An employee at a Bloomington-based Hot Spring Spa's maker is accused of siphoning $767,000 out of the company by writing herself more than 100 checks over time and forging her boss's signature to authorize them, according to charges. Keo Xiong allegedly used the money to fund trips to a casino.
A hundred-plus checks is not a slip-up, it's a routine — one that apparently ran long enough, and quietly enough, to add up to more than three-quarters of a million dollars before anyone caught it. That's the part of this case that should worry any small business owner who signs off on payroll or vendor checks without a second set of eyes on the account.
The case underscores a familiar vulnerability for smaller, family-run and closely held businesses: an employee trusted with check-writing authority who has few if any external checks on that power. Fraud involving forged signatures and self-written checks is exactly the kind of scheme forensic accountants and small-business insurers point to when they push for separation of financial duties, even at companies too small to have a full accounting department.