Embezzlement @ Lund Boats !

[rtmg]

Wow, just seen on news that the controller @ Lund in NY Mills has been charged with taking close to 2 million buckoroo's.
President of company claims it will have no effect on product or customers........ could this explain why Lunds have gone sky high with prices ? ;-)

Good Fishen
Rob

[Pitts]

I saw that to but since Genmar is the largest producers of recreational watercraft I doubt if this has affected any prices especially when he was just charged today. And it was 3 million that was embezzeled by the vice president of Lund by writing checks to 3 different Co's.

See ya on the water

Pitts

[MiFish]

Totally unbelievable and unexcusable in todays computerized world. How can corporation as large as Genmar NOT have an accounting system that would prevent an internal financial breach of this magnitude happen???? In todays world the only person you don't audit is God......and we are watching him. If they never missed 3 million bucks till now, what others screw-ups are yet to be discovered????? Makes you wonder doesn't it. POOR fiscal management at its worst. Needless to say, the loss 3 million bucks is a really healthy lesson to to know your accounting system isn't worth a leaky rivet. A Lund sales rep that got caught on his expense account should be laughing his butt off right about now.

[FISH 24 7]

Where did you see the info on this? Searched Star Trib and Pioneer Press and found nothing. Any help?

Thanks

Mark Gilbertson
NPAA #556

[Mattman]

From yesterdays Fergus Falls Daily Journal:



Lund executive allegedly stole $1.89 million.


By Amanda Peterson
The Daily Journal

Published Monday, March 26, 2001 4:21 PM CST

The Vice President and Controller of Lund Boat Company in New York Mills is expected to be charged today with stealing about $1.89 million from the company by writing checks for personal items.
Gary Duane Schultz, 50, of New York Mills, will face two felony counts of theft, each carrying a maximum penalty of 20 years in prison and a $100,000 fine.

The charges are expected to be signed by an Otter Tail County judge today. No first appearance for Schultz has been scheduled yet, court officials said.

Chief Brian Nelson of the New York Mills Police Department received a report Tuesday from the security director of Genmar Holdings, Inc., parent company of Lund Boat, that a substantial amount of funds were missing from Lund Boat Company.

An attorney for Genmar Holdings said Schultz was fired last week after company officials were informed of the expected charges.

According to the complaint, since 1994 105 company checks had been written by Schultz to Jerry's Sports Center, Inc. for a total of about $1.48 million. Between December 1998 and May 1999, seven company checks totaling about $353,280 were also written to Oneita Industries by Schultz, the reports said. During February and March of 2000, Schultz also allegedly wrote two Lund Boat account checks totaling nearly $58,796 to Alpha Company.

As Vice President and Controller of Lund Boat Company, Schultz was the Chief Financial Officer of the company.

According to the reports, Lund Boat has never purchased materials or services from Jerry's Sports Center, Oneita Industries or Alpha Company.

During a meeting Wednesday with Nelson and consulting account Adam Kransnoff of Arthur Anderson Company, Schultz allegedly admitted he had been writing checks on the account of the Lund Boat Company for personal items, including rifle scopes from Jerry's Sports Center. The complaint stated Schultz paid for the items with Lund's corporate checks and then sold the scopes to various sources and kept the money. The scopes were allegedly sold through Jerry's Gun Shop in Pelican Rapids and to other individuals since at least 1994.

The checks written to Oneita Industries and the Alpha Company were allegedly used to purchase merchandise to be used at Schultz's business The Embroidery Studio in New York Mills, the court complaint said.

On Wednesday, Schultz also allegedly handed Nelson an envelope with $10,970 in cash, the reports said.

Lund Boat Company Larry Lovold said business was operating as usual and there was an active investigation taking place.

[cisco]

Hey, isn't it at this site where I continuously read -- "You get what you pay for"?

I don't think he's yet convicted, but just who paid for his contribution to Lund's operating costs?

[Hans]

Let me get this straight. You're mad at Lund (the company) because some dump huck employee stole money? Gimme a break! The loss will be covered by insurance.

