Mr. Leopoldo was an Administrative Assistant in the grocery department at Caprabo, a very well-known Spanish supermarket chain. He contacted a very small plastic bags supplier, Maya de Serveis SL, and agreed with it that it would pay him 40% of the value of any orders for bags placed by Caprabo. As a consequence of the bags ordered, supplied and invoiced to Caprabo over a period of two years Mr. Leopoldo obtained commissions of close to €8 million.
Going somewhat beyond his usual duties and responsibilities the orders were initially processed and introduced into the supply chain system at Caprabo by the very same Mr. Leopoldo. Every single acceptance and validation was obtained from the line manager within the grocery department and then from Finance, and then from Treasury. From each one of these departments at least two people validated the order and passed it on to the next department. As a result every single invoice was duly registered, validated, accounted for, and signed by all the right people, and then paid.
No one noticed that the supply of plastic bags increased 400% in the period of two years. No one realised that it was Mr. Leopoldo who for two years made almost daily orders for bags from his computer at Caprabo in such astronomical numbers. Moreover the supermarket chain was not able to prove how many of those plastic bags were actually supplied to it, and so could not say with certainty that it had not had the goods it had paid for.
Me Leopoldo was prosecuted. The High Criminal Court of Barcelona took the faintly surprising view that the “fraud”, if such it was, was so open, clear and obvious (and effectively signed off by so many other responsible people) that it lacked the element of deceit or misrepresentation necessary to constitute a criminal fraud. Nobody was deceived at any stage, it found. Mr Leopoldo therefore walked free.
The importance of a compliance check is obvious and the need to check the reality in addition to formalities is key, as well. Mr Leopoldo can regard himself as lucky not to be convicted, but it is not hard to imagine that Caprabo would have taken a harder line. The wanton acquisition of surplus plastic bags for personal gain would surely constitute good grounds for dismissal, especially if he did not declare internally his arrangement with the supplier.