Alexi Cashen | Lies, Deceit, and a $1.8 Million Embezzlement

John Corcoran  4:24  

And give us some color on this. So about this woman who you hired, I believe you said she was a veteran. She’d been outcast by her family. Tell us tell us the whole backstory.

 

Alexi Cashen  4:38  

Sure. Yeah. I mean, at first pass, Ray was very likable, she was incredibly courageous, courageous in terms of her military experience, and having been deployed in Afghanistan, and, you know, actually been in combat and had seen an experienced things that no one in my company had. So she had with her sort of a tough spirit, a really strong work ethic, there was really nothing that she would say no to she was willing to jump into any project, any, any new aspect of our of our business and and help out, she would stay late, she would work long hours weekend, she, you know, had great customer service and a lot of sympathy and empathy for customers. She was a, you know, a role model amongst our other employees.

 

John Corcoran  5:30  

Right, right. And you really, I guess, that led to you letting your guard down and trusting her with some areas of the business, which, in retrospect, you mentioned in the talk that you gave you kind of regretted?

 

Alexi Cashen  5:47  

Yeah, it’s a challenging thing, because I think, as a business owner, you know, especially you’re going from a small business to a growing business. You know, this isn’t some corporate empire that I’ve built, I have very personal, meaningful relationships with my employees, some of them even friendships. And so, you know, in many ways, I have my guard down, because that’s the type of culture that I intentionally was trying to and continue to try to cultivate. And yet with this particular individual, you know, yeah, she she was open and candid about her personal life, having been given up for adoption, and then sort of cast out by her religious, adoptive parents, when they found out that she was a lesbian, and then, you know, just live kind of a drifter life and really struggled to kind of find family. And, and, you know, so we felt that we had brought her into our company family that we had, you know, done more than just offer a person an opportunity for employment, but to really love her to give her a place of support and home and identity.

 

John Corcoran  6:55  

Yeah, so what point did it turn awry? When did you didn’t find this out until later. But, you know, what point did the investment start?

 

Alexi Cashen  7:08  

Yeah, so I’ll cut to the chase, this employee of ours, re, she’s still $1.8 million from our company. And she did that over a period of two years, just over two years. And so we didn’t discover it until the fall of 2017. We didn’t discover it until that time, and it could have gone on a lot longer. Because she had she had created in schemed a very sophisticated a scheme whereby we were enlisting her to communicate with our clients. And so many of those clients needed to make payments to wineries each and every day. And so her job was to communicate back and forth with the clients as well as with our bank, to then convert us the funds into whichever form currency was required to pay the foreign wineries. So essentially, she would confirm, let’s say, 10 Winery payments that needed to get made in any given day. And we would wire over funds to cover those payments. Well, she would maybe pay nine of those winery payments, and then feel the 10th and then just wait for tomorrow for more funds to come in. That’s called kiting money. a Ponzi scheme, in essence, whereby you’re playing forward and the jig ran out, she got very greedy, she stole a lot faster, she was hungrier. And so right up and leading up to the point at which we discovered this embezzlement. she’d gotten extremely greedy and was unable to stave off, you know, customers and wineries such that it all kind of came crashing down.

 

John Corcoran  8:54  

It was it all coming out of your accounts coming out of your clients accounts.

 

Alexi Cashen  8:58  

No, it all came out of our. So at the end of the day, we were left holding the bag, none of our customers were harmed. We had to obviously backfill and make whole on a lot of missed payments. And and those just kind of in the immediate months leading up to our discovery of the embezzlement right

 

John Corcoran  9:17  

now. So earlier in my career, surely actually, after I became an entrepreneur started my own boutique law practice, I had left this other firm, and I was still working in the same building. And the owner of that law firm came up to me, and tells me that his trusted right hand woman who had been with him for 20 years or so, he just discovered she’d been embezzling. This was over about they, as far as they know, maybe 10 years or so it went back so far, that they didn’t have that bank records. And they didn’t even know the total amount that was missing. And in this case, what ended up happening, what frequently happens in investments, as I understand it, is it’s a trusted person, right? It’s always a trusted person, the person you trust the most, and something, you know, they go on vacation or something like that. And that’s how you’re able to uncover it. So how did you uncover it? In fact, x is really interesting, I read it that people that embezzle they, they will never go on vacation, because they know if they do, then others will step into their place and discover their fraud. So is that what happened? or How did you uncover it?

