August 5, 2024 • 20 mins
Jim Serpico discusses the prevalence of embezzlement in the restaurant industry, sharing personal anecdotes and industry insights. He highlights various methods of embezzlement, including skimming and creating fraudulent disbursements. Serpico shares stories of individuals, like producer David Ozer and pizza maker Andrew Bellucci, who were involved in financial fraud. He underscores the importance of robust internal controls and vigilance to prevent such crimes. The episode encourages restaurant owners to share their experiences and reinforces the necessity of being proactive against embezzlement.
SHOW NOTES:
00:00 Introduction and Welcome
00:29 Weekend Recap and Episode Introduction
00:43 Embezzlement in the Restaurant Industry
01:05 The David Ozer Story
07:01 Real-Life Embezzlement Cases
12:33 Understanding Embezzlement and Prevention
19:40 Conclusion and Final Thoughts
To get more information about the Unsliced Restaurant System, visit https://getunsliced.com or email Mike@getunsliced.com
Visit Jim Serpico on Instagram at @sidehustlebread
Become a supporter of this podcast: https://www.spreaker.com/podcast/jim-serpico-bread-for-the-people-sourdough-pizza-life--5704379/support.
SHOW NOTES:
00:00 Introduction and Welcome
00:29 Weekend Recap and Episode Introduction
00:43 Embezzlement in the Restaurant Industry
01:05 The David Ozer Story
07:01 Real-Life Embezzlement Cases
12:33 Understanding Embezzlement and Prevention
19:40 Conclusion and Final Thoughts
To get more information about the Unsliced Restaurant System, visit https://getunsliced.com or email Mike@getunsliced.com
Visit Jim Serpico on Instagram at @sidehustlebread
Become a supporter of this podcast: https://www.spreaker.com/podcast/jim-serpico-bread-for-the-people-sourdough-pizza-life--5704379/support.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
My name is Jim Serpico, and this should I start
with my name? What should I start with? This is
bread for the people? Do you like it like this?
Welcome to bread? Or do you like it like this?
Welcome Ready, Welcome to bread for the people? Mine? Is
there a script? All the people? How y'all doing today?
(00:29):
Coming off a great weekend with four events, very successful,
I'm feeling pretty good about how things went, and I'm
ready to dive into today's episode excited about this topic.
I'm going to talk about embezzlement in the restaurant industry.
According to an article I read by Liz Foster in
(00:50):
Restaurant Hospitality, the average business in America loses five percent
of their income to embezzlement. In the restaurant business, there's
hundreds and hundreds of that people could pull off embezzling,
and you'd be surprised by the characters that do it.
I started thinking about this because a friend of mine
sent me an article in Variety, the show business daily
(01:11):
magazine about a guy named David Ozer, who's a producer
that I was working with a few years ago. The
context is I was managing a comedian named Peter Corielly
Pete was a writer on Kevin James sitcom. He also
has a podcast with Sebastian Manascalsko. And he was co
writing a television script with another writer and David Ozer
(01:34):
was the producer. And he worked at a production company
that had a deal with Crackle, and I guess Crackle
is some kind of streaming service that I don't know.
Maybe you heard of it. I think most people haven't.
But anyway, he pays these guys to write the script,
and supposedly Michael Rappaport was attached. Not supposedly, he was
attached to Star. And I was making Corielly's deals on
(01:55):
the project and dealing with Ozer a lot. There would
be rounds of script and Ozer was never really giving
creative notes. He'd be in touch and then he'd disappeared
for a few months, and then suddenly he's leaving Crackle
and he's going somewhere else and he says, I'm going
to get this made as a feature. So now they
got a fifty page television pilot with Michael Rappaport the star,
(02:18):
and he says, we're going to do this as a feature,
and he wants them to rewrite it as a feature. Now,
a feature is very different than a television pilot. I mean,
on the surface, it's another fifty pages, right, and a
minute a page. The average movie is two hours long,
so they have a fifty page script, they need seventy
more pages. It's a completely different structure. It's a completely
(02:39):
different animal. And he's telling these guys we got to
do this. I'm going to get this set for production.
