6 unbelievable expense fraud stories and what they teach CFOs

In November 2025, a new expense fraud case made the headlines as Christian Schenk, co-founder of Crooked Beverage Company, was accused of embezzling around $76,000 from the very business he helped build. As detailed by prosecutors, Schenk allegedly paid for personal expenses using company accounts, from which he also withdrew thousands of dollars, claiming he was owed the money.

This is just one of the fraud stories we’re about to tell you that underline something every finance leader knows: no matter how serious a team is, someone will always try to outsmart the system. And it happens more often than you think. According to ACFE’s Occupational Fraud 2024: A Report to the Nations, expense reimbursement schemes account for 13% of corporate fraud cases, with an average loss of $50,000 per incident.

No matter how entertaining some of these stories may be, expense fraud is only fun until it happens to you. From the most elaborate scheme to expensing something ridiculous like a mahogany-finished trouser press, there’s one thing these cases have in common: they expose how easily trust and weak systems can be exploited.

A tale of expense fraud and identity theft

Christian Schenk, co-founder of Crooked Beverage Company, controlled two of the company’s accounts: one at Square, which he used for the company’s online sales, and another at JPMorgan Chase, which he used for a lot more than business expenses.

Schenk spent over $7,000 at Louis Vuitton and Tiffany & Co., and on Amazon orders of sex toys, essential oils, kids’ toys, and men’s and women’s underwear. But he didn’t stop there. After being confronted by another co-founder, Schenk resigned and, shortly after, he withdrew $48,000 from the same account.

But there’s more. The investigation also found that over $20,000 in online sales payments to the Square account were never deposited into the business’s main bank account, making prosecutors believe Schenk spent them. In total, he embezzled approximately $76,000 from his own business.

Schenk had direct access to the business accounts, making his fraud scheme simple to pull off. So, how did he get caught?

According to CBS News, Schenk owed his ex-wife more than $300,000 in spousal and child support, so a Carver County judge ordered some of his income to be directed to her. After they received notice of the court order, the other co-founders of Crooked Beverage, including Minnesota House Majority Leader Ryan Winkler, got a letter from attorney Chris Madel stating that the case was being settled in court and that they didn’t have to worry about Schenk. However, Winkler found out that Schenk was not represented by Madel but had written the letter himself using the attorney’s name. It was at this point that they began reviewing the company’s accounts and discovered Schenk’s fraudulent spending.

This story combines identity and expense fraud, made possible by Schenk’s position. When one person has unchecked access to business accounts, they can easily manipulate the system, which highlights the need for internal controls and expense verification at every level.

The 200,000 Swiss francs strip club visits

In 2022, Pierin Vincenz, former CEO of a Swiss bank, was sentenced to three years and nine months in prison. The charges against him: misuse of the bank’s corporate expense account that amounted to over half a million Swiss francs in improper expense claims. These included nearly 4,000 francs for the repair of a hotel room damaged by Vincenz during a row with the strip club dancer he was dating at the time, 27,000 francs to rent a private jet for a cooking club trip to Mallorca, and 200,000 francs for strip club visits.

As he stood trial, Vincenz denied all charges against him. It’s not that he didn’t claim these expenses. It’s that all of them were business-related. Vincenz justified a 700 franc dinner with a woman he met on Tinder by saying he was considering her for a job. As for the strip club visits, most of them followed business dinners, and the ones that didn’t, he did them “in the interest of meeting entrepreneurs and business managers.” Vincenz also added that the bank had tasked him with developing its presence and public profile.

The case became one of Switzerland’s most discussed corporate scandals, drawing attention far beyond the banking world and highlighting how expense misuse can escalate without clear oversight.

The $3.8 million Atlanta Hawks embezzlement

Our next perpetrator’s scheme was a bit more elaborate. Lester T. Jones Jr., a former finance executive for the Atlanta Hawks, stole millions of dollars from the NBA team by submitting fake and altered invoices, altering an email to make it look like a reimbursement request was related to a business trip when it wasn’t, and charging personal expenses to corporate credit cards. In total, he embezzled nearly $4 million, which he spent on travel, luxury apparel, jewellery, car expenses and tickets to concerts and sporting events.

Jones’s story is a cautionary tale about the call coming from inside the house. From March 2016 to June 2025, he worked in the Hawks’ accounting and finance department, where he served as Senior VP of Finance from August 2021. He was responsible for the team’s corporate American Express account and administered the electronic expense reimbursement program, which, before July 2024, was very limited. For example, transactions made on employees’ corporate credit cards weren’t visible in the program to the people responsible for verifying expenses. Jones was aware of this fact and exploited it for personal gain.

According to ACFE’s report, finance teams are the least likely to be involved in corporate fraud schemes, but they still commit a part of them: 82 out of the 1,221 cases analysed in the report. The Hawks’ story is just one example, but it clearly shows how faulty systems make it very easy for people like Jones to manipulate them.

Snakeskin boots, hunting gear and Bloody Mary mix

In 2006, Thomas Coughlin, former Vice Chair of the Walmart board, was found guilty of tax evasion and wire fraud, much of which he disguised as business expenses. Coughlin falsified expense reports and stole half a million dollars from Walmart, which he spent on handmade boots, hunting gear, liquor, and a $2,590 dog enclosure, among other personal items.

Similar to the previous two stories, Coughlin held a top executive role, so he had a legitimate use for company funds, which may have contributed to making his scheme harder to detect. He was caught due to a human error (his own) after he asked an employee to approve a $2,000 reimbursement without any supporting invoices.

