It feels like we’ve been watching an episode of American Publishing’s Most Wanted.
Not many news stories have had me fired up as much as this one! A lone bookkeeper has been sentenced to ONLY TWO YEARS in prison for single-handedly putting a 49-year-old literary agency out of business, and screwing over their authors for millions in royalties.
In a nutshell, over a period of eight years, Darrin Webb, a bookkeeper for Donadio & Olson, siphoned $3.3 million from the business. Ignore the parts of the story about how he had good intentions. Rubbish. He’s a CROOK!
But, that’s not all that infuriates me. How in the name of all things green could a company of that size, which had allegedly received complaints about royalty problems “for years,” not have noticed SOMETHING was going on?
There are three VERY EASY ways to stop (or at least greatly discourage) this type of employee theft:
- Don’t let a non-owner sign checks or have access to money transfers. For larger firms, require two owners to approve every payment over a certain dollar amount.
- Do mini-audits. In other words, LOOK at what the accounting folks are doing. Track their tasks. Do reconciliations apart from theirs. Actually LOOK at the bank statements – but NOT the ones the bookkeeper gives you because he could be a Photoshop whiz on the side. Download them directly from the bank’s website.
- Put software on accounting employees’ computers to track their actions.
If the owners of Donadio & Olson had done these very simple things, their bookkeeper might not have taken the risk (or might have been caught much sooner), and the literary agency might still be in business.
According to this article: “One insider said it was an example of ‘management not paying very close attention.’ Though all sources spoke highly of Olson and his colleagues, many said that they might not be the best businessmen.”
That’s an understatement!
I was in accounting before I started BookLocker.com. I don’t think I’ve mentioned this before but I was sorting checks that arrived with my parent’s business bank statements before I was old enough for braces. My mother did the books for my parent’s real estate business and she taught me the old-fashioned way of balancing the books – with big, green ledger sheets (I still miss those) and an adding machine. I taught myself 10-key to make the work go faster. After I graduated, went to college, and started a family, I got a job doing accounting for a pipeline cleaning company, an aerospace manufacturing firm, and others. Along the way, I learned computerized accounting.
I worked for small companies with too much trust in their accounting employees (I was given check signing authority on day one of my employment with one such firm) and I worked for a large company that required signatures from two directors on every single check, regardless how small the sum.
When BookLocker started growing, I hired a CPA firm, which promptly offered to do my books for me. No, thank you. I have always done all of our accounting, from paying the bills, to bank reconciliations, to month-end processing, and everything in between. Our CPAs have it easy. I give them our Profit and Loss, Balance Sheet, my 1099s and W2s, and a host of other documentation at the end of the year and they just have to plug the numbers into their software program, and advise me of anything I should be doing differently, if they think I missed any deductions, etc.
I would never, EVER trust a non-owner with check writing or bank transfer privileges. That’s why I do NOT understand how such a respected, veteran literary agency could have let this go on for EIGHT LONG YEARS!
I am a hardcore American Greed fan and several episodes have featured crooked accounting schemes leading to the demise of a company. In these cases, the company’s owners aren’t the only victims. Every person and firm owed money by that dying company is also victimized, just as occurred with Donadio & Olson.
Now that the criminal case for the bookkeeper has been wrapped up, I hope Donadio & Olson’s authors have lawyered up. It’s unfortunate the owners of that agency can’t be charged with criminal stupidity. They deserve to spend the rest of their lives paying off the debts their company owes to their talented, hard-working authors.
Please share your thoughts on this horrible situation in the comments box below.
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Got questions about Print On Demand and Self-publishing? Ask Angela Hoy.
About The Author
Angela Hoy is the publisher of WritersWeekly.com, the author of 19 books, and the co-owner of BookLocker.com (one of the original POD publishers that still gets books to market in less than a month), PubPreppers.com (print and ebook design for authors who truly want to self-publish), and Abuzz Press (the publishing co-op that charges no setup fees).
Angela lives on a 52' Irwin Center Cockpit Ketch (sailboat) with her family and pets. Keep up with her family's adventurous liveaboard lifestyle at GotNoTanLines.com
WritersWeekly.com - the free marketing ezine for writers, which features new paying markets and freelance job listings every Wednesday.
BookLocker.com - According to attorney Mark Levine, author of The Fine Print, BookLocker is: "As close to perfection as you're going to find in the world of ebook and POD publishing. The ebook royalties are the highest I've ever seen, and the print royalties are better than average. BookLocker understands what new authors experience, and have put together a package that is the best in the business. You can't go wrong here. Plus, they're selective and won't publish any manuscript just because it's accompanied by a check. Also, the web site is well trafficked. If you can find a POD or epublisher with as much integrity and dedication to selling authors' books, but with lower POD publishing fees, please let me know."
Abuzz Press offers FAST and FREE book publication, but only accepts a small percentage of submissions, and only works with U.S. authors.
PubPreppers.com - "We Prep, You Publish!" Print and ebook design for authors who truly want to self-publish. Offers formatting and design services only, and then provides simple instructions for authors on where to sign up to have the print and ebook editions printed/listed/sold. Cut out the middle man. Keep 100% of what bookstores pay for your book!
Angela's POD Secrets Revealed Series can be found HERE.
Have a POD Book with another publisher? See if BookLocker can give you a better deal. (BookLocker offers "disgruntled author discounts" to those who want to move from other POD services.)
See BookLocker's publishing packages HERE.
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Read More Of Angela's Articles HERE