And he's asking them to do it for free, not
that he even asked. He just never brought up the money.
So I, as the manager, come in and say, hey,
what are you paying these guys? And meanwhile I'm on
a conference call with the manager of the other writer.
This manager works for a big management company in corporate
(03:02):
brill Stein. Great. I come on pretty hard with it
because I smell as bullshit. I already went through the
fact that he never reported the writer's earnings to the
writer's guild and they were getting nasty letters from the
writer's Guild threatening their membership, and we had to put
pressure on oser to start reporting the payments made to
the writers, And like, how could you what are you
paying these guys? You got to pay them. This is
(03:23):
like that you paid for a pilot script. Now you
got to do a whole new deal. The other managers
seems to be okay with this plan. Oh, Oser's a
good guy. This is what it's going to take to
get it made. The writers are okay with it. Why
are the writers okay with doing all this free work?
Am I the only fucking crazy person saying this is
not how it works? Looking back on it, I'm the
(03:43):
one with thirty years experience on the writing side, the
producing side, the whole thing. I get a call from
my client saying I heard you came on hard with
Ozer Man. I don't need you fucking this up. And
I'm like, fucking what up, dude, You're not getting paid?
Why would you do this? Okay, things go on. I
end up no longer working with corey Elly. I'm not
sure what happens at the time with this project. Olser
(04:06):
moves once again, and he gets another movie set for production,
And this is what the Variety article was about. He
has now been accused of fabricating invoices and creating fake
vendors for a television series that he was in production on,
and allegedly stole hundreds of thousands of dollars to the
(04:27):
point where the production had to shut down. They didn't
have enough to finish it. When the television series was edited,
the episodes were so short because they didn't finish the
production that it was impossible. They didn't meet the required
standards of minutes in a television series, so it could
never be bought. So the people who invested all this
money into this television series lost at all. This series
(04:52):
will never see the light of day. The script that
my guys wrote never went into production. Olser got free
work out of them. I lost a relationship over me
calling bullshit on it, and listen, I don't wish ill
on anyone except that scumbag David Ozer. When I read
this article of him getting busted made me smile because
(05:13):
I know and knew at the time this guy was
full of shit. All that being said, the restaurant business
is ripe for fraud and stealing. I'm sure you know
of some stories. It happens all the time now. According
to Liz Foster's article, the majority of embezzlers don't set
out to steal from you, and most have never even
(05:36):
committed a crime before. It's most likely to occur in small,
independent restaurants, of which many of you who are listening
to this right now own, and I'm sure you're aware
that this can happen. It may have happened to you.
If it has, I'd like to hear from you. I'd
like to hear some of the stories, if you could
post it on social media. I'd like to know what happened.
I'd like to know what safeguards you have in place
(05:57):
to prevent embezzlement happening at your operation. It's one of
the things we cover in the Unsliced Restaurant Management Group
headed up by Mike Bousch, of which I'm a student,
and in full disclosure, I do receive some money from Unsliced.
If you guys call up and decide to join the
course and tell them that Jim Serpaco from Bread for
(06:19):
the people who recommended you. The only reason I'm doing
this is because I think it's the best investment I
ever made. The skills I have learned about operating and
running on the business side of the restaurant business has
been invaluable to me. So that's the Unsliced Restaurant Group
headed up by Mike Bousch. If you guys are interested
(06:41):
in getting your existing restaurant up to speed using best
practices on every level on how to operate and run
and make things smooth, and learn how to have your
restaurant work for you rather than you be a slave
to your restaurant. Checking with Mike Bouch and unsliced. Now,
there are tons of examples of an impelzment in the
(07:05):
restaurant industry. A recent one just happened in Los Angeles
and it got a lot of coverage. I saw this
on ABC News. There was a Mexican restaurant run by
a guy named Martin del Campo who said that an
employee who was like a brother to him. This guy
worked for him for newly twelve years. He trusted the
(07:27):
guy with the payroll. This employee and general manager used
the identity of sixteen employees to write two checks at
the same time in the same amount every week for
sixteen employees. So if an employee was getting paid five
hundred and fifty dollars, he would write a check to
(07:47):
Joe Smith for five hundred fifty dollars, and he would
write another check to Joe Smith five hundred and fifty dollars.
