Dave & Adam's Theft

Holy cow, how awful!

YIKES! $1.3M, really? That's just crazy, goes to show businesses really need help with inventory management systems and strong review of collections/receipts practices.

Here's some more information on the case:

Posted elsewhere online:

It was a computer software flaw that, in the words of the business’ co-owner, turned into “a license to steal” for three employees who took baseball, football and hockey trading cards worth $1.3 million. The $1.3 million represents the retail value of the boxes of cards the three employees stole and does not include any money they made from selling the most valuable of the cards on eBay.

The three who worked at Dave and Adam’s Card World exploited the flaw that let them buy a single box of sports trading cards on a credit card and then purchase additional boxes without being charged.

“They could have been human beings and told us about it, but instead they decided to become criminals,” said Adam Martin, co-owner of the Town of Tonawanda-based trading card company. "If they had come forward and told the company about the flaw, they would have received big bonuses", he said.

But now they face up to 15 years in prison. The three men – Aaron Hollars, 31, of West Seneca; Anthony Martone, 30, of Amherst; and David Woods, 25, of Williamsville – pleaded guilty to second-degree grand larceny this week in Erie County Court, according to District Attorney Frank A. Sedita III.

The trading card company, which started in 1991, will survive thanks to its online sales, Martin said. “If we had only our retail stores, this would have bankrupted us,” Martin said.

But the losses have set back the company. Six employees were laid off. And holiday bonuses the company gives its nearly 70 employees will not be as big.

“These three employees did this without considering how it would affect other employees,” Martin said.

The crime happened over an 18-month period between January 2013 and this July, prosecutors said. The three offenders worked as managers or assistant managers, rotating among the company’s four retail stores in Clarence, the Town of Tonawanda, Orchard Park and Niagara Falls. Hollars discovered the flaw that allowed him to buy a single box of sports trading cards on his credit card, then purchase additional boxes without being charged.

“He decided it was a license to steal,” Martin said.

Hollars told the two others about the flaw one night while they were out drinking, Martin said. All of the stolen boxes contained sports trading cards, mostly of baseball, football and hockey players. Hollars stole more than $800,000 in cards, while Martone got more than $100,000, and Woods collected more than $400,000, prosecutors said.

“It’s very discouraging,” Martin said. “They were close to us. We treated them well.”

Martin said he does not know how many cards the suspects sold on eBay or how much money they obtained from those sales. The theft was discovered earlier this summer when company officials noticed that the amount of money they should have received from credit card sales fell far short of what they got, resulting in losses. The three are scheduled to be sentenced Jan. 8 by Erie County Judge Kenneth F. Case.

These were people of "responsibility" so it was easier to have this happen.

In my business - it's easy to embezzle - if one isn't vigilant.

Cash is easier to steal - by manipulating the books.

There has to be a close tie/oversight between sales and sales adjustments and in the case of D&A, the "inventory," going forward.

Otherwise, it's just too easy to "buy one and get 2 free?"

Dave & Adams are an asset to our hobby. How about sending them an order if you need something, mines going out today ...

To me in an instance like this, the assets of the people who did the stealing should be sold and the proceeds of which go to repay whatever was stolen and could not be recovered. That means any house, car, jewelry, retirement, etc

It was hard for me to focus on the content of that article, as it is written so poorly.

<< <i>Dave & Adams are an asset to our hobby. How about sending them an order if you need something, mines going out today ... >>



Agreed!!!! Especially black friday sales. Gives me something to do when hanging with the inlaws and digesting 6K worth of calories.

Wow. I have purchased from Dave and Adam's Card World in the past. It is a great company. What a shame.

<< <i>

<< <i>I'm curious how that much inventory was stolen without an red flags being raised, over a million dollars? That's insane, either way hopefully they recover. I've never done business with them but have heard of them a buch of times >>




I'm wondering the same thing as I read it. It's not like we're talking about Microsoft here. I have to believe that ~$100K per month is A LOT for that kind of a business. What kind of half ass bookkeeper do they have that this wasn't brought to light and that credit card statements aren't being reconciled at least to within material levels. While I feel bad for them, on some level, they really only have themselves to blame. >>



I'd say the monthly inventories between the multiple brick& mortar sites along with their mail order warehouse(if it exists) was what was being manipulated while it was happening, for them to get away with it. All of them were managers of some type.

<< <i>who owns a business of that size and doesn't bother to carry theft insurance? that's the most bonkers part of this whole story imo. >>



+1

if that's true, then why is it that "Because of them, five people lost their jobs, we had to cut because of the loss, we had to cut expenses, people with families aren't going to get bonuses," Martin added.

now i'm no big city lawyer, but miklia confuse.

<< <i>

<< <i>who owns a business of that size and doesn't bother to carry theft insurance? that's the most bonkers part of this whole story imo. >>



it wouldn't be theft insurance, since theft by employees is generally excluded on most policies. they would have needed an rider called "employee dishnoesty" which relatively very few businesses carry since they all mistakenly think they all have honest employees.

IMF >>



or, perhaps even more likely, assume that this type of theft would also be covered. sounds like a lost cause claim then. what a shame.

<< <i>

<< <i>I'm curious how that much inventory was stolen without an red flags being raised, over a million dollars? That's insane, either way hopefully they recover. I've never done business with them but have heard of them a buch of times >>




I'm wondering the same thing as I read it. It's not like we're talking about Microsoft here. I have to believe that ~$100K per month is A LOT for that kind of a business. What kind of half ass bookkeeper do they have that this wasn't brought to light and that credit card statements aren't being reconciled at least to within material levels. While I feel bad for them, on some level, they really only have themselves to blame. >>



this.

<< <i>if that's true, then why is it that "Because of them, five people lost their jobs, we had to cut because of the loss, we had to cut expenses, people with families aren't going to get bonuses," Martin added.

now i'm no big city lawyer, but miklia confuse. >>



The way I read it was that five people already lost their jobs because the business was struggling (because of the thefts) and they cut expenses (because they thought they were losing money) and people aren't getting bonus' (because they now realize someone stolen $1.3 million from them).

Hopefully miklia isn't confuse anymore.

<< <i>Most likely scenario, he is angry and is and will be taking it out on those still under his employ. I can see him doing that. He's not the nicest guy in the world.

Wow, the company gets $1.3 million in retail value of their inventory stolen, and you malign the character of one of the owners? Do you have a personal axe to grind? >>



Have you met him?

I hereby sentence you, Michael Bolton... And Samir naan-- Nanadajibad... To a term of no less than 4 years in a federal "pound me in the ass" prison (and restitution)

Text

<< <i>To me in an instance like this, the assets of the people who did the stealing should be sold and the proceeds of which go to repay whatever was stolen and could not be recovered. That means any house, car, jewelry, retirement, etc >>


Agree 100%

I saw part of the sentencing includes full restitution. I wonder how much of that D&A will ever see?

IMF

<< <i>I always find it interesting how often very normal people seem to consider rapes a fair consequence for criminal acts . I am sure it is because the person making the comment

a) didn't think about it very much before saying it
b.) has never been victimized in a similar manner >>



Amen!

Were Dave and Adam that out of touch with their business or were they just completely fooled by people they thought they could trust to run the business?
I would love to know how they pulled this off without the owners noticing a Mil going out the door.