 

Alexi Cashen  10:24  

That Yeah, that’s exactly what happened. So, you know, there was a client in particular, who was very, very, very frustrated. And I would imagine that this woman’s stress just overcame her. And so she, she had to take a leave. And, you know, just had a famed health scenario, again, to be sure she was she was definitely stressed out with this scheme catching up to her, but, but she feigned the seizure. And, in any case, so we, we knew that she was going to take, you know, five, six days off or something. And it was at that point, that my business partner, you know, logged into one of one of these bank accounts. And also, just so we had to take over the email account, you know, it’s not just bank accounts, but the amount of communication that she managed, solely, having never taken any vacation, because in that same two years, you know, even if we had a day that was particularly, you know, where we needed to make payments, she would always say, Oh, it’s just a few, I can make it in between things I’m doing with my family. So she held very tight to this workload, and never had anyone, you know, cover for her while she had time off. So that that was something that I have also now learned that, you know, taking vacation is essential, it’s actually something in the financial world that there is a mandatory consecutive leave, I think it’s seven or 10 days or so that you have to leave consecutively for those that we set number of days, and that somebody has to then take over, you know, not just your workflow, but managing your inbox is the amount of email communication that somebody can independently, you know, conjure up stories and themes and lies and this truth, or the things that they might be telling your customers. It was it was tremendously devastating.

 

John Corcoran  12:24  

That’s somewhere where you can spot it is just seeing the stories that they’re telling over email. Exactly. And what kind of stories was she concocting, he was making up stories that As for why these payments weren’t being made?

 

Alexi Cashen  12:36  

Yeah, you know, she could even devised this concept that she was telling clients of ours, that, you know, hey, I don’t know why that wire, you know, doesn’t appear to have come through on your end, I’ll have to file for a EU wire tracker or a tracer to trace the wire, which we all know, why are the immediate? And, you know, so she had just devised this glossary of terms that were just things that like, they’re not even true, and had convinced clients that this is this is a cause to some of the delay.

 

John Corcoran  13:09  

And I think I recall you talking about the weekend, you found out and you were basically the whole weekend, you were in the office trying to unwind this web of lies. Tell us a little bit about that experience.

 

Alexi Cashen  13:23  

Yeah, I mean, I think that that moment at which I originally learned of it, I was in complete denial, feeling like, Surely there’s an excellent explanation or I know this woman, she’ll give all the money back. The denial was very intense. But then again, spending that first weekend with reality setting in and, and the betrayal. I obsessively poured your information, I spent hours and hours going through years of her emails. You know, I learned that the very first time she stole from us was 16 days after her haven’t been given access to a bank account, which was very deliberate very soon, after we had given her you know, the trusted access and authority to to this bank account. I read that she actually wasn’t in Afghanistan, and learn that she lied about her military experience, some of us discharged from feeling from the military. I, you know, learned that she forged documents, doctored wire confirmations, I read email where she pretended to be the CEO, where she pretended to be me. You know, I learned that she didn’t need to have this brain surgery, and that she was explaining, which was a result of having epilepsy and the seizures. You know, I, the real crazy thing, too, is that my business partner actually bought her a house. Well, at least, you know, put the down payment and put it in his name so that she and her family could have a nice place to live. She had record credit, and so he was trying to help her re establish it. And that same month that they closed on that house, she’s still, I don’t know, $300,000 or so that’s July of 2017. and bought a condo in cash.

 

John Corcoran  15:15  

She’s crazy, man. Yeah. So she’s just living this kind of double life of you guys telling her telling you one story, and then going off and living it living up the high life on the weekends in the evenings.

 

Alexi Cashen  15:29  

Exactly. I mean, she would drive to work and drive a, you know, a US Jeep Wrangler, but then she’d go home, and she drives her Harley Davidson, and take her wife on these fancy helicopter rides. And she spent, you know, a quarter of a million dollars in landscaping, and that house that my partner partner bought for her. You know, she bought cars for cousins and distant relatives, you know, just just crazy, crazy spending things that just didn’t make any sense. She didn’t, we can tell, you know, actually invest in any real assets that could, you know, help her family or save money for them. It was really just a wild spending spree. Exactly.