And he did this time sixteen people. It's thirty two
checks a week. Half the checks, even though they weren't
in his name, he got deposited into his personal account.
And this went on for years to the tune of
(08:09):
fifty thousand dollars, and it almost shut down the restaurant.
But they did catch the guy. He was recently arrested.
There's another famous story about a beloved person in the
pizza industry who I know, I looked up to as
(08:30):
a pizza maker and as a personality. And I had
a little bit of a relationship with this person through
Instagram before he passed away. His name was Andrew Balucci.
I know a lot of Andrew, or know of Baluchiese,
and you probably all know. But if not, I'm going
(08:50):
to tell you he reformed his life. He served a
thirteen month prison sentence and bezzling funds when he was
the office manager at a law firm in the nineteen eighties.
Bualucci forged his partner signatures and fortunately build his firm's
clients for extra hours to the tune of hundreds of
(09:13):
thousands of dollars, and he spent that money freely. He
even threw a party for the law firm without them
realizing he was using their money, and they all partied
their ass off. He takes all that money, spends it
lines his pockets and he goes away to France. Ain't
(09:36):
starts cooking and working at Michelin Star Restaurants or France,
unaware that he was being investigated in New York. And
he comes home and he decides to get into the
pizza business. He's working at Spring Street and two Boots
and Lombardes, where he starts to get some notoriety for
(09:56):
making great pizza. And he spotted in a media piece
by the partners at the law firm, so they know
where he is. They report it to the police, unaware
to Belushi. The Fed show up and they order a
pizza and they sit down, they go up, they tell
them how great it was, and then they arrest them,
(10:18):
and as legend has it, they never paid for the pizza,
which pissed off Belushi. He eventually pled guilty to fifty
four counts of fraud. And get this, he goes to
jail at Otisville Correctional Facility in upstate New York, and
he's sellmate none other than the legendary Moss they's sunny
(10:39):
Friendsese they become great friends, which I think in the
day may have helped Andrew getting some notoriety and spreading
the word. So he's reliefed from prison and he's driving
cabs for sixteen years before he decides to get back
into the pizza business. And then he go to Malaysia
(11:01):
and he built a pizza oven. Well, he was over
there and he's getting back into his old trade and
he comes back to the US and he helps open
a Joe's Pizza in ann Arbor, Michigan. Now my son
goes to a University of Michigan. I've been up there
many times and Joe's Pizza is right on the campus.
(11:22):
There's always a line. It is New York style pizza.
It's pretty good pizza. And I was shocked to find
out that it was Andrew who kicked things off up there.
And if you know anything about the weekends and the
football games over at the University of Michigan, it's nuts,
it's madness. And there was one Saturday where he had
(11:43):
to make five hundred pies in one day and it
was after that he knew. After breaking his back and
standing on his seat for twelve hours that he loved it,
and ever since then Andrew was back in the pizza
game in a big way and never stopped and he
never again. Andrew was a good man. Why did he
originally do that? I can't say for sure why he
(12:08):
did it, but we will discuss why people do put
themselves into the position of stealing from others and embezzling money.
So listen, you own a restaurant, you have to be
aware that this could happen to you, and likely will happen.
It's a matter of whether or not you'll find out,
and it's a matter of whether or not you could
(12:30):
stop them in time from doing real damage. Embezzlement differs
from other types of financial fraud. It's often employee or
someone in a position of trust that illegally takes funds
from you. So it's a trusted person. This perpetrator has
access to funds in your restaurant or your property due
(12:53):
to position that you put them in because you thought
they'd be watching your back. These funds are taking without
your permission, and the act is intentional with the purpose
of depriving you the owner of your assets. There are
some common methods and techniques that people use to embezzle money.
