Case 5-1 David L. Miller:
Portrait of a White-Collar Criminal
There is an old saying: Crime doesn’t pay. However, for David
Miller crime paid for two Mercedes-Benz sedans; a lavish suburban home; a
condominium at Myrtle Beach; expensive suits; tailored and monogrammed shirts;
diamond, sapphire, ruby, and emerald rings for his wife; and a new car for his
father-in-law. Though Miller confessed to embezzling funds from six different
employers over a 20-year period, he has never been prosecuted or incarcerated—in
large part because his employers never turned him in.
Miller was fired from his first employer for stealing $200.
After an assortment of odd jobs, he worked as an accountant for a local baker.
Miller was caught embezzling funds and paid back the $1,000 he stole. Again,
law enforcement was not notified, and he was quietly dismissed.
Several months after Miller started work at Wheeling Bronze, his
third victim, the president discovered a $30,000 cash shortfall and several
missing returned checks. An extensive search found the canceled checks, with
forged signatures, in an outdoor sand pile. Miller confessed to the scheme and
was given the choice of repaying the stolen funds or being prosecuted. When
Miller’s parents mortgaged their home and repaid the stolen money, he escaped
Miller’s fourth victim was Robinson Pipe Cleaning. When Miller
was caught embezzling funds, he again avoided prosecution by promising to repay
the $20,000 he stole.
Miller’s fifth victim was Crest Industries, where he worked as
accountant. He was an ideal employee—dedicated and hard working, doing
outstanding work. He was quickly promoted to office manager and soon purchased
a new home, car, and wardrobe. Two years later, Crest auditors discovered that
$31,000 was missing. Miller had written several checks to himself, recorded
them as payments to suppliers, and intercepted and altered the monthly bank
statements. With the stolen money, he financed his lifestyle and repaid Wheeling
Bronze and Robinson Pipe Cleaning. Once again, Miller tearfully confessed,
claiming he had never embezzled funds previously. Miller showed so much remorse
that Crest hired a lawyer for him. He promised to repay the stolen money, gave
Crest a lien on his house, and was quietly dismissed. Because Crest management
did not want to harm Miller’s wife and three children, Crest never pressed
Miller’s sixth victim was Rustcraft Broadcasting Company. When
Rustcraft was acquired by Associated Communications, Miller moved to Pittsburgh
to become Associated’s new controller. Miller immediately began dipping into
Associated’s accounts. Over a six-year period, Miller embezzled $1.36 million,
$450,000 of that after he was promoted to CFO. Miller circumvented the need for
two signatures on checks by asking executives leaving on vacation to sign
several checks “just in case” the company needed to disburse funds while he was
gone. Miller used the checks to siphon funds to his personal account. To cover
the theft, Miller removed the canceled check from the bank reconciliation and
destroyed it. The stolen amount was charged to a unit’s expense account to
balance the company’s books.
While working at Associated, Miller bought a new house, new
cars, a vacation home, and an extravagant wardrobe. He was generous with tips
and gifts. His $130,000 salary could not have supported this lifestyle, yet no
one at Associated questioned the source of his conspicuous consumption.
Miller’s lifestyle came crashing down while he was on vacation and the bank
called to inquire about a check written to Miller. Miller confessed and, as
part of his out-of-court settlement, Associated received most of Miller’s
Miller cannot explain why he was never prosecuted. His
insistence that he was going to pay his victims back usually satisfied his
employers and got him off the hook. He believes these agreements actually
contributed to his subsequent thefts; one rationalization for stealing from a
new employer was to pay back the former one. Miller believes his theft problem
is an illness, like alcoholism or compulsive gambling, that is driven by a
subconscious need to be admired and liked by others. He thought that by
spending money, others would like him. Ironically, he was universally well
liked and admired at each job, for reasons that had nothing to do with money.
In fact, one Associated coworker was so surprised by the thefts that he said it
was like finding out that your brother was an ax murderer. Miller claims he is
not a bad person; he never intended to hurt anyone, but once he got started, he
could not stop.
After leaving Associated, Miller was hired by a former
colleague, underwent therapy, and now believes he has resolved his problem with
a-How does Miller fit the profile of the average fraud perpetrator?
b-How does he differ?
c-How did these characteristics make him difficult to detect?
- Explain the three elements of the Opportunity Triangle (commit,
conceal, convert), and discuss how Miller accomplished each when
embezzling funds from Associated Communications. What specific concealment
techniques did Miller use?
- What pressures motivated Miller to embezzle? How did Miller
rationalize his actions?
- Miller had a framed T-shirt in his office that said, “He who
dies with the most toys wins.” What does this tell you about Miller? What
lifestyle red flags could have tipped off the company to the possibility
a-Why do companies hesitate to prosecute white-collar criminals?
b-What are the consequences of not prosecuting?
c-How could law enforcement officials encourage more
- What could the victimized companies have done to prevent