 

John Corcoran  16:13  

What, looking back now, were there any red flags? Or is there anything that you feel like, you know, or to benefit those who are listening that, you know, the types of things that you should look forward to prevent this sort of thing from happening to you?

 

Alexi Cashen  16:31  

Well, I mean, being able to, to predict and identify these things, is a real challenge. You know, I, it’s clear to me that this woman was a legitimate sociopath, which means that she lacks the ability to have any empathy for other human beings. And so she just never felt bad about what she was doing. So the way in which her emotions and the way that she would conduct herself was, was really, really deceptive, very hard to, to, you know, have a red flag or a sixth sense or an intuitive response to. So despite the fact that that truly I did not have a intuitive reaction to this woman or have any clue of any wrongdoing. You know, we also as a small business just didn’t have certain protocols in place. You know, we, for starters, never conducted background checks, at the very least, to conduct background checks on people who will be handling millions of dollars of cash. We didn’t have controls in place in terms of, you know, identifying and reviewing people’s work and reviewing and really digging in to to each employee and what they’re doing. We didn’t have the right insurance, we had just our general business policy, which had just a small recuperation for Saft. But when an employee actually feels from you, there was a separate writer called a commercial crime policy that we didn’t have, that would have helped us greatly in this ordeal. You know, I, I think I learned to that it’s important to, you know, again, despite the fact that I that I didn’t have a unique and intuition about this person, there were times when I look back at 2015, and 16, and 17, where, you know, I knew where controls were weak, I certainly knew that we were building a company for speed and not accuracy. And, and I saw a lot of those gates in our prophecies and our rigor. And they were wide open to me. And that was another way in which this woman was able to really pray on us is that because she was privy to a lot of executive meetings and conversations with our CPA, she was aware of those weaknesses. So, you know, I learned to be a little bit more guarded about who I am open up about my company’s weaknesses, for fear that others might prey upon that deliberately.

 

John Corcoran  19:07  

Yeah, yeah. It’s, it’s such a crazy thing, because on the one hand, building a business like you did of that size, is there so few businesses that hit that level? So on the one hand, is wildly successful, and it’s understandable why you would think, Okay, well, we’ll, we’ll fix these problems as we get there. When we get resources, when we have a chance to slow down and catch our breath, that sort of thing. Those are the stories I’m sure actually tell you exactly. How for the size business business that you had, I mean, 2 million out of the, you know, out of your profit is so significant, how did you survive after you discovered this?

 

Alexi Cashen  19:52  

I mean, in essence, wiped away and, and tires, years of profits, and then some, we had to just dig up our country, then drain, you know, good chunk of a line of credit and make a lot of payments to just make hold on that devastation. And that’s something that my business partner and I alone are personally saddled with that loss continues to be a stressor for us personally, but I can’t tell you how grateful I am that, despite there being certain weaknesses in our business, we obviously built a pretty strong one, nonetheless, because we didn’t have to lay off any employees, you know, we didn’t have to slow down growth tremendously. It really is just a personal burden that my partner and I, you know, have to suffer. But it isn’t something that crippled the business. Or that that that we weren’t able to carry on normal operations and continued growth in the last couple of years.

 

John Corcoran  20:51  

How do you You call yourself chief executive optimist? How do you remain so optimistic and in light of this experience?

 