(13:15):
I'll give you some examples. Skimming is a popular method
of embezzlement. Skimming involves the taking of cash or funds
before they're recorded in your company's financial system. For example,
a Real Story restaurant, New York City, one of the
employees was called skimming cash from the daily sale. This
(13:36):
is a common one. Why does this happen because there's
not system controls. Right to my knowledge, it's never happened
to me. I have great employees. Everyone thinks they have
great employees, and like I said earlier, it's usually a
trusted person. For me, we have what we think is
tight controls because we have a very specific inventory of
(13:58):
bread loaves that we give out to our vendors. It's
all written down to the d We know exactly what
our gross financial potential is, and then we have a
system of them taking inventory of what was sold and
exactly what wasn't. So that data helps inform us what
we should bake, how much we should bake more next week,
(14:20):
how much less we should bake if that's the case.
But it also helps us figure out is all the
money in place? Okay? So that's skimming, fraudulent disbursements. It's
a technique that involves the creation of false documents or
manipulation of legitimate ones to authorize and misappropriate funds. This
(14:43):
is what this guy, David Ozer did in the TV
series Scheme. He created fake invoices for vendors that didn't
exist to line his pocket so that he could pay
off the and the outstanding loans on his house because
it turns out his house was in foreclosure at a restaurant.
(15:06):
An example could be an account's payable clerk for signatures
on company checks and making them payable to themselves. The
reimbursement fraud. Somebody could be submitting false expense reports. They
could be taking your car the personal trips and rides
and spending money on gas for their personal use and
(15:27):
wear and tear on the car. What kinds of stuff
that could happen? Now you know, why would somebody embezzle
from you to begin with? That's a tough one, especially
when you thought you knew the person. You never imagine
they would do it. Does it mean the horrible people?
I think if you're the victim of it, without question,
(15:49):
you believe they are. At the same time, they may
have some real struggles going on, some internal struggles. I'm
not saying forgive them, but individuals who face significant personal hardships,
financial hardships like that, and medical expenses, they may see
this as a way to alleviate their financial problems. It
could be lifestyle maintenance. This guy, David Ozer is one
(16:13):
of the few Hollywood producers that live where I live
in Long Island, New York. Lived in a fancy part
of Long Island, the five towns, probably had a fucking McMansion,
and he wanted to make it seem like it was
a big shot. So he was stealing money so you
could live in the fancy part of town and he
could drive the fancy fucking car with the fancy fucking
(16:36):
license plate that said Hollywood Magnet or some shit. And
here's the biggest one in the restaurant business. It's opportunity. Okay, guys.
The presence of weak internal controls, that's a big one. Okay.
There are things that you can do in terms of
internal controls that you really may have to think about.
(16:58):
The easiest one is a good camera system. There are
camera systems for restaurants that link up to your POS
system so that every time your register rings, there's a
notification there are camera systems that allow you to search
(17:19):
certain things. They have amazing search features where you could
type in any activity between this hour and this hour.
The quality of these cameras are amazing and you see
what's going on. You could have some of these cameras hidden,
but another deterrent is make them very visible. Right you
place your camera over the register, people are aware or
(17:40):
in the stoardroom that they are being looked at, or
that you can go back in time and find out
what they took and what they stole. So I can't
speak enough about how important an amazing camera system linked
up to your POS system is. Some people just do
it for the thrill and the challenge, and then there's
the personal data the employees that thinks they've been wronged
(18:02):
by you. It's something to look out for, or the
rationalization they think they deserve more you're getting all the
money because you're the owner. Some people just have a
lack of ethical standards. They grew up cultural influences. This
is my father's friends and him. They grew up in
(18:22):
a part of town that people idolize the mob at
the time, and in that culture, some people thought it
was okay or sense of pride to be able to
pull this off. Mob was notorious for helping and convincing
people to be in on these schemes, and they still
are and they don't see anything wrong with it. They
(18:43):
just see it as a way of life. The one
thing I'll tell you is you'd be surprised by who
the culprits are. You'd be surprised that they are family members,
some of the closest people in your life that you've
trusted and you never thought this could have happen. If
you're the victim of this, you feel betrayed. Financially, it
(19:06):
could wipe you out. It's tough to pay the bills
and it's tough to come back at that point. Who
can you trust If you can't trust that person who's
the closest in your life, I stole money from you.
