In what is nearly comical for the type and nature of incident, telecom giant Avaya paid salary to an employee who never worked. Investigations reveal that it was a simple case of not deleting the name from payroll file.
According to press reports, When Anthony Armatys was hired for a six-figure job with Avaya in 2002, he filled out all the necessary paper work with the companys’ human resources and payroll departments. But when he changed his mind and decided not to take the job with the telecommunications giant, the payroll department never got the memo.
So Armatys started getting paid as though he was an employee. Part of his salary went into a retirement account and the rest was direct deposited. The only problem was that he never alerted the company to the error. By the time Avaya found out what had happened, Armatys had collected nearly a half-million dollars, using the money for everyday expenses, Somerset County Prosecutor Wayne Forrest said today.
Officials caught up with Armatys when he tried to make an early withdrawal from his retirement account. Penalty fees aside, the withdrawal sparked an investigation that led to criminal charges. The 35-year-old Armatys, pleaded guilty to second-degree theft.
Under questioning from defense lawyer Andrew Hood, Armatys said was hired in September 2002 as a senior systems analyst/systems architect and filled out the necessary paperwork for human resources and payroll records. His pay was to be $107,000, officials said. At time time he was hired, Armatys was living in Palatine, Ill., and would have worked in an Avaya facility in Illinois, officials said. However, at the last minute, he decided not to accept the job because of a contract he had with his then-employer, Forrest said.
At the same time, Avaya had recently installed a new computer system and although it deleted Armatys from human resources files when he changed his mind, it failed to drop his name from the payroll system, Forrest said.
As a result, Armatys was paid as though he was a regular employee, but never alerted the company to the error. Checks were deposited into his account between October 2002 and February 2007, when Avaya discovered the theft.
“He treated it as regular disposable income available for him to use on a routine basis,” Forrest said. An employee retirement savings account, administered by Fidelity Investments, was part of Armatys’ benefits package, and Avaya had made weekly contributions to that account.
When investigators and auditors at Avaya discovered payroll checks had mistakenly been deposited into Armatys’ account, the company began investigating and contacted the authorities, resulting in a nearly yearlong investigation by the prosecutor’s Special Investigations unit, Bernards detectives and Avaya Security.
There is a human behind every IT incident. Strong processes and reconciliation procedures must be built by business when data interchange between business applications is not automated.