In a striking case of corporate fraud, Barbara Furlow-Smiles, a former global diversity executive at Facebook, now Meta Platforms, Inc., was sentenced to five years and three months in prison for stealing a total of more than $5 million from those companies.
In 2023, she admitted to orchestrating an elaborate scheme that defrauded the company of over $4 million.
In 2023, she admitted to orchestrating an elaborate scheme that defrauded the company of over $4 million.
Utilizing a network of fraudulent vendors, fictitious charges, and cash kickbacks, Furlow-Smiles manipulated her position and access to company resources to fund a lavish lifestyle.
Role and Responsibility of Furlow-Smiles
Barbara Furlow-Smiles served as Lead Strategist and Global Head of Employee Resource Groups and Diversity Engagement at Facebook from January 2017 to September 2021. In this capacity, she was at the forefront of developing and executing Diversity, Equity, and Inclusion (DEI) initiatives. Her role provided her with significant autonomy, including access to company credit cards and authority to approve vendor invoices. She was working with Nike in a similar role before joining Meta.
The Fraud Scheme Unveiled
Furlow-Smiles exploited her position to initiate a sophisticated fraud scheme. Frauds where employees abuse their positions to commit frauds are termed Occupational Frauds. She operated the whole scheme through two primary channels:
Fraudulent Expense Reports and Payments to Associates
Furlow-Smiles linked PayPal, Venmo, and Cash App accounts to her Facebook credit cards. She then used these accounts to transfer funds to friends, relatives, and other associates under the pretense of paying for goods and services purportedly provided to Facebook.
These individuals did not render any services or provide any goods to the company. In most cases, they were unaware that the funds originated from Facebook.
To cover up these illegitimate charges, Furlow-Smiles submitted falsified expense reports, claiming that the payments were for legitimate business activities such as event swag or marketing services.
After receiving the payments, these associates returned the majority of the funds to Furlow-Smiles, often in cash, either in person or through mail services like Federal Express, sometimes concealed in items such as T-shirts.
Fraudulent Vendor Contracts
The second channel was the vendor contracts. Furlow-Smiles facilitated the onboarding of vendors owned by friends and associates, ensuring they received contracts from Facebook.
She then approved inflated and fraudulent invoices from these vendors. After Facebook paid these invoices, the vendors kicked back a portion of the money to Furlow-Smiles.
Accomplices Network of Furlow-Smiles
To sustain her scheme, Furlow-Smiles recruited a diverse group of individuals, including friends, relatives, former interns, nannies, babysitters, a hair stylist, and her university tutor. These accomplices played various roles in receiving payments and returning kickbacks. Additionally, she manipulated company funds to benefit herself directly, such as paying nearly $10,000 to an artist for speciality portraits and over $18,000 in preschool tuition fees.
The ill-gotten gains funded a luxurious lifestyle in California and Georgia. The extent of the fraud, totalling over $4 million, underscores the depth of the deceit and the sophistication of the scheme.
You May Also Read
Legal Proceedings and Corporate Response
U.S. Attorney Ryan K. Buchanan condemned the actions of Furlow-Smiles, highlighting how she betrayed the trust placed in her and undermined the critical DEI mission she was entrusted with. FBI Special Agent in Charge Keri Farley emphasized the bureau’s commitment to ensuring that such acts of greed are met with accountability.
Meta, the parent company of Facebook, cooperated fully with the investigation, providing valuable assistance that was crucial in unravelling the fraud.
Barbara Furlow-Smiles, also known as “Barbara Furlow,” 38, of Atlanta, Georgia, has pleaded guilty to the charges. Her sentencing is scheduled for March 19, 2024, before U.S. District Judge Steven D. Grimberg. The case is being prosecuted by Assistant U.S. Attorneys Stephen H. McClain and Bernita B. Malloy.
This case serves as a stark reminder of the potential for abuse within corporate structures and the importance of robust internal controls to prevent and detect fraudulent activities.
