Fraud: nightmare of any business or lender in Commodity Trading.
Backis faces up to 20 years in prison, a three-year term of supervised release and a fine of up to $250,000 when she is sentenced on March 28, 2017 by U.S. District Judge Mae A. D’Agostino in Albany. As part of her guilty plea, Backis has agreed to pay Cargill at least $3.5 million in restitution and to forfeiture of her house in Athens, an investment brokerage account, and her Cargill pension benefits.*
Ms. Diane Backis, former accounting manager at Cargill, pleaded guilty on Nov. 28 to stealing at least $3.1 million from the Minneapolis-based company over a 10-year period.
While at Cargill, Ms. Backis was responsible for accounting functions in Albany related to the company’s grain operations, including creating customer contracts”.
$310,000 per year on 10-years at a Cargill terminal was perhaps .2% that could have been dissimulated into the grain pile shrink.
Then came a year where the U.S dollar (high) has impaired the export business. Someone in Minneapolis inquires the terminal receiving less quantity of a grain product about why the shrinkage remains the same in Albany ?
Employees’ theft is rampant.
The nightmare of any business or lender in commodity trading is fraud.
What is good today or what is good as business counter party can go wrong.
The good company crossing the lines, committing a fraud becomes the rogue company.
The second comment fraud at the commodity trader is the financial fraud. What is this position ? – never mind it is just “something”…
The trading manager at the company should never take what a trader says at its face value because the management of the commodity traders is comprised predominantly of traders predisposed to defend their books.
They might be also reluctant to recognize losses at market valuations they considered “below fundamentals” or protect the information on certain aspects of their business which can make their entity less attractive at a point in time to their stakeholders or counterparties. Some companies systematically use devices and complex transactions following the IFRS and GAAP accounting norms but not their spirit.
Therefore, it is not a static risk management but a continual verification inside of the company or with the counterparty at any giving time that is required.
This very procedural verification ensures that there is no fraudulent transaction.
Know your employees, know where your company and where the counterparty is in the market. Stay as close as possible to be able to anticipate and detect. What is known as KYC in the banking sector since 400 years.
For the risk profiling of the counterparty
P&C / 1-226-348-5610
Simon Jacques is a certified Energy Risk Professional, as distinguished by the prestigious Global Association of Risk Professionals.
For the risk profiling of counterparty and pointers.
P&C / 1-226-348-5610
keywords: CARGILL, FRAUD, KYC.