Embezzled $14.8M could cause woes for North Side firm Matthews International
Nearly $15 million siphoned from North Side-based Matthews International is among the largest such cases of fraud reported in Pennsylvania history, and could have major regulatory ramifications for the company, according to a Boston-based fraud expert.
Federal investigators are investigating the $14.8 million Matthews lost through “weaknesses” in its treasury controls, according to the third-quarter report filed this week with the Securities and Exchange Commission.
Christopher Marquet is a Boston-based fraud investigator and consultant who publishes a regular report on the year's largest embezzlements.
More than $14 million “is big; it's going to be at the top of the scale,” he said. “It's a huge amount of money to steal from a company. ... Something like this could have a devastating effect on a company.”
For publicly traded companies like Matthews, which has more than 10,000 employees on six continents and reported $1.1 billion in sales last year, large-scale fraud can affect hiring, investment in new equipment, and even open the company to fines from the SEC for improper reporting, Marquet said.
He said such cases, when undetected for so long, might not reflect an employee's disgruntlement so much as a lifestyle the alleged embezzler becomes accustomed to.
“A lot of these cases, there may be something that happens along the way: a gambling problem, a divorce, a couple kids in college at the same time,” he said.
Phil DiLucente, representing former employee Cindy Mills, said his client was fired from Matthews International two months ago. Her Linked-In page states she had been at Matthews for more than 34 years, most recently as its treasury specialist, handling cash and bank accounts.
DiLucente declined to say whether the investigation led to any of her assets being seized or frozen.
“It's been somewhat upsetting she lost her job; she always believed she was a great employee,” DiLucente said. “She was loyal to a lot of folks there, even if she wasn't always treated as she should have been. ... From all accounts, Matthews was very happy with her there.”
Some who had worked with Mills had no idea about the investigation and no clue it would have been coming.
“She was always a pleasure to work with, always very professional and cheerful,” said James Nolan, who said Mills had been his “counterpart” when he worked at Janney Montgomery Scott on several of Matthews International's stock buybacks over the course of three or four years. He had not been aware of the investigation.
“In this business, not everyone has the tendency to be as nice and professional as Cindy has been. ... I'm floored.”
Matthew Santoni is a staff writer for Trib Total Media. He can be reached at 412-391- 0927 or email@example.com.