The Fight Against Crime: Notes From the Front : Sleuth Grabs Fraud by Its White Collar

Stephen N. Getzoff is no ordinary rent-a-cop. Sure, he’s a reserve police officer. But armed with a calculator and a balance sheet, there’s a good chance Getzoff can tell if your company is being ripped off.

White-collar fraud is a multibillion dollar business, and people like Getzoff are the Sam Spades of corporate crime. Getzoff recently became a Certified Fraud Examiner after three decades of fraud sleuthing, tying him into a worldwide network of white-collar crime busters.

“A CFE is not just an accountant, and not just an investigator, and not just a security and loss prevention specialist,” said Curt Garner, a spokesman for the Assn. of Certified Fraud Examiners. “They’re a hybrid.”

Regular law-enforcement agencies rarely have the expertise or resources to fully investigate white-collar fraud, Garner said. So CFEs are important because they “are able to give a case essentially gift-wrapped to prosecutors.”

Fraud costs businesses anywhere from $186 billion to $310 billion a year nationwide. And with jobs still hard to find, Getzoff sees the fraud-hunting business as a growth industry because more and more disgruntled employees decide to steal what they feel they deserve.

“Eighty percent of all employees in the work force have stolen,” Getzoff said, tossing out the everyday examples of office workers taking home pencils and paper. “But employees do not steal. They take what they feel they’re entitled to.”

In some cases, like that of the bookkeeper who embezzled $400,000 from a Beverly Hills doctor, the crimes are more than just petty theft. But his reasons were the same as the clerk who swipes a ream of paper.

“The bookkeeper who took $400,000 rationalized that the doctor was making millions while he was the one who kept the place together,” Getzoff said.

Getzoff offered up the example of an Orange County steel company. For 50 years, it was a profitable family-run business, he said. But when it passed from one generation to the next, an outside manager took over operations. The family called Getzoff at his Encino accounting office when they began losing money.

Getzoff discovered that the manager had a “personal relationship with a key bookkeeper,” and had been ordering shipping clerks to send materials to a new destination.

“He had set up his own business,” Getzoff said. “It’s like when your car gets stripped. He left a stripped company.”

Getzoff has seen the uglier side of corporate life: the North Valley medical company where an employee illegally cashed $6 million in company checks; the jewelry shop whose owner was the store’s biggest thief, and the Glendale doctor’s office manager who cashed checks to her boss and used the money to supply her boyfriend’s drug habit.

In an ideal world, Getzoff admitted, the government would be able to investigate all white-collar crime. But he said it’s not surprising that the burden of sleuthing falls on the private sector.

Getzoff noted that a large portion of the LAPD’s calls are on domestic violence. “If you’ve got a cop, what are you going to send him out on?” Getzoff asked rhetorically. “The domestic violence call, or ‘my employee stole $100,000’?”

“When you look at the number of (public) agents to investigate these crimes, as compared to the number of cases, it’s impossible,” he said. “They’re buried.”

Getzoff became an accountant 22 years ago, and as a junior accountant he got a taste of fraud-busting and was hooked. When he started his own firm a couple of years later, he made it known he could handle white-collar crime as well as routine accounting.

Now a quarter of his work is fraud-related, and he also teaches at a North Hollywood detective academy and helps out the LAPD on fraud cases.

He enjoys the intellectual challenge of sleuthing, but says it’s not all excitement: “It can be sort of Sherlock Holmes-ish, but a lot of it is drudgery.”

As anyone who’s read a spreadsheet knows.