A man who spent his entire 32-year-career in the accounting department of Frisch's Restaurants — purveyors of the iconic Big Boy — has been accused of stealing $3.3 million from the company, which he may or may not have blown at the casino.
In a statement filed with the SEC, the company assured shareholders that clown is long gone and it won't happen again. Oh, and they're suing him:
The Company's lawsuit alleges that Michael Hudson, the former assistant treasurer, forged payroll documents and created false documents and accounting entries to divert Company funds into his personal accounts. As a part of the civil complaint filed in the Court of Common Pleas for Hamilton County, Ohio, the Company is seeking full restitution of the diverted funds. According to Company representatives, Mr. Hudson told them that he has assumed full responsibility for his fraudulent actions; he has resigned.
The Company's Audit Committee of the Board of Directors has launched a special investigation and retained James Cummins, an attorney with the law firm of Cummins & Brown LLC and forensic accountants at Deloitte Financial Advisory Services LLP to assist with the investigation which is expected to conclude in the next several weeks.
"While we were saddened to learn of these unlawful and fraudulent acts carried out against the Company by a trusted and long-time employee, we took swift action as soon as we discovered the fraud," said Craig Maier, Frisch's Chief Executive Officer. "As a precautionary measure, the Company is implementing an additional layer of checks and balances in our accounting systems to protect against this type of fraudulent behavior in the future."
The fraud itself isn't all that remarkable, but the way in which Hudson packed his shit and stormed out absolutely is. From Cincinnati.com:
A routine review of records in mid December uncovered discrepancies. A new worker conducting a internal audit got credit card transaction records from the processing company that did not jibe with Hudson's records.
A Dec. 17 meeting was scheduled to figure out the discrepancies. Hudson abruptly resigned five minutes before the meeting, turned off his computer and left.
If you want to avoid appearing completely guilty, that is exactly what you definitely should not do.
Company CEO Craig Maier described Hudson "like every accountant you ever met: boring," which sounds like every other accountant that has ever gotten caught with their hand in the cookie jar. Similarly, Craig Maier sounds like every CEO you've ever met that's been fleeced by an accountant: stupid.
The good news for Frisch's is that this guy was at least kind enough not to mess up the financials while he was robbing them:
Maier says one silver lining is Frisch's doesn't believe it will have to restate it financials or record any charges after preliminary results from its forensic accountants from Deloitte. That's because Hudson already booked most of his alleged theft as expenses.
Had Hudson booked tons of bogus assets, such as buying non-existent equipment expenses, Frisch's would have had to restate financials – potentially triggering months of expensive regulatory review.
To date, Hudson hasn't been charged with any crime.
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