Blake Oliver: Private jets, designer shopping sprees, expensive dinners. Lavish spa treatments. This is how one Vegas hotel manager was living large after allegedly stealing over $773,000 in guest refunds.
I'm Blake Oliver. And this is The Accounting Podcast.
Today, we're looking at fraud charges against a former hotel manager at a popular Las Vegas resort as reported by the Las Vegas Review Journal.
Brandon Johnson was an operations manager at the Aria Resort and Casino on the Vegas Strip. A co-worker noticed that Johnson was suddenly making extravagant purchases. Johnson told the coworker he was moonlighting as a private chef. But Johnson had never mentioned being a chef and the coworker had never seen him cook.
Suspicious about where Johnson was getting all this money. The co-worker dug into Johnson's work transactions. What he found was stunning. Johnson had processed over 200 fraudulent refunds totaling more than three quarters of a million dollars onto his own personal Chase debit card over the previous year.
The scheme started small in July, 2022 with just a couple of refunds. But it escalated over time, ramping up to as many as 37 fraudulent transactions in a month.
According to police reports. Johnson allegedly moved the stolen money between various Chase accounts to conceal the source of fraudulent funds.
After gathering evidence, Johnson's coworker reported the findings to Aria's management. But the coworker claims their own employment was then terminated by Aria and parent company MGM Resorts.
With an internal investigation underway, Johnson quit his job in July 2023. He surrendered to police in September and now faces 15 felony charges, including theft, computer crime, and money laundering.
So, how could MGM have detected and prevented this type of fraud? Here are a few ideas.
First, do regular audits of refund transactions. Auditing a sample of refunds could have spotted the high volume of refunds to one account.
Second, put controls over refunds, like requiring manager approval over a certain dollar threshold per employee per month.
Third, only allow refunds to cards previously used on guest accounts, which would prevent funds from being redirected to an employee's personal account.
Fourth, use data analytics to flag suspicious transactions, such as a high number of refunds by a single employee or multiple refunds to the same account. Automated reports could flag anomalies.
Fifth and finally, don't fire whistleblowers. Reward them. The co-worker who reported the fraud says Aria fired them after making the report. Shooting the messenger will discourage other employees from reporting fraud in the future.
Regularly evaluating and strengthening internal controls is one of the best ways corporations can protect against fraud. The costs of lax oversight can be massive. Let's hope MGM takes steps to improve its controls going forward.
This has been a news update from The Accounting Podcast. I'm Blake Oliver. Thanks for listening.