This is the kind of story that feels almost unbelievable, until you realize how often versions of it actually happen.
A former executive with the Atlanta Hawks was recently sentenced to more than three years in federal prison after embezzling millions of dollars from the organization. But while the headline may sound like a one-off scandal, the underlying issue is far more common and, frankly, far more relevant to everyday businesses.
Because this isn’t really a sports story. It’s a controls story.
The Case: Millions Lost From Inside the Organization
According to federal prosecutors, former Hawks executive Lester T. Jones Jr. stole approximately $3.7 million over several years through fraudulent expense reimbursements and misuse of corporate credit cards.
Jones, who worked in the team’s accounting and finance department and later became a senior vice president, had significant control over financial systems — including expense approvals and corporate card programs. That access allowed him to:
- Submit fake reimbursement requests
- Charge personal expenses to company accounts
- Conceal transactions through internal processes
The funds were used to support a lavish personal lifestyle, including luxury travel, high-end retail purchases, jewelry, and entertainment expenses.
In April 2026, he was sentenced to three years and five months in prison and ordered to pay nearly $3.9 million in restitution.
The Bigger Issue: Insider Risk Is the Hardest to Catch
What makes cases like this so damaging isn’t just the dollar amount — it’s where the risk comes from.
This wasn’t an external hack or an obvious fraud attempt. It was an insider with:
- Authority
- System access
- Knowledge of controls
- The ability to override or bypass processes
As investigators noted, the case highlights the risk of “insider threats” within organizations, where trusted employees exploit gaps in oversight.
That’s where many businesses — especially growing ones — are most vulnerable.
How These Schemes Actually Happen
While the scale of this case is extreme, the mechanics are not.
Fraud schemes like this often rely on:
1. Weak Segregation of Duties
When one person can:
- Approve expenses
- Submit reimbursements
- Access accounts
…it creates a built-in opportunity for abuse.
2. Lack of Oversight
Even in large organizations, expense systems can go unchecked if:
- Reports aren’t regularly reviewed
- Documentation isn’t verified
- Patterns aren’t monitored
3. Trust Without Verification
Many businesses rely heavily on trusted employees, especially long-tenured or senior staff.
But trust without verification is where problems start.
Why This Matters for Small and Mid-Sized Businesses
It’s easy to look at a professional sports franchise and assume this doesn’t apply.
But in reality, smaller businesses may be at even greater risk.
Why?
- Fewer controls
- Smaller teams (less separation of duties)
- Informal processes
- Less frequent audits
And while most businesses won’t face a $3.7 million loss, even a fraction of that can be devastating.
The Tax Angle Most People Don’t Think About
There’s another layer to cases like this that often gets overlooked: taxes.
When embezzlement occurs:
- The stolen funds are typically considered taxable income to the individual committing the fraud
- The business may be able to claim a theft loss deduction, depending on timing and circumstances
- Recovering funds (like restitution) can create additional tax implications
These situations can quickly become complex, particularly when losses span multiple years.
How Businesses Can Protect Themselves
The takeaway here isn’t fear — it’s awareness.
A few key steps can dramatically reduce risk:
Separate Financial Responsibilities
No single person should control:
- Expense approvals
- Payment processing
- Reconciliation
Review Expense Activity Regularly
Look for:
- Unusual patterns
- Repeated vendors
- High-dollar reimbursements
Require Documentation
Every reimbursement should have:
- Receipts
- Clear business purpose
- Independent approval
Conduct Periodic Reviews
Even informal internal reviews can catch issues early.
The former Hawks executive’s case is a reminder of something many business owners don’t think about until it’s too late:
The biggest risks often come from inside the organization, not from outside it.
Strong financial controls aren’t just about compliance. They’re about protecting the business you’ve built.
Because whether you’re running an NBA franchise or a small local company, the principle is the same:
Access without oversight is always a risk.
