JONESBORO, AR (KAIT) - A Poinsett County company alleged in court that an employee of an accounting firm that worked on the company's bookkeeping and tax matters for over two decades embezzled $4.5 million from the company for over a decade.
According to a filing Thursday in Craighead County Circuit Court in Jonesboro, Roach Manufacturing Corporation filed suit against Edward M. Cooper Jr. and Osborn & Osborn, CPAs, PLLC.
Attorneys for Roach allege that Cooper managed the company's accounting business on behalf of Osborn & Osborn and "had become a trusted fiduciary of Roach upon whom Roach extensively trusted and relied."
"Roach has just recently discovered that Cooper through 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," attorneys allege in the suit.
The accounting firm brought Cooper into the working relationship with Roach in the late 1970's or early 1980's, with Cooper working on everything from monthly to quarterly financial reports and tax statements to preparing shareholder distribution statements, court papers allege.
The lawsuit also alleges that company officials began questioning Cooper's practices in the fall of 2017 when a new financial manager was hired. The situation escalated in mid-May when the financial manager was unable to reconcile the balance.
"In attempting to identify the imbalance, she noticed an April 16, 2018 Roach check made payable to 'Ed Cooper' in the amount of $39,947.59. The check appeared to have been signed by Roach's secretary/treasurer and Roach's president, however, the signatures did not seem to match the signatures of those officers," the lawsuit alleges.
The lawsuit also alleged that the check was endorsed to a personal bank account belonging to Cooper.
"Further investigation confirmed that the signatures on Check No. 244048 are indeed forgeries. Neither Roach's secretary/treasurer or Roach's president signed the check, and neither authorized anyone to sign their names to a check made payable to Cooper in any amount," the lawsuit alleges.
The company has also requested a temporary restraining order, preliminary injunction, breach of fiduciary duty, conversion, unjust enrichment and constructive trust against Cooper, while also filing a temporary restraining order, preliminary injunction, vicarious liability for the actions of Cooper, breach of fiduciary duty, negligent retention, negligent supervision and professional malpractice against Osborn & Osborn.
A temporary hearing will be held at 9:30 a.m. June 7 at the Craighead County Courthouse Annex.