Back to show business, there are so many comedians who
were managed by their brother or their sister who ended
up stealing their money. I know that Dane Cook, who
(19:30):
is a friend of mine, was a victim of embezzlement
from his brother. I mean, wipe this guy out. In
the height of his fame of millions and millions of dollars.
It's a reality, folks. I just wanted to cover embezzlement.
I hope you found this informative. Be on the lookout,
be vigilant, stay on top of your shit, have strong
(19:53):
internal controls, and think it out because it's important. Have
a good day, everybody,
My name is Jim Serpico, and this should I start
with my name? What should I start with? This is
bread for the people? Do you like it like this?
Welcome to bread? Or do you like it like this?
Welcome Ready, Welcome to bread for the people? Mine? Is
there a script? All the people? How y'all doing today?
(00:29):
Coming off a great weekend with four events, very successful,
I'm feeling pretty good about how things went, and I'm
ready to dive into today's episode excited about this topic.
I'm going to talk about embezzlement in the restaurant industry.
According to an article I read by Liz Foster in
(00:50):
Restaurant Hospitality, the average business in America loses five percent
of their income to embezzlement. In the restaurant business, there's
hundreds and hundreds of that people could pull off embezzling,
and you'd be surprised by the characters that do it.
I started thinking about this because a friend of mine
sent me an article in Variety, the show business daily
(01:11):
magazine about a guy named David Ozer, who's a producer
that I was working with a few years ago. The
context is I was managing a comedian named Peter Corielly
Pete was a writer on Kevin James sitcom. He also
has a podcast with Sebastian Manascalsko. And he was co
writing a television script with another writer and David Ozer
(01:34):
was the producer. And he worked at a production company
that had a deal with Crackle, and I guess Crackle
is some kind of streaming service that I don't know.
Maybe you heard of it. I think most people haven't.
But anyway, he pays these guys to write the script,
and supposedly Michael Rappaport was attached. Not supposedly, he was
attached to Star. And I was making Corielly's deals on
(01:55):
the project and dealing with Ozer a lot. There would
be rounds of script and Ozer was never really giving
creative notes. He'd be in touch and then he'd disappeared
for a few months, and then suddenly he's leaving Crackle
and he's going somewhere else and he says, I'm going
to get this made as a feature. So now they
got a fifty page television pilot with Michael Rappaport the star,
(02:18):
and he says, we're going to do this as a feature,
and he wants them to rewrite it as a feature. Now,
a feature is very different than a television pilot. I mean,
on the surface, it's another fifty pages, right, and a
minute a page. The average movie is two hours long,
so they have a fifty page script, they need seventy
more pages. It's a completely different structure. It's a completely
(02:39):
different animal. And he's telling these guys we got to
do this. I'm going to get this set for production.
And he's asking them to do it for free, not
that he even asked. He just never brought up the money.
So I, as the manager, come in and say, hey,
what are you paying these guys? And meanwhile I'm on
a conference call with the manager of the other writer.
This manager works for a big management company in corporate
(03:02):
brill Stein. Great. I come on pretty hard with it
because I smell as bullshit. I already went through the
fact that he never reported the writer's earnings to the
writer's guild and they were getting nasty letters from the
writer's Guild threatening their membership, and we had to put
pressure on oser to start reporting the payments made to
the writers, And like, how could you what are you
paying these guys? You got to pay them. This is
(03:23):
like that you paid for a pilot script. Now you
got to do a whole new deal. The other managers
seems to be okay with this plan. Oh, Oser's a
good guy. This is what it's going to take to
get it made. The writers are okay with it. Why
are the writers okay with doing all this free work?
