Money laundering threatens payroll departments

A typical payroll professional, perhaps known for their sobriety and sometimes obsessive attention to detail, will no doubt be intrigued by news that the unlawful actions of fraudster Bernie Madoff’s payroll manager Eric Lipkin has highlighted the threat that money laundering poses for payroll departments.

The multi-billion-dollar fraud investigation saw Lipkin plead guilty on six criminal counts and admit to adding fake employees to payroll, lying to get a loan and doctoring documents.

Of course, anyone who really knows payroll will see that Lipkin may have missed a trick. What about hiding more dirty money in the provision of death-in-service and life assurance benefits for fictional employees? Payouts on their ‘deaths’ could then be collected. Genius!

On a more serious note, the Chartered Institute of Payroll Professionals (CIPP) feel compliance for the industry is paramount. Lindsay Melvin, chief executive officer of CIPP, said: “What we are reading in the news is evidence that money laundering is a real threat for our profession; pay cannot lose the integrity and respect that it has gained and at the CIPP we support any guidelines to help prevent the industry being brought into disrepute.”

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