Hans

[THUMPER]

The guy must be mentally unballanced........He had to know he was going to get caught if he was sane. We had a bank manager close to here that did the same sort of thing a few years ago....Case never went to trial because he had a brain tumour. He died shortly thereafter. Keep us posted as to the outcome.

[Ric]

Don't you get it, the phrase "You get what you pay for" has never been in reference to the same product. No one here has ever suggested that you pay more for brand X boat when you can get it cheaper down the steet. However, it clearly applies when comparing the reputable brand X to an imitation "cheap" brand Y.

[twogun]

Lund might be able to recover some of the money. This sort of thing happens every day through out the world, just to bad it happend to one of the best boat builders. I heard he's going to work for Alumacraft.

[What????]

nm

[Dutchman]

This type of corruption is an on going issue across the majority of the world bussiness scene. It's WHITE COLLAR CRIME and very few of the offenders ever do time to match the crime. So if you're wondering why your insurance keeps increasing and your own bottom line is diminishing it's inpart because of crimes such as this. Ever wonder who pays for your CEO's lavish vacations??????

[jester]

Calculate this. 1.89 Million or so devided by the number of boats sold by Lund since 1995...
This will give a quick and dirty figure for individual contribution by each Lund buyer to the ineptness of the company.

Of course this does not take into account all of the variables that exist in this situation. Can you assume that a Pro V owner was stuck for more than his "fair share" of this embezzlement? I deliberately used 1995. When did Lund start raising the price of boats to compensate for these costs? All this speculation does not take into account the timing of the thefts. If, for instance, most of the money was stolen in 1998 or 1999, then the per unit contribution of Lund buyers in 1999 or 2000 should be higher to cover the increase in "costs".

The endless Lund mantra seen here on WC is "You get what you pay for"....Well, did you? Somebody got some cheap rifle scopes- I suppose that guy is happy.:-)

[BigBass]

All I know is... Can I apply for his job? Sounds like a great "perks" package!

[Hawgeye]

I'm sorry that those of you think that this somehow diminishes the quality of the product. What it tells me is that a company that had poor accounting practices did not make a deserved profit for making a top notch product. For making this quality product, the company deserves to make a good return.

If the product was overpriced, there would not be so many people buying them. I guess those of us who like Lund, defend Lund and decide to buy Lund again are complete idiots, stupid and deserve the piece of crap that we buy. For some reason the boats that I have owned over the years that were Lund must have been flukes since they did not sink or fall apart. I can't imagine how they even never leaked?! MUST BE A FREAK OF NATURE!

If you would like to know how much it cost a buyer, it is not even a factor. If Lund made 1000 boats a year for 6 years it would cost $315 per boat to cover 1.89 million. I think that Lund probably made $315 less of a profit. My guess also is that they made more than a thousand boats a year.

[Hans]

The CEO pays for his vacations, just like the janitor does.

Maybe we should adopt the communist model where there is no CEO, just a committee of workers who decide things?

Who pays for your lavish vacations?

Hans

[Backwater Eddy]

Let he who has never sinned cast the first stone......

[JohnN]

Having just read all the posts, and without taking a position as to the accused's guilt or innocence, it appears to me that many who posted here aren't bothered by the inconvenience of a presumption of innocence prior to a conviction? If that smells like a bit of sarcasm, it is. Particularly in light of a lot of nonsensical and self righteous drivel frequently posted about the Second Amendment, and so on. Seems concern about "rights" may just be a function of whose ox is being gored. Ok, that's my bullet for the day. JN

[dickeyd]

What island have you been living on. Many CEO's dont pay for their vacations out of pocket or buy their cars. The company pays for it, (i.e. you and me). At least its been that way in all the companies I've worked at. What makes them anymore valuable than you and I. They are replaceable just like you and I. But because they control the purse strings, they control their perks too.

It funny how Americans look so casually at white collar crime. Usaully a slap on the wrist is acceptable. Just like the S&L scandal of the 80's that cost "us" taxpayers billions. G Bush's son and the guilty walked away without any repercussion.

I'd be surprised if the controller at Lund gets in too much hot water. No doubt they let him go with a nice severance package to boot. Just speculation.

[SUPPLY AND DEMAND???]