Am I the only fucking crazy person saying this is
not how it works? Looking back on it, I'm the
(03:43):
one with thirty years experience on the writing side, the
producing side, the whole thing. I get a call from
my client saying I heard you came on hard with
Ozer Man. I don't need you fucking this up. And
I'm like, fucking what up, dude, You're not getting paid?
Why would you do this? Okay, things go on. I
end up no longer working with corey Elly. I'm not
sure what happens at the time with this project. Olser
(04:06):
moves once again, and he gets another movie set for production,
And this is what the Variety article was about. He
has now been accused of fabricating invoices and creating fake
vendors for a television series that he was in production on,
and allegedly stole hundreds of thousands of dollars to the
(04:27):
point where the production had to shut down. They didn't
have enough to finish it. When the television series was edited,
the episodes were so short because they didn't finish the
production that it was impossible. They didn't meet the required
standards of minutes in a television series, so it could
never be bought. So the people who invested all this
money into this television series lost at all. This series
(04:52):
will never see the light of day. The script that
my guys wrote never went into production. Olser got free
work out of them. I lost a relationship over me
calling bullshit on it, and listen, I don't wish ill
on anyone except that scumbag David Ozer. When I read
this article of him getting busted made me smile because
(05:13):
I know and knew at the time this guy was
full of shit. All that being said, the restaurant business
is ripe for fraud and stealing. I'm sure you know
of some stories. It happens all the time now. According
to Liz Foster's article, the majority of embezzlers don't set
out to steal from you, and most have never even
(05:36):
committed a crime before. It's most likely to occur in small,
independent restaurants, of which many of you who are listening
to this right now own, and I'm sure you're aware
that this can happen. It may have happened to you.
If it has, I'd like to hear from you. I'd
like to hear some of the stories, if you could
post it on social media. I'd like to know what happened.
I'd like to know what safeguards you have in place
(05:57):
to prevent embezzlement happening at your operation. It's one of
the things we cover in the Unsliced Restaurant Management Group
headed up by Mike Bousch, of which I'm a student,
and in full disclosure, I do receive some money from Unsliced.
If you guys call up and decide to join the
course and tell them that Jim Serpaco from Bread for
(06:19):
the people who recommended you. The only reason I'm doing
this is because I think it's the best investment I
ever made. The skills I have learned about operating and
running on the business side of the restaurant business has
been invaluable to me. So that's the Unsliced Restaurant Group
headed up by Mike Bousch. If you guys are interested
(06:41):
in getting your existing restaurant up to speed using best
practices on every level on how to operate and run
and make things smooth, and learn how to have your
restaurant work for you rather than you be a slave
to your restaurant. Checking with Mike Bouch and unsliced. Now,
there are tons of examples of an impelzment in the
(07:05):
restaurant industry. A recent one just happened in Los Angeles
and it got a lot of coverage. I saw this
on ABC News. There was a Mexican restaurant run by
a guy named Martin del Campo who said that an
employee who was like a brother to him. This guy
worked for him for newly twelve years. He trusted the
(07:27):
guy with the payroll. This employee and general manager used
the identity of sixteen employees to write two checks at
the same time in the same amount every week for
sixteen employees. So if an employee was getting paid five
hundred and fifty dollars, he would write a check to
(07:47):
Joe Smith for five hundred fifty dollars, and he would
write another check to Joe Smith five hundred and fifty dollars.
And he did this time sixteen people. It's thirty two
checks a week. Half the checks, even though they weren't
in his name, he got deposited into his personal account.
And this went on for years to the tune of
(08:09):
fifty thousand dollars, and it almost shut down the restaurant.
But they did catch the guy. He was recently arrested.
There's another famous story about a beloved person in the
pizza industry who I know, I looked up to as
(08:30):
a pizza maker and as a personality. And I had
a little bit of a relationship with this person through
Instagram before he passed away. His name was Andrew Balucci.
