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$4M Vendor Fraud: Meta Global Exec Pleads Guilty

The Global Diversity Executive for global titan Meta has pleaded guilty to stealing from the tech giant. Over four years, she exploited a leadership position to siphon more than $4 million through fraudulent vendors, fictitious expenses and vendor kickbacks.

Court documents state that Barbara Furlow-Smiles “knowingly devised and intended to devise a scheme and artifice to defraud Facebook, Inc., now known as Meta Platforms, Inc., and to obtain money and property by means of materially false and fraudulent pretenses, representations, and promises, and by omission of material facts …”

As program manager, Furlow-Smiles held company credit cards and had the authority to submit purchase requisitions and approve payments for authorized Facebook vendors. The court documents say she “caused Facebook to onboard several vendors … owned and operated by friends and associates.” She would approve purchase requisitions and subsequent payments.

Furlow-Smiles then approved payments for goods and services not provided to the company or where vendors inflated invoices beyond the actual value of the delivered goods or services. She recruited numerous individuals to participate in her scheme. Recipients would kick back fraudulent proceeds to her in cash.

She linked Meta Paypal, Venmo and Cash App accounts to her corporate credit card. She made payments to friends, relatives and others through the accounts, and they returned most of the money to her in cash. Some of the participants were unwitting. She covered up many payments through falsified expense reports.

How It Happened: Removed “Bottlenecks”

Much of the fraud involved the transmission of interstate wire communications in violation of Title 18, Section 1343 of the U.S. Code. Suspicion arose when Furlow-Smiles paid an individual through Paypal charged to her corporate card in the amount of $14,000.

We trust readers already see some of the problems in the above description. How could she do all this at a huge corporation that should have a well-developed set of controls? Segregation of duties is a fundamental internal control. However, according to one source, her managerial position in the company came with financial autonomy to encourage initiative to carry out her mission without bottlenecks. She exploited the lack of controls to enrich herself significantly in just four years.

The story highlights the criticality of internal controls and a sound vendor onboarding process. While everyone may be able to sympathize with “removing bottlenecks,” when it comes to financial operations, lifting standard reviews and verification processes is fraught with danger. If specific controls impede, devise more expedient but compensating controls. Removal of controls is an invitation to fraud exploitation.

Learn how VendorInfo can help you with vendor onboarding, including critical validations and bank account verifications—contact us.

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