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FULLSCOPE EMBEZZLEMENT COSTS $1.1M

Embezzlement by a former Fullscope employee, which was discovered shortly after its purchase by Edgewater Technology on Dec. 31, 2009, has cost the company about $1.1 million.  Those costs were outlined in the form 10-K that Edgewater, filed with the SEC last month. That includes $261,000 in professional services such as forensic audit and legal costs. There was a $116,000-write-off of embezzled accounts receivables balances and $950,000 to establish an accrual for estimated pre-acquisition sales-and-use tax exposure.
The company was able to subtract $190,000 from the total because of the receipt of insurance proceeds. The 10-K said the potential sales-and-use tax issues were created by the methods the employee used to conceal the theft. The person arrested for the theft was May Seymore Holden, a former accounts manager, who was accused of depositing Fullscope checks in her own account between January and May 2010.
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