Our firm was hired by a private manufacturing company to conduct an investigation of a former employee, who was the Chief Financial Officer and Controller. This long time employee was accused of fraud and subsequently terminated. He filed a lawsuit against the manufacturer for wrongful termination. The company, who was defending the lawsuit, requested MDD review the results of an internal investigation they had initiated, and provide an independent report as to whether the employee had committed any misconduct.
MDD conducted interviews with the employee’s manager and colleagues, to obtain background information about the allegations that had been made against the former employee. Based on our investigation, we discovered that the employee had manipulated the company’s financial records in order to inflate the profit reported each quarter. By doing so, the employee made it appear that the company had exceeded its quarterly targets, resulting in very large bonuses being paid out to the employee. As a result, the company was able to support their termination of the employee and settled the lawsuit by paying a minimal severance.