Alexi Cashen  21:00  

That’s a great question. You know, because I think coupled with optimism, I can’t lie to you and say that I haven’t had my fair share of, you know, shame, I think is the most predominant emotion, I feel embarrassed that this happened. You know, I feel all sorts of grief and sadness. And I felt pretty isolated and depressed at times. But, you know, I am a just native positive person, and I can’t live my life, not trusting people, I can’t continue to wake up every day and get excited about what I’m doing. And I can’t keep growing my business if I don’t continue to trust my valuable employees, because they’re extraordinary assets. And I couldn’t do this. Without them, I can’t continue to grow and scale the business without being able to let my guard down. Despite the fact that I have learned a lot and the guards up a little bit more. It can’t it can’t prohibit growth. But beyond that, I guess, you know, I guess I feel like I’ve had a extraordinary opportunity. You know, it, this has been a personal financial blow, and that sucks. But, you know, the fact that I’ve been able to take it in the chin and keep going and know that I do have this really strong and dynamic business makes me incredibly proud. I feel, you know, I feel all sorts of feelings of, of just love of abundance, in terms of the people that have supported me through this incredibly challenging time, I actually made a list, I called it my unconditional love list of all the people that unconditionally love me, and what they can do, to offer me some sort of perspective that can be grounding during this time, and I just dialed like, mad and I called all of them on that list. And I just really relied on the support around me, which was abundant. And to be honest, when I think about this woman, who just this past March was sentenced to prison for nine years. I think, gosh, I am so lucky that I’m not her, you know, that I’m not law, that I don’t feel abandoned by my family that I, you know, don’t have this deep sense of deceit. This ingrained inside me I, I feel beyond grateful that I you know, I’m, I’m not her, and that to some extent, I can even forgive her. Because, you know, employees are, to a certain extent, you know, they’re, they’re not bulletproof. And that temptation is pretty real, I can imagine, and had the end of the day, she’ll pay her sentence. And, you know, the system is at work. But, you know, I guess I think at the end of the day, the most important thing that I’ve learned is just the ability to forgive myself. I think that’s been a a tremendously important piece of my journey and all this experience. Because I’ve been probably harder on myself than anybody else. Throughout the the last couple of years, just kicking myself, why didn’t I see that red flag? Or why didn’t I dig deeper? Why didn’t I protect my business or my employees? You know, that that year that we discovered the locks, we weren’t able to pay our employees, their their urine bonuses. And that still is a tremendous source of pain. For me. It feels like my duty and my job to not just protect my business and myself and my family, but to protect the valuable employees, who again, you know, I choose to trust.

 

John Corcoran  24:44  

Right, right. It takes such tremendous courage for you to come out and to tell this story in a public way. And so I just want to salute you for doing that. And for telling your story. I think it’s, there’s going to be so many people listening to this, who are going to preach that so so my hats off to you for that I wanted to ask you about. You said that when you initially reported it to authorities that you had some negative responses from them? What was going to the justice system all the way through? If there was a trial, in the sentencing, what was that? Like?

 

Alexi Cashen  25:24  

Gosh, do we have another hour on your podcast? Do I you know, to be honest, I didn’t know anything about really how all this work. And so it was a, I think another tremendous eye opener for me in terms of really understanding kind of how the system works, how slow it is, how rigged it seems, at times. You know, with the first the first meeting, we talked to the district attorney, and somebody from the FBI was there, who ultimately didn’t pick up our case, because they didn’t think it was big enough. And that just felt very strange and how hard to settle with, you know, it was a challenge for me to, to really kind of trust our lawyers to guide us through the system that I didn’t know and, you know, a tremendous amount, I felt pretty resentful about the, the way in which I had to be civil throughout all of these depositions and ultimately a mediation, the disclosures,

 

John Corcoran  26:22  

you know, just, you ran into her in the bathroom, sometimes during breaks during I did,

 

Alexi Cashen  26:27  

I did during one of the depositions, I ran into Ray in the women’s bathroom, and just locked eyes in the mirror, washing our hands, and it just felt like the whole world stopped, and it was in complete slow motion. And I didn’t say anything to her, because that’s a part of the process, like you don’t speak, unless spoken to or been asked a question. And, you know, it’s it’s definitely the amount of professionalism and sort of the amount of like, just grief I had swallow in each of those moments and temper the emotions that I was really feeling inside was tremendous. There’s nothing in life that really could have prepared me for what that experience is actually like, you know, sitting across from her at a in a conference room for eight hours in a pop, you know, multiple days in a row is was just something that, you know, it seems cool, it seems cool to have to interface with somebody who has hurt my business and me and my partner as much as she did, and giving it for you. Yeah, it’s reliving it, and then also having to rise above it. And, you know, be my highest self, it was a an extraordinary challenge. And one that I feel like I my lawyer even said, you know, you got an A at that. But it was it was it was super rough. It was it was definitely a big,

 

John Corcoran  27:53  

big ask and will probably not everyone realizes is there’s the criminal case, and there’s a civil case, and the criminal case, your you’re a participant in it, but you’re not paying for the prosecutors, but the civil case, actually paying out of pocket, you already lost all this money, and then you have to spend more money on the team of lawyers to pursue it.