I don't see how your explaination has anything to do with reality. This is just Supply and Demand in action. They're just getting the price that the market with bear!!!!!!

[SUPPLY AND DEMAND???]

I don't see how your explaination has anything to do with reality. This is just Supply and Demand in action. They're just getting the price that the market with bear!!!!!!

[Hawgeye]

You also have to keep in mind that any perks like that are heavily taxed. They do not get those lavish vacations free as you eluded to.

If he is guilty he deserves 20 years! Unfortunately, you can murder someone and get out in 3-5 or go scott free if you are OJ.

[Jim O]

This whole thread is incredible. Its starts out stating that Lund suffered from theft by a comptroller, and proceeds to bash the company and all executives in the world. Its seems that we have a bunch of angry anxious folks on the board who look for any chance to inject their angst onto any event posted, relevent or not. Regarding the "consumer" paying for this misdeed, it is most likely that this amount was being floated in the massive accounts recievable that that Lund must have. They obviously thought they had in "in the bank" of A/R so they would not have priced it as a loss and therefore not seen it as a cost. I grew up in a world of handshakes and the value of a man's word, I have developed a touch of cynicism, but those values still hold true. This nasty event does not speak for all. Take it for a bad apple that is about to pay his dues. You can bet, he will do time.
My 2 cents,
Jim Ordway

[rtmg]

GEE.....didn't mean to start a firestorm or anything. Just posted what had happened @ Lund. The reference to "costs" was a tongue in cheek comment (thats why the smilely after it)
Lund makes a excellent product ( I'm a very happy Pro V owner)
If they made a extra few bucks off of me, I really don't care.
When I'm out in big water getting the "stuffing" beat out of me, I am very greatful that Lund has these products for all of us to purchase .
Just My thoughts
Rob

[Hans]

LAST EDITED ON Mar-27-01 AT 02:36PM (CST)[p]CEO's don't control their own perks.

Their renumeration is set by the Compensation Committee, non-employee members of the board of directors, accountable to the stockholders.

They make their decisions based on what they think it takes to hire/retain the "best person" for the job.

Hans

[Al]

Quite the contrary on their vacations being taxed. All they have to do is "document" some business activity and the company can pick it up. If Joe Lund goes to California and registers his name on the visitor log of an aluminum mill, has some sort of meeting, his vacation can be counted as a business expense. Or better yet, how about all the dealers who went to the OMC Dealer show in Dallas a year ago. They can charge that to their business and see the sights in Dallas. If you think a CEO pays tax on it, you've been misguided, or someone needs to fire his accountant and tax attrny.

[Hawgeye]

You are correct. However, I was only addressing actual bonus trips. If certain trips are offered as a 'bonus' the value is considered taxable.

[Hawgeye]

Well said rtmg.

[AquaMan]

The loss will be amortized like any other business loss over a 5 or 10 year period.

However, none of that has anything to do with the quality of the product. The CFO did not build the boats.

AquaMan~~~~~~~~~~~~~

.·´¯° --- "It all begins and ends at the water's edge"

[Bill Gates]

What this loss speaks to is the inadequacies of the process's and systems at Lund. From accounting to hard manufacturing, they been running with smoke and mirrors, and now naked emperor has been exposed!
P.S. Buy a Crestliner

[Now that is funny!]

Yeah right! Like Crestliner is the best! HA HA. Both owned by Genmar, I suppose that because one crooked loser sat in an office chair at Lund, the boats are junk....? Now that wasn't even a real good joke!

[Mifish]

Hans

For your information non employees on the compensation commeittee are country club buddies of the person they give the perks to. Wake up man you live in a dream world, ALL NON EMPLOYESS SERVING ON CORPORATE BOARDS ARE NOTHING BUT PAWNS OF THE CEO AND THE PRESIDENT.

[AquaMan]

It is a pattern that repeats it self over and over around the world every day. There are reports all the time about a bank employee or store manager or Casino President getting busted for theft. There are many still that you have not heard about because they never got caught or have yet to be.

In this case, as in most others, the person is well trusted, has control and can see all the opportunities. They have control. They begin small, little purchases that are easy to hide. Because the loop hole is so easy and they are not caught at first, they continued. Larger purchases with higher frequencies. The fear of getting caught is long gone by now and replaced with a sort of thrill or living on the edge and greed. Fear dissolved somewhere between the excitement and the desire for more product.

