Accountant scams company out of $4.5M to buy, resell thousands of iPhones and iPads

Posted:
in iPhone
A recent court hearing has exposed a long-running scam in which a Canadian accountant used a corporate credit card to buy and resell some $6 million Canadian dollars (about $4.5 million) in iPhones and iPads.

IKEA


In all, Nadia Minetto bought 4,942 iPhones and 5,321 iPads for resale to Gabriel Fung, who in turn sold some of them through his Toronto-area electronics store, the National Post reports. Most of them, however, are said to have been sold to businesses in Hong Kong or to wholesalers.

Minetto's American Express card came from her employer, Wescom Solutions. She was responsible for approving transactions on all of the company's cards.

Minetto began abusing her card in May 2009. The Apple purchases began in 2011, and sales to Fung started in November that year. As time went on the resale scheme escalated, to the point that Fung was buying up to 20 devices at a time and paying in rolls of up to CA$5,000 in cash.

Deals were typically conducted in parking lots at the Yorkdale Shopping Centre and an Ikea in Vaughan. Towards the end of the scam, Fung rented a virtual office address to which Minetto could ship hardware directly. At that stage payments were made later, sometimes in front of Wescom's offices.

The situation went unnoticed until July 2014, when a consultant discovered the unusual spending. Wescom confronted Minetto, who managed to avoid criminal charges by offering reimbursement. An initial deal allowed her to keep her house, but forced her to hand over Audi and Mercedes vehicles, limiting a replacement car to CA$30,000.

The situation changed when it was discovered that Minetto had failed to reveal some of her other abuses, including a group trip to Las Vegas, and season tickets for the Toronto Raptors worth almost CA$6,000. In 2015 a judge authorized Wescom to seize her house.

The company went after money from Fung in 2017, who had allegedly paid some CA5.2 million for the Apple products. When brought to court he claimed that he wasn't aware of where the goods came from, having been promised only that they were "legit." The judge didn't buy the argument that Fung was oblivious to the source of the goods the entire time, and awarded Wescom over CA$5 million. Fung was granted a cross-claim for the same amount from Minetto.

He nevertheless appealed the decision. In a ruling this week, the Court of Appeal for Ontario found that while the prior judge had made a mistake in his concept of "willful blindness," it didn't affect the outcome of the case.

Comments

  • Reply 1 of 17
    MacProMacPro Posts: 18,406member
    My last company accountant went to jail. They seem to be (well some of them) a breed apart.
  • Reply 2 of 17
    SpamSandwichSpamSandwich Posts: 31,486member
    Bloody Canadians. ;)
    ArloTimetraveler
  • Reply 3 of 17
    sflocalsflocal Posts: 4,744member
    It just leaves me shaking my head to think that anyone - no matter how crafty they are - can think they can keep up such an illegal operation going without getting caught.  I can only guess that the woman started small, and it just mushroomed to where it was so big she got cocky and sloppy.

    I looked up her name on Facebook and only one person with that name in a town near Toronto.  I wonder if it's the same person.  An article says that she made a deal with the prosecutor as long as she could keep her house and settled... only to have that deal thrown out when she committed other crimes - which they eventually discovered - like vacations, sports tickets, etc.. that they took her house.

    What a mess this woman is.
  • Reply 4 of 17
    tokyojimutokyojimu Posts: 422member
    And what does this have to do with IKEA?
  • Reply 5 of 17
    The article image suggests IKEA is part of this scam. Is that really true? Why else is IKEA fronting this article?
     :/ 

    Is IKEA aware of this article? Perhaps we should send a copy of it to their press/media department ASAP.
    edited April 6
  • Reply 6 of 17
    robin huberrobin huber Posts: 3,293member
    Herman Cain proposes we go back to the gold standard. I propose we peg our currency to the world value of the iPhone.
    edited April 6
  • Reply 7 of 17
    hentaiboyhentaiboy Posts: 1,029member
    MacPro said:
    My last company accountant went to jail. They seem to be (well some of them) a breed apart.
    We had a company Payroll Admin pay herself two salaries for over a decade. Unfortunately she skipped the country before her deeds were discovered. 
  • Reply 8 of 17
    danoxdanox Posts: 387member
    sflocal said:
    It just leaves me shaking my head to think that anyone - no matter how crafty they are - can think they can keep up such an illegal operation going without getting caught.  I can only guess that the woman started small, and it just mushroomed to where it was so big she got cocky and sloppy.

    I looked up her name on Facebook and only one person with that name in a town near Toronto.  I wonder if it's the same person.  An article says that she made a deal with the prosecutor as long as she could keep her house and settled... only to have that deal thrown out when she committed other crimes - which they eventually discovered - like vacations, sports tickets, etc.. that they took her house.