 

Alexi Cashen  28:10  

We did. And ultimately, we paid the lawyers, you know, basically the same amount that we recouped in assets. Ultimately, we settled in mediation, and, you know, settled on a condo that I mentioned, as well as a few of the cars. And that’s it. That’s all that they were willing they that she and her wife were willing to give up. And unfortunately, we had to just settle with that to walk away because we were hemorrhaging cash and legal bills. And it just was a bad business decision to continue to fight the sort of pursuit of justice was a net net loss for the business from a fiscal perspective. And so it was it was incredibly difficult to walk away from that, and choose to not go to trial and not quote unquote, when or see justice served in that regard, when we knew that the upside was very little. And we had already spent kind of that maximum threshold in terms of what would even be likely to recoup. So, you know, the whole thing was a net loss and hours and hours of my time throughout the course of the year and a half.

 

John Corcoran  29:13  

Right, right. Any final words of wisdom that you want to share with anyone listening to this?

 

Alexi Cashen  29:22  

You know, I think despite the growing pains of business and feeling like, you know, gosh, I can’t get there quick enough, or I can’t invest in that resource. fast enough, do it anyway, you know, figure out other ways to, to grow more conscientiously, as opposed to kind of wildly, and you know, its growth is exciting, but it is, it’s certainly more rewarding. I now know, when it’s more cognizant, and you’re able to be in control of some of those processes.

 

John Corcoran  29:56  

Great advice. I’m going to wrap up with the question that I always was asked, this has been a more somber and serious episode than usually than it usually is. But I do like to ask people about the really the big relationships that have helped them along the way and building up their business. So the way I usually frame it is we’re at an awards banquet, and you’re receiving an award for Lifetime Achievement, perhaps for all of your courage that you experienced, or that you demonstrated going through this experience. And what we all want to know is who do you acknowledge? Who are the people that you think who are their friends, were the people that you turn to, during this experience before, during and after?

 

Alexi Cashen  30:40  

That’s a great question. You know, I would say that, that my eo, my entrepreneurs, organization network is been an extraordinary resource for me, in my business overall. But also, particularly during this really challenging time, my forum group, which, you know, for those that don’t know much about you, or that form, experience, but there’s, there’s 10 other individuals that I meet with once a month, who all own their own businesses have done at least a million in revenue or more, and our problems are all the same, even though our industries and companies are all vastly different. And so that that support has been tremendous. I certainly thank Jason economics is one of the one of our old vendors who was in the wine software industry, who introduced me to do and I just, I remember meeting him for the first time and kind of just watching him talk to his sales director and, and just the way in which he was communicated to me, the customer, and it just felt so different. And, you know, I asked him after dinner, like, what are you doing? Like, how do you know how to do this, like, there’s definitely something different about you, and I can’t quite put my finger on it. And that’s just I think the the practice wisdom of somebody who is courageous enough to explore the self, and to really pay attention to our weaknesses as much as their strengths and to build support because, gosh, I don’t know how to live life without it. You know, I would obviously like to thank my business partner, Tim Allen, Tony, who’s been a longtime friend, and clearly my fellow risk taking junkie, and, you know, just enormously proud of what we built. But I would be remiss to not mention my mom, who I think has been my cheapest of all teachers. She is a spiritual gangster and has impressed upon me the wellspring of love and just depth that is really unique. She always encouraged me to look at the other hand, she would say, you know, Alexa, you’ve got this problem in your right hand. Look at your left hand. what’s what’s on the other side of that? What’s the other way of looking at it or spinning it, which is, I think, a real testament to her and has deeply imprinted me.

 

John Corcoran  33:00  

That’s great. Alexi, thank you so much for your courage and coming on the show and sharing your story. So publicly like this so that others can, you know, learn from your experience. TE imports, calm is the website. Where else can people learn more about you or connect with you?

 

Alexi Cashen  33:18  

I you can, you can connect with us at TM. com or on Facebook and LinkedIn. And thanks very much for the time, john, I appreciate it.

 

John Corcoran  33:28  

Great. And if you send her a message on LinkedIn, be sure to say that you heard her here on smart business revolution podcasts. Lexi. Thanks so much.

 

Alexi Cashen  33:36  

Thanks, john. Thank you

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