August 2, 2014

Elyria
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Invacare Corp. may be missing $5 million

SEC filing states money may have been embezzled from offshore operations

ELYRIA — Invacare Corp. is investigating a potential embezzlement at one of its offshore facilities that could total about $5 million, according to documents the company filed with the Securities and Exchange Commission on Friday.
The company said in the SEC filing that it had only recently became aware of the potential embezzlement but didn’t specify which country the incident occurred in. The Elyria-based company operates facilities in Australia, Canada, China, Denmark, Germany, France, Mexico, New Zealand, Portugal, Sweden, Switzerland and the United Kingdom.
The SEC documents — filed by Invacare Chief Financial Officer Gregory Thompson — said the matter is being investigated by “local authorities,” while Invacare itself is “currently performing both an internal audit and a forensic audit into this situation.”  The location of the authorities could not be determined from the SEC filing.
Invacare officials suspect the possible embezzlement occurred between January 2005 and March 2007, the SEC filing said. 
“(Invacare) carries insurance on employee dishonesty in the amount of $5 million and believes it will recover the entire amount of that policy after completion of the necessary paperwork,” the document said.
Thompson also said in the document that the company does not believe the possible embezzlement will have a significant impact on its finances or operations.
Invacare officials believe they had “appropriate internal controls” in place, but those safeguards were “circumvented by collusion,” the document said.
Invacare officials could not be reached for comment late Friday.
Invacare, which employs 1,200 people at its Elyria operations, produces orthopedic, prosthetic and surgical appliances and supplies for the health care market.
Earlier this year, Invacare officials had braced for lower earnings in fiscal year 2006, but they hoped that restructuring — including the closing of several plants around the world — would offset any losses. 
The company cut 225 of its 750 jobs at its Taylor Street facility in February 2006, and shifted parts of its operations to China and Mexico.
Contact Shawn Foucher at 329-7197 or sfoucher@chroniclet.com.