    What a mess this woman is.
    White Collar crime pays again......
  • Reply 9 of 17
    danoxdanox Posts: 387member
    tokyojimu said:
    And what does this have to do with IKEA?
    Company colors are similar?
  • Reply 10 of 17
    larryjwlarryjw Posts: 424member
    Sloppily run organizations will always get scammed sooner or later.
  • Reply 11 of 17
    sflocalsflocal Posts: 4,744member
    hentaiboy said:
    MacPro said:
    My last company accountant went to jail. They seem to be (well some of them) a breed apart.
    We had a company Payroll Admin pay herself two salaries for over a decade. Unfortunately she skipped the country before her deeds were discovered. 
    Many years ago, I was tasked with investigating why certain financial entries didn't balance.  The amount was very small, almost not worth the effort but we in IT were asked to investigate it to rule out a system issue.  After spending the day investigating it, the entries in question didn't look right.  Asked my partner-in-crime for his opinion and between the two of us (outside of accounting) we realized the accounting manager was embezzling for years, almost right when he first started that job.  His managerial position allowed certain privileges - like the ability to activate one-sided-journal-entries - and he slipped up.

    Telling no one, we forwarded our findings directly to the CFO (who was a really cool guy) and the manager was promptly fired that day.  We don't know if he was criminally prosecuted as this was just before the dot-com era so news wasn't so freely available.  
  • Reply 12 of 17
    sflocalsflocal Posts: 4,744member
    ... redundant.

    edited April 6
  • Reply 13 of 17
    tokyojimu said:
    And what does this have to do with IKEA?
    “Deals were typically conducted in parking lots at the Yorkdale Shopping Centre and an Ikea in Vaughan.”
  • Reply 14 of 17
    larryjw said:
    Sloppily run organizations will always get scammed sooner or later.
    I used to work at a well known retail establishment. One of the employees was consistently having friends come in and buy merchandise with cash. The employee would open the cash drawer but actually put the money into a pants pocket. It also happened several times with regular customers who happened to pay cash. It didn't take long for the store's management team to notice something was off. Security footage was pulled and which employee it was was quickly determined. From there they let it go for a while longer, with only the management team and some inventory people being aware. They built their case, confronted the employee (who could not deny what was shown as proof) and then terminated the employment.

    Another example: I was acquaintances with a guy who bought a window A/C unit at Home Depot. He had it on a cart and the cashier told him to hold onto the receipt to show on his way out the door in case he was stopped. He wasn't. So he loaded the unit into his truck, went back in, got another cart, grabbed another unit but held onto the same receipt and walked out again. Nobody stopped him. That wast the type of guy he was, he saw a potential loophole and attempted to exploit it. Since that worked he started doing it more. He finally got busted when he tried the same trick at K-Mart with a television.

    People will try to cheat their way through many things or just see what they can get away with, whether they are on the inside or the outside. It has nothing to do with if an organization is sloppily run or is well run. 
  • Reply 15 of 17
    larryjwlarryjw Posts: 424member
    larryjw said:
    Sloppily run organizations will always get scammed sooner or later.
    I used to work at a well known retail establishment. One of the employees was consistently having friends come in and buy merchandise with cash. The employee would open the cash drawer but actually put the money into a pants pocket. It also happened several times with regular customers who happened to pay cash. It didn't take long for the store's management team to notice something was off. Security footage was pulled and which employee it was was quickly determined. From there they let it go for a while longer, with only the management team and some inventory people being aware. They built their case, confronted the employee (who could not deny what was shown as proof) and then terminated the employment.

    Another example: I was acquaintances with a guy who bought a window A/C unit at Home Depot. He had it on a cart and the cashier told him to hold onto the receipt to show on his way out the door in case he was stopped. He wasn't. So he loaded the unit into his truck, went back in, got another cart, grabbed another unit but held onto the same receipt and walked out again. Nobody stopped him. That wast the type of guy he was, he saw a potential loophole and attempted to exploit it. Since that worked he started doing it more. He finally got busted when he tried the same trick at K-Mart with a television.

    People will try to cheat their way through many things or just see what they can get away with, whether they are on the inside or the outside. It has nothing to do with if an organization is sloppily run or is well run. 
    Not to be too pedantic, but you're making the mistake of equating a material implication with its converse. The converse of A implies B is B implies A. 

    Thus: "If an organization is sloppily run then it will be scammed sooner or later" was my statement. I didn't state that "If an organization is scammed then it was sloppily run" -- the converse. 

    Now, this story was about an organization setting up one individual with seemingly sole authority to review and approve credit card transactions and without oversight. This is a clear violation of standard accounting practices. So, I'm justified in accusing this business of sloppy business practices. 
    edited April 8
  • Reply 16 of 17
    maestro64maestro64 Posts: 4,673member
    I thought that IKEA store looked familiar, I stay at the hotel right across the street from it when I am in Toronto on business. I wonder if I ever saw them doing their deal.
  • Reply 17 of 17
    SpamSandwichSpamSandwich Posts: 31,486member
    Herman Cain proposes we go back to the gold standard. I propose we peg our currency to the world value of the iPhone.
    Didn’t like Cain as a presidential candidate but if he were appointed head of the Fed, that would be amazing.
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