When senior Tyler Miles heard that Chris Marquet was coming to speak at UVM he couldn’t wait to share his Honors College thesis “Examining Instances of Embezzlement in Vermont” with the man known as the “Sherlock Holmes of Embezzlement.”
Miles got the chance prior to Marquet’s keynote address, “Vermont: A state of Thievery,” on April 8 at the Davis Center as part of the School of Business Administration’s “Master of Accountancy Director’s Speaker Series,” organized by Susan Hughes, professor of accounting.
“It was really interesting to hear about how he got into the field and to compare our research,” said Miles, who has a summer internship lined up at Ernst & Young in Boston before returning to UVM to start his master’s in accountancy. “We talked about our mutual interest in the psychology behind why people steal from employers and why Vermont has such a high rate of embezzlement.”
Marquet, founder and CEO of Marquet International, an investigative security consulting firm, talked further with Miles and his classmates in their Forensic Accounting & Fraud Investigation course taught by Barbara Arel, associate professor of business. “I really enjoyed talking with Tyler about his research on embezzlement and fraud in Vermont,” said Marquet. “He did a great job and has some interesting data. I’m honored to have spent time with him to learn more about his work on Vermont.”
Arel started the forensic course this year and says it is a natural extension to her more traditional auditing course in which students learn the basics of auditing. “It’s recommended that they go into auditing first to get that basic experience, but it has become a very in-demand track for CPA’s. Forensic accounting is definitely an area that is growing.”
Marquet spent much of his talk discussing data from his annual “2013 Marquet Report on Embezzlement” and why Vermont leads the nation in state employee theft. Since the financial crash of 2008, there has been a steady increase in reports of embezzlement, according to the report, with 554 cases of more than $100,000 occuring in 2013 for an average loss of $1.1 million. In Vermont, the amounts stolen primarily from local government, non-profits and credit unions are often less, but occur more freuently. Marquet speculates that because Vermont is comprised primarily of small town governments, non-profits and single family businesses, few financial controls are in place making it easier for a sole bookkeeper to steal from the coffers.
“Vermont ranked first for highest risk states for embezzlement in 2013 and has been on the list five of the past six years,” said Marquet, who uses an Embezzlement Propensity Factor formula to calculate state rankings. “Small business owners like making products like syrup, but not the accounting part, so they often hire someone to do it and put a lot of trust in them. Once someone starts getting away with it, they often do it for five or six or even 20 years. These losses can be devastating to small businesses.”
Listen to Arel talk about forensic accountng and embezzlement on Vermont Pubic Radio.