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Financial Statement Fraud Casebook: Baking the Ledgers and Cooking the Books by Joseph T. Wells

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Chapter 12

Pulling the Strings

Jay Dawdy

Bill “Papa” Thomas was the warehouse manager for Jenkins Manufacturing in Lubbock, Texas. He was a native Texan and a straight shooter who had worked at Jenkins for more than 30 years. Everyone at the firm knew him and they all just called him Papa. He was friendly, but Papa called them like he saw them. He wasn't afraid to speak his mind in that big Texas drawl he had. Jenkins Manufacturing had recently been acquired by a large multinational conglomerate, Yellowstar Industries, and Papa was being asked to perform write-downs of inventory that far exceeded anything he'd done in the past. He didn't understand why these write-downs were necessary. Papa was pissed, exclaiming to one of his colleagues, “Why in the Sam Hill do these pencil neck geeks from Yellowstar want to write down this perfectly good inventory?” But ultimately Papa didn't want to disappoint his new bosses. He and other Jenkins execs were being granted stock options in Yellowstar as part of the acquisition and he wanted to cash out and retire. Papa did what they asked him to do. Papa was a puppet.

Karen Jillwater, better known as “Jill” to all of her colleagues, was under a lot of pressure. She was a senior accounting manager at Hope Electronics in Annapolis, Maryland, where she'd been working for about 10 years. She was stressed out that her new bosses at Yellowstar Industries, which had just acquired Hope, had a different way of doing things. Jill was a good accountant ...

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