I know a lot of Andrew, or know of Baluchiese,
and you probably all know. But if not, I'm going
(08:50):
to tell you he reformed his life. He served a
thirteen month prison sentence and bezzling funds when he was
the office manager at a law firm in the nineteen eighties.
Bualucci forged his partner signatures and fortunately build his firm's
clients for extra hours to the tune of hundreds of
(09:13):
thousands of dollars, and he spent that money freely. He
even threw a party for the law firm without them
realizing he was using their money, and they all partied
their ass off. He takes all that money, spends it
lines his pockets and he goes away to France. Ain't
(09:36):
starts cooking and working at Michelin Star Restaurants or France,
unaware that he was being investigated in New York. And
he comes home and he decides to get into the
pizza business. He's working at Spring Street and two Boots
and Lombardes, where he starts to get some notoriety for
(09:56):
making great pizza. And he spotted in a media piece
by the partners at the law firm, so they know
where he is. They report it to the police, unaware
to Belushi. The Fed show up and they order a
pizza and they sit down, they go up, they tell
them how great it was, and then they arrest them,
(10:18):
and as legend has it, they never paid for the pizza,
which pissed off Belushi. He eventually pled guilty to fifty
four counts of fraud. And get this, he goes to
jail at Otisville Correctional Facility in upstate New York, and
he's sellmate none other than the legendary Moss they's sunny
(10:39):
Friendsese they become great friends, which I think in the
day may have helped Andrew getting some notoriety and spreading
the word. So he's reliefed from prison and he's driving
cabs for sixteen years before he decides to get back
into the pizza business. And then he go to Malaysia
(11:01):
and he built a pizza oven. Well, he was over
there and he's getting back into his old trade and
he comes back to the US and he helps open
a Joe's Pizza in ann Arbor, Michigan. Now my son
goes to a University of Michigan. I've been up there
many times and Joe's Pizza is right on the campus.
(11:22):
There's always a line. It is New York style pizza.
It's pretty good pizza. And I was shocked to find
out that it was Andrew who kicked things off up there.
And if you know anything about the weekends and the
football games over at the University of Michigan, it's nuts,
it's madness. And there was one Saturday where he had
(11:43):
to make five hundred pies in one day and it
was after that he knew. After breaking his back and
standing on his seat for twelve hours that he loved it,
and ever since then Andrew was back in the pizza
game in a big way and never stopped and he
never again. Andrew was a good man. Why did he
originally do that? I can't say for sure why he
(12:08):
did it, but we will discuss why people do put
themselves into the position of stealing from others and embezzling money.
So listen, you own a restaurant, you have to be
aware that this could happen to you, and likely will happen.
It's a matter of whether or not you'll find out,
and it's a matter of whether or not you could
(12:30):
stop them in time from doing real damage. Embezzlement differs
from other types of financial fraud. It's often employee or
someone in a position of trust that illegally takes funds
from you. So it's a trusted person. This perpetrator has
access to funds in your restaurant or your property due
(12:53):
to position that you put them in because you thought
they'd be watching your back. These funds are taking without
your permission, and the act is intentional with the purpose
of depriving you the owner of your assets. There are
some common methods and techniques that people use to embezzle money.
(13:15):
I'll give you some examples. Skimming is a popular method
of embezzlement. Skimming involves the taking of cash or funds
before they're recorded in your company's financial system. For example,
a Real Story restaurant, New York City, one of the
employees was called skimming cash from the daily sale. This
(13:36):
is a common one. Why does this happen because there's
not system controls. Right to my knowledge, it's never happened
to me. I have great employees. Everyone thinks they have
great employees, and like I said earlier, it's usually a
trusted person. For me, we have what we think is
tight controls because we have a very specific inventory of
(13:58):
bread loaves that we give out to our vendors. It's
all written down to the d We know exactly what
our gross financial potential is, and then we have a
system of them taking inventory of what was sold and
exactly what wasn't. So that data helps inform us what
we should bake, how much we should bake more next week,
(14:20):
how much less we should bake if that's the case.