I lost one of my companies to a crooked CFO and let me tell you, it is not easy to get your arms around the problem since they are trusted and in total control of the finances. They can hide the shortages for quite a while. Eventually those shortages can no longer be rolled over inconspicuously due to their sheer size and the house of cards comes down. Our adit firm, Aurther Anderson, did not even catch it til it was too late. It does not mean the company or its products were bad. In some cases the company cannot afford the write off and in others it is absorbed into the amortized P&L. However, the insurance Co's DO NOT cover the bulk of the loss, the company's consumer will. Since the stolen funds are typically spent on intangible and non-recoverable items, restitution is minor and futile. In a word, it's gone! Poof!

Lund can sue the employee and secure his assets for resale to help recover some of the loss, but I doubt they will get more then 20% back from that sale and the insurance company. I didn't.

Regardless, this has little to do with the quality of the product. This was one man in a large company. It can happen to any one of them...

Give it a rest!

AquaMan~~~~~~~~~~~~~

.·´¯° --- "It all begins and ends at the water's edge"

[Dutchman]

Hans please tell me the last time you knew a janitor that took a lavish vacation? As for me my last "Lavish Vacation" was a six pack and a bag of pretzels.... :)

[Correction]

1.89 Million over 8 years
It is a sad deal!

[Dubbayah]

That is fuzzy math!

[Correction]

Not unless Alumacraft is now producing Minnesota license plates!
He be going to Stillwater! (prison)

[Math Done]

$13.50 per boat.
140000 boats and 1.89 million embezzeled.

[Morre Math]

$13.50 per boat....is what this cost.

[T-Mac]

Unfortunately, John, Gary Schultz has confessed.
Unbelieveable to me that he would commit this crime. I know Gary and he has been with Lund forever. It makes me sick!
Genmar audits the books every year, but, of course Gary was the man in charge of paying the bills. The bills were paid to legitimate companies. Pretty hard to catch that until a pattern develops over a period of years.
I feel most sorry for Larry Lovold (Lund President), who got "stabbed in the back" by his long time friend and employee when Gary did this.
The best thing that can be said is :Lund is alive, healthy, busy as can be.. and most of all...a BETTER company than they were last week, prior to Gary Schultz's firing.
What Gary Schultz did was rob from his friends and a great company. He screwed Lund!
What this has to do with quality of the product is NOTHING!
There is no connection.
I will comment no more on this subject, other than it is a rotten deed that was done to Lund!

[Mike]

I can hardly for open water so you people can go fishing instead of making senseless posts about something that has nothing to with the cost or quality of the product in question.

GET A LIFE!!!!!

If deep down your Lund bashing is just poorly disguised envy, I can assure you, they don't cost very much more and they're worth it.

[cisco]

Hey, that's a seven-course meal.

[Enquiring minds want to know...]

Where did you get these sales figures? How many years of sales was this? Is Lund SELLING 20,000 BOATS PER YEAR? You better recalculate because I think you flunked this test...

[Mattman]

Well said Aquaman! This happened at the bank my father ran. Little by little money got redirected and it took a while for a pattern to develop and be noticed and then carefull scrutiny after it got noticed to make darn sure it was right. And then a call to authorities and their investigation. The person that was doing it was a long time trusted employee and a family friend.

"We" didn't pay for this. "Their" profits were just a little smaller. It probably was never even a loss. $2 million is a lot of money but not here. Its not like the money dissappeared over night. We're talking 7 years here.

[JeffC]

Now I know why my seats are on back order. And that they cost $250.00 each. But I wouldn't own any other kind.

[Correction]

Lund does not make the seats.

[Al]

I'm telling you they run it under "business convention". Last time I was in San Juan, there was a telecom conference for higher ups in companies. Every high scale hotel was booked all week. In the meeting rooms, there were maybe a dozen or so attendees. 5 rooms, maybe 60 people. Where do you think the other guys and their wives were? It's not really that hard to figure out. Their companies picked up the tab as "training".