Double Crossed

What Are Risk Scenarios?

Each Risk Scenario consists of two parts — The Scenario and The Analysis.

Part 1: The Scenario (15 minutes) Read The Scenario and answer integrated poll questions that solicit your approach or feedback to the situation. The Scenario is based on hypothetical situations that showcase emerging risks.

Part 2: The Analysis Review key themes in the Summary, access relevant articles and resources, learn about existing products and discuss the scenario with other participants.

Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.

Heddy Phelps and his best friend, Peter Longo, hit the top of Heartbreak Hill as they always did, practically in tandem. Their thighs were burning from the exertion of pedaling their sleek Italian racing bicycles up the four-mile incline that rose 900 feet in elevation into the California foothills.

Then came the sweeping S-curves of the long downhill along the banks of Lake Petri. This is where both men geared back up, and really leaned into their handlebars, racing each other as they always did.

Soon they arrived at, “Dotty’s Place” the old timey lakeside café where they traditionally took a break. On this day, Heddy, the CEO of the Sunburst Solar Cell Company, felt like he didn’t have a care in the world. The endorphins from the ride were coursing through him, his business was doing well and the sun on his face felt great.

Peter, the company’s head of business development, was lying down on a bench on the next picnic table over, closing his eyes and taking in the sun.

Heddy’s cell phone chirped and he reluctantly fished it out of the little bag that was strapped to the back of his cycling seat. The call had to be important. It was Roger Hambleton, the company’s CFO.

“Heddy, it’s Roger.”

“Hey, what’s up?”

“You guys out on your bikes?”

“Yep, resting now but we’re out here.”

“You and Peter?”

“Yeah, me and Peter,” Heddy said, almost impatient with the question. It was always him and Peter. They always rode together. Why was Roger suddenly getting stupid on him?

“Heddy, I really don’t know how to tell you this, but I got a call today from one of the audit committee members on the board of directors. They’d been called by somebody anonymously, probably someone in accounting. I spent all morning looking into this and it looks like we might have a bit of a problem, a fraud problem.”

Heddy paused, was on the verge of telling Peter, but checked himself.

“How much of a problem?”

“It could be a million and I think Peter and Sarah Goodwood’s handprints are all over it,” Roger said. “They’ve been….seeing each other, apparently,” Roger said, putting it as delicately as he could.

The pit of Heddy’s stomach turned cold, like he’d just drunk a couple pints of ice water. His hand trembled.

“No way you can talk about this now but as soon as you get out of ear shot of Peter, you better call me,” Roger said.

“How sure are you?” Heddy said, trying to hide the anger rising up inside him. His hand wouldn’t stop shaking.

Peter, in addition to being Heddy’s friend, had been his employee for 12 years. Now a big piece of Heddy’s world was crumbling.

“I’m pretty sure Heddy, I’m pretty sure,” Roger said.

Heddy hung up. He was a competitor who lived on the edge and stayed in great shape. He didn’t have much of an off button.

He felt a compulsion to stand up and cave in Peter’s head with the reinforced instep of his riding shoe. But he stifled the impulse.

Peter got up and got ready to get on his bike.

“You coming?” Peter said.

To buy time, Heddy looked down at his cell phone, even though no one had called or text-messaged him.

“Crap, I’ve got to take this. Go ahead and ride easy, I’ll catch up,” Heddy said.

“Okay,” Peter said and pedaled off.

As soon as Peter was out of earshot, Heddy called back his CFO and got the details on Peter’s elaborate scam to syphon increasing amounts of money into a private bank account over time.

Then he called his firm’s outside counsel and told him about his desire to fire Peter on the spot.

“I wouldn’t fire him yet if I were you,” the attorney said. “Might complicate things.”

“Really?” Heddy said.

“Really,” the attorney said. “I’d call the attorney general before I’d fire him.”

“Hmmm,” Heddy said. “Thanks. I’ll get back to you.”

To say that Heddy couldn’t think straight would be an understatement. He took off on his bike after Peter.

Heddy respected his attorney, but the further along he biked, the madder he got. When he saw Peter starting to load his bike on to his car, Heddy lost control.

“You’re fired!” Heddy said, pushing Peter to the ground.

Before Peter could react, Heddy had picked up Peter’s expensive racing bike and begun smashing it pedal first into the back window of Peter’s sport-utility vehicle. Heddy kept smashing and smashing the bike into the car as he yelled.

“Roger…(smash) just called me and told me you and Sarah (smash) ripped off the company (smash) for about a million you (smash) traitor!”

Peter was too scared to stop Heddy. After the bike and window were destroyed, Heddy just walked away from Peter. Peter eventually gathered himself up and drove his damaged car away.

Does your company have a written action plan for cases of suspected internal fraud?

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