MGT 351- University of Miami_Fraud Report_ Larsen Convenience Store, a small convenience store located in Canton, Georgia. The store suffered an arson fire that resulted in a total loss of property and assets

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MGT 351- University of Miami_Fraud Report_ Larsen Convenience Store, a small convenience store located in Canton, Georgia. The store suffered an arson fire that resulted in a total loss of property a... nd assets BACKGROUND Greg Larsen (“the principal”) is the owner and operator of Larsen Convenience Store, a small convenience store located in Canton, Georgia. This small business provides grocery, fuel, tobacco, and media services within the small community in which it is located. In the fiscal year 2015, all categories of sales showed a marked increase in comparison to previous years. On December 31, 2015, the store suffered an arson fire that resulted in a total loss of property and assets. ISSUES TO BRING TO YOUR ATTENTION The fire was started on the last day of the physical and fiscal year. Four sources of ignition were located on the premises by fire investigators. Chemical tests performed on materials from the scene provided evidence of an incendiary chemical in the same category as gasoline. A physical inventory completed 90 days before the fire was done in a manner that was inconsistent with previous inventories. This inventory showed a store stocked with physical inventory which was inconsistent with customer accounts of the store in the time leading up to the fire. Records indicate over 600 insufficient funds charges against Mr. Larsen, as well as a loan taken out prior to the fire to help halt a constant overdraft of the owner’s account. EXECUTIVE SUMMARY We analyzed the sworn proof of loss, tax returns, personal financial statements, sales and use taxes transcripts, vendor sales records, interviews and sworn testimonies. When the testimony of the tax accountant identified notable discrepancies, we further examined the physical documents.  The tax accountant admitted to forging the inventory from 90 days before the fire in the time following the fire. [Show More]

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