Roach Manufacturing files suit alleging embezzlement

Monday, June 11, 2018

Roach Manufacturing Corporation filed suit against Edward M. Cooper Jr. and Osborn & Osborn, CPAs, PLLC on May 31, alleging that $4.5 million was embezzled from the company over the last decade.

According to the court filing, Cooper has been the sole accountant working with Roach on behalf of Osborn & Osborn for more than 20 years, providing expertise in bookkeeping, accounting, financial systems, financial reporting, tax matters, and tax filings. The suit states that "Roach has just recently discovered that Cooper through a betrayal of trust, deceit, manipulation and forgery, has unlawfully stolen and embezzled in excess of $4.5 million from Roach, beginning in at least 2007."

Roach Manufacturing Corporation, which develops conveyor systems for agricultural use, was formally launched in 1969 in Trumann. Osborn & Osborn began providing them services, advice, and expertise that year as well. Osborn & Osborn brought Cooper into the working relationship with Roach in the late 1970s or early 1980s.

The suit alleges that at some time prior to 2007, Cooper began requesting a few checks more than he actually needed from Roach to complete his duties, which included preparing dividend checks and estimated tax payment checks, in case he made a mistake in preparing checks. In 2017, Roach hired a new financial manager to share some of the day-to-day bookkeeping and accounting duties performed by Roach's accounting manager. Roach requested Cooper start providing actual bank statements, instead of a summary of the statements, so those statements could be reconciled in-house instead of having Cooper and Osborn & Osborn perform that duty. When Cooper did not provide the bank statements, Roach's financial manager began reviewing Roach's online bank balance but was unable to reconcile the balance.

The financial manager noticed an April 16, 2018, check made payable to "Ed Cooper" in the amount of $39,947.59, which appeared to have been signed by Roach's secretary/treasurer and Roach's president, but the suit alleges the signatures did not match their signatures and that they were confirmed to be forgeries. Further investigation showed that, while the majority of checks delivered to Cooper had been properly used, a large number of checks Cooper obtained from Roach were forged and made payable to "Ed Cooper" in siginificant amounts. A list of 70 such checks was attached to the suit, and they totalled over $4.5 million.

The suit alleges that Cooper "intentionally, egregiously and repeatedly manipulated, lied, defrauded, betrayed trust, forged, embezzled, and stole, at a minimum, $4,539,080.36 of the money and assets belonging to Roach over the course of many years."

Cooper and Osborn & Osborn are both listed as defendants in the suit. Roach is seeking a judgment for damages in an amount not yet determined but at a minimum of $4,539,080.36.

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