I started Yanon’s Classic Hardwood Flooring and Construction during the Great Recession while I was raising three kids as a single dad. Through self-study, I built a successful business for high-end clients in Montrose, Colo. In 2021, I managed four employees and a bookkeeper. Everything was going well until one Monday morning when I got the shock of my life.
A typical Monday morning included a team meeting at my shop at 6:30 a.m. However, Feb. 22, 2021, was not a typical morning. I was locked out of my office, and no one was there. I texted my bookkeeper—no response. I texted my guys—no response. I started freaking out.
I started Yanon’s Classic Hardwood Flooring and Construction during the Great Recession while I was raising three kids as a single dad. Through self-study, I built a successful business for high-end clients in Montrose, Colo. In 2021, I managed four employees and a bookkeeper. Everything was going well until one Monday morning when I got the shock of my life.
A typical Monday morning included a team meeting at my shop at 6:30 a.m. However, Feb. 22, 2021, was not a typical morning. I was locked out of my office, and no one was there. I texted my bookkeeper—no response. I texted my guys—no response. I started freaking out.
I had to break down my own door to get into my own office. I couldn’t get into my own computer because the password had been changed. Finally my bookkeeper, who had worked for me for two years, texted me and said there was a letter for me in the mail slot. In it, she said she was “sorry it had to end this way,” and she was starting her own company.
I called the police, and they had to turn it over to a detective. I went to the bank, and they gave me all the records. As I went through them, I began seeing what she had been doing. What we discovered during the investigation was worse—we realized she had stolen about $200,000 from my business.
I took my computer to an expert to try to get into my records, but she had sabotaged it. All my QuickBooks files were deleted—all my employee records, client records and paperwork were gone. It turns out she kept all the client records for herself, because she started a new company in a nearby town. She had told my employees I was about to fire them and they should come work for her.
As we went through the financials, we saw that within two months of being hired, she started buying personal things. She had convinced me she needed a credit card to buy supplies for the guys. What she did was buy things for herself and her kids. She bought an Apple Watch, personal things at Home Depot, the gasoline for both her car and her husband’s, a trip to Washington, D.C., for her kid, and much more.
As we investigated, we realized she had forged my signature at the bank and forged a form making her my power of attorney. She moved money between multiple accounts. When I wanted to see our financials, she would move money around so everything looked normal, and then she would shift money back into her own accounts.
When I had hired her, she had convinced me we didn’t need my accountant. When I went back to him with this mess, he discovered I had to come up with $30,000 immediately, because she hadn’t been doing payroll taxes. (He said that’s the first place to check in a company’s financials when money is being embezzled.)
The detective gathered enough evidence to get an arrest warrant for her and her husband (his name was on her accounts), and she was Montrose’s “most wanted” for a day. She was arrested and charged with theft, unauthorized use of a financial transaction device, money laundering, cyber crime as a scheme to defraud $100,000 or more, identity theft, check forgery, gathering identification information by deception and criminal simulation.
It wasn’t until August 2023 that she accepted a plea bargain and was ordered to spend two years on probation and pay back $75,000. That wasn’t close to what she had stolen, so there was also a civil case that recently was decided in my favor—she must pay back the full amount.
As far as the business, we bounced back. We have a lot of overhead with a large building and our trucks—a full-blown business—but we didn’t have to borrow any money. We do high-end homes, and the checks started coming in.
In retrospect, of course I would do many things differently. She had been an acquaintance of my previous bookkeeper, so I trusted her. Because I am so busy working, I didn’t call around to check references and find out more about her. If I had, I would have discovered she already had a criminal record.
Of course, I never should have let her cut my accountant out. Today, in addition to him, we have a bookkeeper we trust, my daughter is working in our office, and my wife checks all our financials on a regular basis—everyone is doing due diligence to keep the business safe.
The main lessons are twofold.
First, have systems where multiple people are watching each step. The accountant watches the bookkeeper, who watches the office manager, who is watched by the owner, who watches the accountant. A redundant system of checks and balances would have prevented this.
Second, pay close attention to payroll taxes, sales tax, vendors, fuel, inventory and miscellaneous expenses.Â
Wood flooring is my livelihood, but it’s also been my passion ever since the first day I started doing it. She tried to take that from me, but in the end, all she got was a warning from the judge to seek therapy to address her “criminal thinking.”Â