Computer Violations – Theft from an Employer

As promised, we are sharing information with you, the internet surfers, about the first investigations into computer violations conducted at the National Unit for Fraud Investigations. We hope to allow you to get a sneak preview into a different time in which we, the investigators, had to cope with criminals specializing in computer violations while equipped only with very limited information and means.

Yoav Ben Yehuda (fabricated name), father of five children, was living in a small apartment with his family in Petach Tikvah. His wife was a housewife devoted to caring for the children. Yoav was then (approximately 15 years ago) employed as a junior accountant at a human resources company in Ramat Gan.

Their difficult living conditions and ambition to live in a house in one of the settlements in Shomron led the Ben Yehudas to make a significant life decision - to take out a large mortgage from the Tfachot Bank and purchase their dream house in Shomron. The mortgage applications were sent to the bank. The cosigners on the loan, family and friends of the Ben Yehudas, signed the application as well.

The apartment in Petach Tikvah was sold at an extremely low rate. In the summer of 1987, the family relocated to Shomron. The kids were absorbed into the settlement’s educational system. The mother began working as an aid in a nursery school, and Yoav continued working for the same company as before.

The years passed and their needs increased. The mortgage began to drain the family budget. Yoav began taking loans from family members and other private lenders. The bank cut off their funding. The amount owed to the bank had long surpassed their approved credit amount. The kids were also paying the price by not being able to go on school trips. The refrigerator contained only the most basic groceries.

Creditors pressured Yoav to pay off his debt. The Ben Yehuda family was suffering from unbearable pressure.  “We can’t go on like this”. Yoav decided.  “The family means more to me than anything. I can’t allow it to sink because of a financial debt”. That’s what he wanted to believe.

Yoav then decided to take action. Yoav joined a club of computer criminals, knowingly and with advance planning. As an account, he was well informed about how to take advantage of the security loopholes and lack of appropriate controls on the payment system of the company in which he worked.  In this manner, Yoav deceitfully extracted 300 thousand shekels from the company.

 The company hired temporary employees. Every new employee at the company signed forms in which they filled out the details of their bank accounts for direct deposit purposes. A few months later, when an employee would leave the company, Yoav would not erase their names and personal details from the payment system as required by his supervisors. Those temporary employees had already been targeted by Yoav in order to assist him with his plan.

Yoav had three inactive accounts in a few banks. The accounts were under his and his wife’s names.  Yoav estimated that these three accounts would not be sufficient to carry out his plan and so he asked two of his friends (who he had studied at a yeshiva with) to open two new bank accounts, without sharing with them the real reason why.

Yoav pulled the pay slips of five temporary employees who had left the company a few months before from the computerized payment system.  He created fictitious pay slips for these employees (who did not even exist) and deposited the wages into accounts that he had previously opened.

In the beginning, he did this for wages at the normal rate in order to avoid arousing suspicion. After eight months of depositing these funds into his accounts without anyone taking notice, he worked up the courage to double the fictitious wages deposited into his accounts.

 His appetite had no boundaries, and the salaries were then tripled. The company’s security system had its guard down, and had not caught on to the continued sting operation executed by Yoav, the at-home criminal.  As in all situations where security and control systems do not function correctly, chance reveals the actions of the perpetrator - as in Yoav’s case.

Ten months later, Yoav’s scheme was cut short.  This was during the winter of 1991. Yoav came to work sick, because he didn’t want to take a sick day and miss a day of work.  “This scheme is working, why stop?” he thought to himself. During one of Yoav’s many bathroom breaks that day, Mazal Sharabi (fabricated name), an accountant working in the same room as Yoav, noticed a paycheck prepared for an employee no longer working at the company up on Yoav’s computer screen.

Shocked by what she had discovered, she checked the payment system again in order to make sure that she had seen correctly.  After it was clear to her that this employee had not returned to work and that he had, in fact, left a few months earlier Mazal immediately ran to the CEO of the company. The doors were closed. The Financial Director was urgently summoned to the room and they began reconstructing all the deposits issued from Yoav’s computer (without Yoav’s knowledge).

Within a few hours, a detailed report of all the payments issued to employees no longer working at the company had been prepared. The company CEO lacked the legal authority to check the identities of the owners of the bank accounts receiving the fictitious salaries. After consulting with the company’s Legal Advisor, they decided to file an official complaint due to suspicion of embezzling company funds via the computer.  The complaint was received by the police.

  The Investigation Officer at the time, Chief Police Superintendent Ben Ishai, didn’t know what to do about the complaint since police investigators had not yet been trained appropriately to deal with computer violations. 

Approximately one month before the complaint was registered, I lectured various investigation officers about the growing trend of computer violations. Chief Police Superintendent Ben Ishai, who was at the lecture, advised the company CEO to meet with me and bring all of the documents related to the complaint.

A short perusal of the materials that he brought me was sufficient to understand Yoav Ben Yehuda’s work method. The next day, the suspect was called in for an investigation at the unit’s offices. During the investigation he tried, of course, to avoid blame. Gradual revelation of our findings convinced him, however, that he had no choice but to cooperate with us and admit to the actions he was accused of.

It took Ben Yehuda hours to make a full proclamation of his actions. That same day he was arrested for an additional three days under court order, in order to enable us to investigate the other partners to the offense and prevent any disruption of the investigation.

Hard work on behalf of the investigation team helped locate the other people involved, who had assisted Yoav in opening bank accounts in exchange for a commission. All parties involved confessed to the actions they were attributed with.

 A few months later, a harsh indictment was written against Yoav and his partners. The attorney that he hired advised him to agree to a plea bargain. The arrangement approved by the court sentenced Yoav to a year and a half imprisonment. His partners were also found guilty of conducting computer violations, also agreed to a plea bargain, and were sentenced to six months imprisonment (which they exchanged for community service).

 By: Uri Shitrit