Ken was the only accountant for a small-town land development company. He was terminated when the company fell on hard times. One year later, when the owner of the company was reviewing the payments received from a landowner for development cost, he discovered that the landowner was three payments behind for a total of $60,000. He contacted the landowner who showed him the check stubs and the canceled checks. After further research, he found that the account in which the checks were deposited belonged to Ken, his former accountant.
1. What type of fraud did Ken commit?
2. What actions should be taken against Ken?
3. How could this fraud have been prevented?