A former CVS employee has pleaded guilty to fraud after an internal audit, triggered by suspicious activity, uncovered a $2.5 million scam to resell stolen merchandise, the U.S. Attorney’s Office for the Western District of New York announced last week.
The perpetrator, Antonio Rivera of Williamsville, NY, was employed as a senior assistant purchasing associate for CVS Pharmacy. The position required Rivera to order a variety of retail products sold by CVS, including diabetic test strips.
In July, 2018, CVS’s internal systems flagged the purchasing of such strips at a CVS located in Rochester, NY, after a package located in the store’s shipping area did not have a CVS label, included Rivera’s return address, and came from a company with which CVS did not do business. A subsequent internal audit by CVS determined that Rivera routinely purchased diabetic test strips in excessive amounts, well over the need for that CVS location. The audit could not account for more than 20,000 boxes purchased by Rivera, for a total financial loss of approximately $2.5 million.
The defendant ordered the excessive amounts of diabetic test strips and then intercepted the shipments once they arrived. He then sold the stolen products to a third party located in Florida. A forensic accounting of Rivera’s bank accounts identified payments for the fraudulently obtained diabetic test strips that were deposited into the defendant’s bank accounts.
A ‘Brazen’ Fraud
“Maybe better internal controls would stem the volume of fraud and theft and would be more cost effective for CVS in the long-run,” noted Hal Garyn, president of Audit Executive Advisory Services, an internal audit and risk management consulting firm.
“While business owners hate to think that their employees would steal from them, employee theft is, unfortunately, not that uncommon,” stated U.S. Attorney James P. Kennedy Jr., who announced the plea. “What does stand out in this instance, however, is the brazenness and extent of the fraud.”
The charge carries a maximum sentence of 20 years in prison, prosecutors said. Sentencing is scheduled for October 30, 2019. 
These type of frauds are common in SMEs where owners save money by not introducing the following in their business working environment:
1. Internal control backed accounting systems;
2. Internal audit net work
3. Costing system even in retail business – for local and imported items.
4. Hiring employees in hurry without knowing his / her family background and integrity.