Accounting software failed to detect $1M embezzlement, suit claims

Kelly Holleran Apr. 23, 2012, 8:56am


The owners of a Port Neches medical office are suing their accountants for failing to catch an employee who stole more than $1 million.

Robert and Delaine Faseler claim they hired defendant Brammer, Begnaud and Lattimore to provide accounting services to their medical office. The firm, which had been servicing the Faselers for more than 20 years, installed an accounting software system used by the medical practice's employees, according to the complaint filed April 9 in Jefferson County District Court.

However, when installing the software, the accounting firm failed to install a security function that would prevent manipulation of the system, the suit states.

In turn, an employee at the medical office allegedly embezzled nearly $1 million from the Faselers from 2005 until September 2010, the complaint says.

"Defendants, despite obvious indications of embezzlement in the records that were sent to them monthly and which they were responsible for reviewing and reconciling, failed to notice the irregularities, advise Plaintiffs of ways to identify or check for the same, and/or expose the embezzlement," the suit states. "Defendant Larry Paul Begnaud in fact, would ridicule Plaintiffs when they would express to him they were not receiving the monies as indicated in the quarterly statements prepared by Defendants and provided to them."

It was not until Sept. 23, 2010, that the Faselers discovered the embezzlement, the suit states.

The Faselers allege negligence against the defendants, saying they negligently failed to properly train the plaintiffs on the software and failed to properly install the software, among other negligent acts. They also allege negligent misrepresentation and breach of fiduciary duty against the defendants.

In addition to the accounting firm, the Faselers name the firm's partners -- Larry Paul Begnaud, Austin Jon Begnaud and David Lauer Lattimore -- as defendants.

The Faselers are seeking an unspecified judgment, plus pre- and post-judgment interest at the legal rate, costs and other relief the court deems just.

Jessica L. Hallmark and Robert B. Dunham of Dunham Hallmark in Beaumont will be representing them.

The case has been assigned to Judge Donald Floyd, 172nd District Court.

Case No. E192-280

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