"If you work for a living, why do you kill yourself working?”
“Tuco”, in The Good, The Bad, and The Ugly
If you’re a fan of western movies and Clint Eastwood, you’ll be familiar with “The Good, The Bad, and The Ugly”. It’s often cited as one of the best westerns, ever, and features some great fictional characters from the American “old west” (we’ll ignore that it was primarily filmed in Spain).
“Tuco”, played by Eli Wallach, is a liar, a thief, a killer, and probably has various other undesirable characteristics, as well (questionable personal hygiene and poor table manners among them).He is heavily invested in getting rich without actually earning his money.
Tuco muses aloud in a scene in which he is plucking a dead chicken's feathers, wondering why anyone would work so hard and put their own lives in danger to earn a living. That reflects his personality; instead of working hard to scrape out a living, Tuco resorts to crime to get rich quick.
Unfortunately, theft is a very real occurrence in the workplace, as well. I’ve encountered a dozen or so of these situations over the years, and I’m often amazed at how ingenious employees’ theft schemes can be.
B.A. Blacktop v. Fazio – A Glaring Example of Workplace Theft
Domenica Fazio was a payroll administrator/supervisor with B.A. Blacktop until she resigned from her employment in August, 2021.Shortly after her departure, her employer commenced an internal investigation into various discrepancies in its payroll records - including with the CRA monthly and annual accounts - which could not be reconciled.
The employer’s investigation led to the discovery that Ms. Fazio had been using her knowledge of their computerized payroll system to systematically defraud them of significant sums. B.A. Blacktop ended up suing Ms. Fazio for fraud, conversion, and deceit, seeking damages of $1,923,820.74 plus interest, punitive damages, and special costs. Yes, that’s over $1.9 million.
Very quickly B.A. Blacktop obtained an injunction freezing Ms. Fazio’s assets. Alas, as it would turn out, they were too late.
B.A. Blacktop provided evidence via a forensic accountant, who identified some 885 unauthorized payments initiated by Ms. Fazio through her employer’s payroll system, totaling over $1.9 million, which she deposited into 19 separate bank accounts at 4 separate financial institutions.
The Court’s decision cited Ms. Fazio’s “modus operandi” as follows.
"a) First, she would secretly select current and past employees of the plaintiffs at random and change the payroll direct deposit bank account information from the employees’ bank accounts to bank accounts owned and controlled by her;
b) Second, she would create fictitious payment proposals that induced the plaintiffs’ computer payroll system to pay unauthorized employee wages that were not owing directly to her own bank accounts;
c) Third, she would create payment instruction text files based on the payment proposals and upload them to the plaintiffs’ online banking platform, which automatically instructed the plaintiffs’ banks to make the unauthorized payments to one of her 19 bank accounts; and
d) Finally, she would in many cases reverse the bank account information in the employee master file back to the original and correct bank account for that employee after the unauthorized payment had been made.”
The Court’s decision was succinct.
" The extensive materials filed by the plaintiffs, combined with Mr. Williams' forensic accounting expert report and supplemented by counsel's able submissions, paint an overwhelming case of fraud, misappropriation, conversion and deceit against Ms. Fazio. It serves no purpose to recite the numerous examples of where Ms. Fazio routinely, deliberately, and with obvious premeditation helped herself to over $1.9 million of the plaintiffs’ money while working as a trusted payroll supervisor. It is beyond doubt that her actions were planned and deliberate.
 Simply put, while in a position of trust, Ms. Fazio perpetrated a deliberate, methodical, and exploitative fraud on the plaintiffs by using her knowledge and expertise as a payroll administrator and payroll supervisor to transfer large sums of moneys over six years into bank accounts she owned and controlled. Either the same day or soon thereafter, she transferred the funds from her accounts to other accounts or put them to other uses.”
The ”good” of this tale is that Ms. Fazio was ultimately caught. The “bad” is that she wasn’t caught until she had stolen over $1.9 million of her employer’s funds. The “ugly” is that, by the time she was held accountable at trial, the money was all gone.
" … Ms. Fazio effectively admitted the fraud. She says she developed a gambling addiction and gambled all of the money away to an online gambling portal. She says she is now without assets or income and in poor health."
As a result of her actions, the Court tacked on another $100,000 in punitive damages, plus interest and special costs.
Like Tuco, Ms. Fazio’s ultimate fate isn’t entirely clear. Likely, her former employer will hound her to recover some of the money she stole.
In the meantime, B.A. Blacktop has surely learned an expensive lesson about placing too much faith in one person. There’s nothing like an external audit, conducted by professionals and performed at regular intervals, to detect a missing million or two in funds.
For more information on this decision, I can recommend the article (“Asking The Fox To Guard The Chicken Coop”) by my friends Michael Weiler and Chris Drinovz of KSW Lawyers…
This item is provided for general information purposes only and is not intended to be relied upon as legal advice. Informed legal advice should always be obtained about your specific circumstances.