Employee Reimbursement Fraud

[mysonsmom1]

Employee reimbursement dishonesty

I have parents and is a part of their Childcare reimbursement program. Lately, the husband has been bringing in forms that were partially completed without the amount paid completed. Me rushing in the morning, I informed the parent to make sure that the correct dollar amount was in the forms because it is reported to the IRS. Even received verbal confirmation from the client that he would put the correct information. Today, the reimbursement form was completely blank without any information at all and I refused to sign it. The client sat down and filled out the form over inflating the amount that they paid for childcare for their children by $225.00. I took a copy of the form so that I could sit down and verify the dollar amount confirming the inflated payment.

I know that my mistake is trusting the client and I have to make policy changes for giving myself at least three days to receive the reimbursement forms. I also made the mistake of rushing to complete the forms. The parents have been here since July of 2014 and I am not certain how much they have inflated the daycare expenses over the time frame. I called their reimbursement office and asked for their advice as to how to handle the problem. The representative told me that they could come after me for fraud because I signed the paperwork.

I no longer trust the client. I want to do what is right at the end of the day. Some people suggest immediate termination because they used my signature to report fraudulent information for higher reimbursements from their employer. The fact that they could jeopardize my business makes me really upset and I have a guideline in my policy that does say that I can terminate immediately. At this point, I am where I want to be financially and I don’t want to go the hustle of looking for new children to replace the two children in care. Yet, I feel violated and I am going to notify the parents of the discrepancy. I have also made an immediate policy change to give myself time to complete the form accurately in the future. Their company wanted me to report the information but that could cause the husband to lose his job.

I want to see what you would do in this situation. What suggestions do you have? Its easy to say terminate and find replacements but that takes time and could impact my bottom line. Would you change policies and move forward with the clients? Would you wipe your hands clean of the situation and terminate based on fraud? Would you report him with the hope that the company wont come after you?

[Blackcat31]

Employee reimbursement fraud

I have parents and is a part of their Childcare reimbursement program. Lately, the husband has been bringing in forms that were partially completed without the amount paid completed. Me rushing in the morning, I informed the parent to make sure that the correct dollar amount was in the forms because it is reported to the IRS. Even received verbal confirmation from the client that he would put the correct information. Today, the reimbursement form was completely blank without any information at all and I refused to sign it. The client sat down and filled out the form over inflating the amount that they paid for childcare for their children by $225.00. I took a copy of the form so that I could sit down and verify the dollar amount confirming the inflated payment.

I know that my mistake is trusting the client and I have to make policy changes for giving myself at least three days to receive the reimbursement forms. I also made the mistake of rushing to complete the forms. The parents have been here since July of 2014 and I am not certain how much they have inflated the daycare expenses over the time frame. I called their reimbursement office and asked for their advice as to how to handle the problem. The representative told me that they could come after me for fraud because I signed the paperwork.

I no longer trust the client. I want to do what is right at the end of the day. Some people suggest immediate termination because they used my signature to report fraudulent information for higher reimbursements from their employer. The fact that they could jeopardize my business makes me really upset and I have a guideline in my policy that does say that I can terminate immediately. At this point, I am where I want to be financially and I don’t want to go the hustle of looking for new children to replace the two children in care. Yet, I feel violated and I am going to notify the parents of the discrepancy. I have also made an immediate policy change to give myself time to complete the form accurately in the future. Their company wanted me to report the information but that could cause the husband to lose his job.

I want to see what you would do in this situation. What suggestions do you have? Its easy to say terminate and find replacements but that takes time and could impact my bottom line. Would you change policies and move forward with the clients? Would you wipe your hands clean of the situation and terminate based on fraud? Would you report him with the hope that the company wont come after you?

Personally, I would contact Tom Copeland and ask him what his advice would be.

Here is his contact info http://profile.typepad.com/6p0133f3fc5805970b

[NightOwl]

What they are doing equates to theft from their employer. I would terminate immediately and without hesitation because of the horrible predicament they put YOU in. They made you an unwilling accomplice to their crime.

I'm not sure if I would report because, like you, I'd be afraid of the fallout. Those agencies don't always care that you were deceived as well. Your signature is what ok'ed their reimbursement. I would contact a lawyer and get their advice before proceeding.

[Blackcat31]

I want to see what you would do in this situation. What suggestions do you have? Its easy to say terminate and find replacements but that takes time and could impact my bottom line. Would you change policies and move forward with the clients? Would you wipe your hands clean of the situation and terminate based on fraud? Would you report him with the hope that the company wont come after you?

Personally, I would always give a written receipt with payment and have the parents needing reimbursement use that as their proof of payment.

I don't know what type of reimbursement this is ...private company or something like Flex spending....where the parent estimates the yearly costs and does not pay taxes on it.... but I would no longer sign anything without filling it in yourself as well as keeping a copy.

I understand where the company is coming from saying YOU could be liable but I find that hard to believe.... legally I am sure you could be, but seems there is a MUCH bigger fish to fry in this situation that your signature and holding you accountable is minimal at best.

Like I said, being that Tom Copeland is an attorney AND a tax guru...he is your best bet for information and advice.

[mysonsmom1]

research

I have looked up some previous post of providers that have had similar circumstances and they also suggested immediate termination and a request for all of the forms submitted to the employer to verify the information.

