MENDOCINO, Calif. (KGO) — What if you stopped at an ATM for extra cash and discovered thousands of dollars missing from your account?
It happened to a Mendocino couple who found out someone had used their checking account to pay bills and printed fake checks.
How can that happen? 7 On Your Side got some answers and helped get their money back.
The couple was shocked to discover almost $18,000 missing from their checking account. Their statement shows three fake checks and 17 fraudulent charges. The bank didn’t say how that happened — but we found out how scammers might have pulled this off.
Nona Smith and her husband Art were enjoying a peaceful retirement in the seaside town of Mendocino — until scammers upended their lives.
“It was definitely a mess. And it disrupted our lives,” said Nona. “It was a terrible experience and made me very uncomfortable and mistrustful. My husband is…
PAYROLL & HR CONTROLS (PREVENTING “GHOST” SCHEMES)
Payroll fraud is often the hardest to detect because it “looks” like a normal business expense.
- Segregation of Duties (SoD): The person who adds new employees to the system must not be the same person who approves the monthly pay run.
- Mandatory Vacation Policy: Require all financial and HR staff to take 5–10 consecutive days of leave annually. Fraud often surfaces when the perpetrator isn’t there to “hide” the trail.
- Ghost Employee Audit: Perform a quarterly “Headcount Reconciliation” where managers must physically verify every name on their payroll list exists.
- Self-Pay Blocking: Ensure the payroll software has a hard-coded block preventing administrators from editing their own salary or bank details.