Bookkeeping goes to court…. businesses need to be “Audit Ready”

November 27, 2009 by Dan White.

The following case, points out how important it is do do the Tax Audit Solutions kind of bookkeeping. Audit Ready Books are prepared so the business owner or an auditor can completely understand the ebb and flow of money through cards, banks and cash payments. To avoid tax problems, audit ready bookkeeping is the answer.

To learn more about audit ready bookkeeping go to www.tax-audit-solutions.com and www.danwhite.ca

The story below is an interesting read.

Dan White

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Courtroom gasps over accused fraudster’s credit card debt
Published Friday November 27th, 2009

JEFF DUCHARME
TELEGRAPH-JOURNAL

SAINT JOHN - Linda Marie Burton and her husband Andrew had a combined yearly income of $80,000, but in 2006 paid $229,389 on four credit cards. The numbers brought a gasp from the public gallery and caused some jury members to shake their heads.

Mary Ellen Saunders/Telegraph-Journal
Linda Marie Burton, accused of ripping off the owner of Sharp’s Corner Drug Store in Sussex, leaves a Saint John courthouse earlier in her trial.

From 2003 to 2007, they paid at least $708,822 on the four credit cards, according to an RCMP investigator.

Burton is on trial accused of defrauding her former employer Beverly Sharp of $250,000 from 2003 to 2007. For 21 years, she worked as a clerk and bookkeeper at Sharp’s Corner Drug Store in Sussex.

Const. Mark Simon of the Hampton RCMP conducted the investigation and dug through thousands of cheques and invoices.

Crown prosecutor Patrick Wilbur asked Simon if the businesses could be providing the additional revenue.

“The business didn’t appear to be doing well,” said Simon, admitting he had no specific figures. “They didn’t appear to be generating a lot of money.”

At the heart of the trial are a number of invoices that were for work done on Burton’s properties and then doctored so they appeared to be work done on Sharp’s properties.

Defence attorney Patrick Hurley went on the attack saying all the numbers showed was that a “tremendous” amount of money had been paid on the accounts.

“What you’re leaving out is there may be another explanation,” Hurley said to the Mountie.

The records, countered Wilbur, came from the Canada Revenue Agency and tracked “legitimate” income.

Earlier in the day Sharp was recalled to the stand.

Under steady questioning by the defence, Sharp steadfastly denied a wedge had been driven between him and his brother over money. The brothers are co-owners of the store.

According to defence lawyer Hurley, in July 2007 Beverly Sharp had an emotional meeting with his former bookkeeper Linda Burton - a meeting that Sharp said never happened.

According to the defence, Sharp put his arm around Burton during the meeting and told her she was a great person and whatever happened, it was beyond his control. His eyes, said Hurley, then began to fill with tears as he told Burton he was too old and too weak to fight with his brother Harold Sharp anymore.

“I never put my arm around her and said that,” the 78-year-old Sharp said.

Flipping through a large black binder crammed with copies of invoices and cheques, Hurley told the court the changes to the invoices were made at Sharp’s request so he could claim the expenses on his income tax.

In 2007, the Canada Revenue Agency questioned the amount of the expenses and launched an audit.

The audit and other financial questions raised by Harold Sharp led to the fight between the two brothers, Hurley suggested.

Wilbur asked Beverly Sharp if he and his brother were battling over money.

“No. I have enough of my own money,” Sharp said.

On Wednesday, Sharp testified that he was leaving the store to his employees upon his death. His brother confirmed the handover in his testimony later in the day.

The 80-year-old Harold Sharp owns 48 per cent of the drug store. He said he first noticed the discrepancies in 2005. A store that normally produced a $200,000 profit a year had none that year. Harold Sharp then fired the accountant, hired another one and then when he was presented the evidence against Burton in 2007, he fired her too.

“I gave her an extra five or six weeks pay and kicked her out,” Harold Sharp said.

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