order to spend more time with her kids.
Sigal knew that she should stop the money transfers. She felt worse with each transfer, but found a justification for each of them - her daughter's Bat-Mitzvah party, assisting her ailing father, a wedding gift for her beloved nephew, and more. She decided to take a course on the capital market and invest a part of the transferred money in various funds, so that she could return the money she had stolen and keep her high standard of living at the same time. She had self-confidence, excellent analytical skills, and she counted on her continuing success. However, the global economic crisis of 2008 shattered her plans. Investing in the capital market became too risky.
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