But it also helps us figure out is all the
money in place? Okay? So that's skimming, fraudulent disbursements. It's
a technique that involves the creation of false documents or
manipulation of legitimate ones to authorize and misappropriate funds. This
(14:43):
is what this guy, David Ozer did in the TV
series Scheme. He created fake invoices for vendors that didn't
exist to line his pocket so that he could pay
off the and the outstanding loans on his house because
it turns out his house was in foreclosure at a restaurant.
(15:06):
An example could be an account's payable clerk for signatures
on company checks and making them payable to themselves. The
reimbursement fraud. Somebody could be submitting false expense reports. They
could be taking your car the personal trips and rides
and spending money on gas for their personal use and
(15:27):
wear and tear on the car. What kinds of stuff
that could happen? Now you know, why would somebody embezzle
from you to begin with? That's a tough one, especially
when you thought you knew the person. You never imagine
they would do it. Does it mean the horrible people?
I think if you're the victim of it, without question,
(15:49):
you believe they are. At the same time, they may
have some real struggles going on, some internal struggles. I'm
not saying forgive them, but individuals who face significant personal hardships,
financial hardships like that, and medical expenses, they may see
this as a way to alleviate their financial problems. It
could be lifestyle maintenance. This guy, David Ozer is one
(16:13):
of the few Hollywood producers that live where I live
in Long Island, New York. Lived in a fancy part
of Long Island, the five towns, probably had a fucking McMansion,
and he wanted to make it seem like it was
a big shot. So he was stealing money so you
could live in the fancy part of town and he
could drive the fancy fucking car with the fancy fucking
(16:36):
license plate that said Hollywood Magnet or some shit. And
here's the biggest one in the restaurant business. It's opportunity. Okay, guys.
The presence of weak internal controls, that's a big one. Okay.
There are things that you can do in terms of
internal controls that you really may have to think about.
(16:58):
The easiest one is a good camera system. There are
camera systems for restaurants that link up to your POS
system so that every time your register rings, there's a
notification there are camera systems that allow you to search
(17:19):
certain things. They have amazing search features where you could
type in any activity between this hour and this hour.
The quality of these cameras are amazing and you see
what's going on. You could have some of these cameras hidden,
but another deterrent is make them very visible. Right you
place your camera over the register, people are aware or
(17:40):
in the stoardroom that they are being looked at, or
that you can go back in time and find out
what they took and what they stole. So I can't
speak enough about how important an amazing camera system linked
up to your POS system is. Some people just do
it for the thrill and the challenge, and then there's
the personal data the employees that thinks they've been wronged
(18:02):
by you. It's something to look out for, or the
rationalization they think they deserve more you're getting all the
money because you're the owner. Some people just have a
lack of ethical standards. They grew up cultural influences. This
is my father's friends and him. They grew up in
(18:22):
a part of town that people idolize the mob at
the time, and in that culture, some people thought it
was okay or sense of pride to be able to
pull this off. Mob was notorious for helping and convincing
people to be in on these schemes, and they still
are and they don't see anything wrong with it. They
(18:43):
just see it as a way of life. The one
thing I'll tell you is you'd be surprised by who
the culprits are. You'd be surprised that they are family members,
some of the closest people in your life that you've
trusted and you never thought this could have happen. If
you're the victim of this, you feel betrayed. Financially, it
(19:06):
could wipe you out. It's tough to pay the bills
and it's tough to come back at that point. Who
can you trust If you can't trust that person who's
the closest in your life, I stole money from you.
Back to show business, there are so many comedians who
were managed by their brother or their sister who ended
up stealing their money. I know that Dane Cook, who
(19:30):
is a friend of mine, was a victim of embezzlement
from his brother. I mean, wipe this guy out. In
the height of his fame of millions and millions of dollars.
It's a reality, folks. I just wanted to cover embezzlement.
I hope you found this informative. Be on the lookout,
be vigilant, stay on top of your shit, have strong
(19:53):
internal controls, and think it out because it's important. Have
a good day, everybody,
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