I will contact an attorney for legal advice and give the parents a formal letter requesting the forms that were submitted to the employer to verify the amounts previously submitted to the employer.

I've already posted an add regarding two vacancies.

[SignMeUp]

Keep good records of all of your income and copies of receipts given.
A few years ago a parent told me that they were submitting my receipts, but changed them "when we needed to." :confused::confused::confused:

I couldn't figure out exactly what they were trying to pull, but I had always noticed how many receipts they "lost" and requested duplicate copies of, so I changed my contract to include charges for duplicate receipts and somehow they never "lost" one again. My duplicates also now say DUPLICATE on them ::

[Blackcat31]

I have looked up some previous post of providers that have had similar circumstances and they also suggested immediate termination and a request for all of the forms submitted to the employer to verify the information.

I will contact an attorney for legal advice and give the parents a formal letter requesting the forms that were submitted to the employer to verify the amounts previously submitted to the employer.

I've already posted an add regarding two vacancies.

If you haven't termed yet and will still be seeing the family, I would write up a statement saying:

• THEY completed the forms AFTER asking you to sign them
• Verifying the CORRECT amount paid to date to you
• Acknowledging the discrepancies

.
I'd tell them that you WILL be pursuing legal action against them unless they sign off to the above.

That could very well be enough to remove any responsibility you have in this.

[Cat Herder]

If you use MMK Pro you can print out a W-10 with the correct total paid, sign it in blue ink and attach it to the next form that YOU mail in.

[Dilley Beans]

I would separate myself from them immediately, if you don't, you're going to have evidence built up that implies you did this knowingly. I would seek to correct the "error" with everyone you need to. Request copies of everything sent, audit and submit corrections where needed, if needed.

BTW, If he loses his job that is not on you. He is thieving and that is a good reason to fire an employee regardless to what is being stolen.

[Solandia]

I would term, too. Just because he is pulling you down with his dishonesty, and that isn't good. Keep good records, and if there is a discrepancy that gets caught, the dad will have to prove where the money went. Keep your records spotless, pay your taxes, and it will be fine.

On a side note, I think it would be considered more tax evasion rather than company theft. It is "his" money he contributed to the childcare flex spending, pretax. He is padding his reimbursement to get his income paid back, tax-free. That is on HIM, not you, IMO. He could still change the numbers, even if he had you sign it after it was filled out.

[Thriftylady]

I know it hurts to loose income, I am fighting just trying to gain a little . But really I would term now. AFTER they signed papers allowing me to see what they did and perhaps signed a printout saying what they have paid for the year. Just tell them you need them to sign it for your records. Then I would hand them a term notice, with what they did as the reason.

[TomCopeland]

Dependent care plans

Employee reimbursement dishonesty

I have parents and is a part of their Childcare reimbursement program. Lately, the husband has been bringing in forms that were partially completed without the amount paid completed. Me rushing in the morning, I informed the parent to make sure that the correct dollar amount was in the forms because it is reported to the IRS. Even received verbal confirmation from the client that he would put the correct information. Today, the reimbursement form was completely blank without any information at all and I refused to sign it. The client sat down and filled out the form over inflating the amount that they paid for childcare for their children by $225.00. I took a copy of the form so that I could sit down and verify the dollar amount confirming the inflated payment.

I know that my mistake is trusting the client and I have to make policy changes for giving myself at least three days to receive the reimbursement forms. I also made the mistake of rushing to complete the forms. The parents have been here since July of 2014 and I am not certain how much they have inflated the daycare expenses over the time frame. I called their reimbursement office and asked for their advice as to how to handle the problem. The representative told me that they could come after me for fraud because I signed the paperwork.

I no longer trust the client. I want to do what is right at the end of the day. Some people suggest immediate termination because they used my signature to report fraudulent information for higher reimbursements from their employer. The fact that they could jeopardize my business makes me really upset and I have a guideline in my policy that does say that I can terminate immediately. At this point, I am where I want to be financially and I don’t want to go the hustle of looking for new children to replace the two children in care. Yet, I feel violated and I am going to notify the parents of the discrepancy. I have also made an immediate policy change to give myself time to complete the form accurately in the future. Their company wanted me to report the information but that could cause the husband to lose his job.

I want to see what you would do in this situation. What suggestions do you have? Its easy to say terminate and find replacements but that takes time and could impact my bottom line. Would you change policies and move forward with the clients? Would you wipe your hands clean of the situation and terminate based on fraud? Would you report him with the hope that the company wont come after you?

When you sign a receipt you are indicating that you received money. If you were audited by the IRS and they saw the receipts you signed, they would assume that you received this money and would tax you on it. That's the danger of signing blank receipts.

I've talked with one provider who signed a monthly receipt at the first of the money, before being paid for the month, and the parent didn't return.

If you know how much was on the receipts that you signed, add up how much extra money you did not get and ask the parent to give you this extra money. If you don't know the total, ask the parents for copies of the receipts. If the parent argues with you, tell him you will terminate him immediately unless he gives you the extra money. After he gives you the money, you may still want to terminate him.

Another alternative - raise your rates for this parent until you receive the extra money. This allows the parent to pay you in installments.

The company representative doesn't understand that the employee committed fraud by not paying you the amount on the receipt. If the employer ever gets audited, your testimony could cause the company to be in big trouble with the IRS, because they took no action when told that one of their employees committed fraud.