Coughlin’s scheme led Walmart to lose a large sum to fraudulent expenses, and to see its shares plummet after the case against Coughlin was made public, tarnishing the company’s reputation.

Pace Worldwide’s Bonnie and Clyde

Paul Dunham and Sandra Dunham were, respectively, the CEO and President and the Director of Sales and Marketing at Pace Worldwide, a manufacturer of soldering irons for the electronics industry. Between 2002 and 2009, they ran an expense fraud scheme in which they charged personal expenses to their corporate card and submitted false invoices that claimed them as business expenses. In total, the Durnhams defrauded Pace Worldwide of $1 million that they used to buy luxury bedding, furniture for themselves and their pets, and to pay off a mortgage on two timeshare units in Barbados.

Even though they didn’t embezzle as much money as Lester T. Jones Jr or seek reimbursement for something as outrageous as calls to a psychic, the Durnhams caught the media’s attention more than other fraud stories for several reasons. They were British citizens facing fraud charges in the United States. On an occasion when they were both in the UK, they deliberately overdosed on drugs to avoid or delay their extradition to the US. Additionally, Paul Dunham abused his position of power to involve other Pace employees in the couple’s scheme and was further charged with conspiracy and money laundering.

If you search for “Paul and Sandra Dunham”, you get pages and pages of results that mention expense fraud, extradition, and even a “death pact”. Theirs is one of the most famous expense fraud cases by British citizens, topped only by our next and final story.

The British floating duck house

In January 2011, two members of the British Parliament were sentenced to prison for expense fraud. One of them faked a tenancy agreement on a flat he was renting after relocating for his job, but which he, in fact, owned. The other one continued to submit monthly expenses towards a mortgage that he had already paid off. These two men are just a fraction of the total number of Members of Parliament (MPs) involved in Britain’s greatest expense scandal to date.

The scandal broke out in 2009 documents leaked to The Daily Telegraph revealed the details of all MPs’ expense claims approved between 2004 and 2008, most of which were related to keeping second homes in London. According to the Green Book, the official guide on MPs’ allowances at the time, the Personal Additional Accommodation Expenditure (PAAE) is “available to reimburse Members for the additional expenses necessarily incurred in staying overnight away from their main home for the purpose of performing their parliamentary duties”. These expenses included rent or mortgage payments, hotel costs, and utilities, as well as home furnishings and maintenance, which is where the most bogus claims come in.

Not all MPs went to such lengths as to falsify rental contracts. Some of them simply benefited from the expense system to fund home improvements with taxpayer money. Sir Peter John Viggers, for example, was reimbursed over £30,000 for gardening expenses, including a floating island to house the ducks in his pond. The floating duck house was later auctioned to raise money for charity and served as the namesake for a satirical play based on the expenses scandal.

While some MPs committed actual fraud and were tried for it, others just saw an opportunity to outsmart the system. Britain’s expenses scandal revealed serious gaps in the system that allowed MPs to abuse it in the first place. As a result, in 2010, the Independent Parliamentary Standards Authority (IPSA) was created to regulate and administer the business costs incurred by the 650 elected MPs and their staff.

These stories show that expense fraud isn’t always about the cleverest scheme, but can result from organisational gaps in control, culture, and clarity. They also teach finance leaders valuable lessons on how to stay ahead of fraudsters and stop the next false expense story from becoming their own.

Lesson #1: control

Stories like those involving Walmart or MetLife make it clear how easily fake expense claims and falsified invoices can slip through manual reviews.

When it comes to fixing this, automation is finance’s safety net. Smart expense management software like Rydoo’s Smart Audit analyses all submitted expense claims, detecting duplicates, non-compliant expenses, and manipulated receipts. When it flags a potential issue, the platform displays a policy alert so finance teams can take immediate action.

By reducing manual expense checks, automation tools increase finance professionals’ confidence in the approval process. ****Every claim is supported by consistent data and automated checks, helping finance leaders have more control over employee expenses in a fraction of the time.

Lesson #2: culture

Fraud thrives in ambiguity. Who decides what the line is between a necessary “home improvement” and a design choice that takes it too far? If a dinner with investors counts as a business expense, why can’t a visit to the strip club with those same investors count as one, too?

Many of these expense fraud cases succeeded not because the employees were criminal masterminds, but because they operated in expense grey zones. When expense reimbursement policies aren’t clear, employees are more likely to try to exploit them.

Technology alone isn’t enough to eliminate expense fraud cases. Leaders should also foster a culture of open communication and clear policies that reduce misunderstandings and prevent fraud attempts from happening in the first place.

Lesson #3: clarity

Clarity means knowing what’s happening across your organisation as it happens. Real-time visibility is key to eliminating blind spots and avoiding cases like the Atlanta Hawks one, which was only possible because corporate card transactions weren’t visible in the expense-reporting program.

Expense management software offers a solution by automating policy checks on all submitted expenses and automatically detecting fraudulent claims.

Expense fraud cases have more than just a financial impact on businesses. It can lead to reputational damage, as seen in the Walmart story, and internal distrust. Having visibility over employee expenses is essential to help finance leaders prevent fraud, and it also helps reinforce trust across teams by making spend information more transparent.

The Schenk case shows just how easily trust can be exploited, and how any business can fall victim to an expense fraud scheme.

The future of finance is about preventing employee misconduct through more control over expense claims, a policy-compliant culture and real-time visibility into reimbursement processes.

The sad truth is that fraud stories will always exist. But the good news is that now, with smart automation tools in place, CFOs get to write different stories: ones in which they design systems that make fraud nearly impossible and protect the trust between organisations and employees.