Billy Hargrove could hardly hold his tongue listening to other roofing contractors talk about how they were duped, deceived, and defrauded by a one-time trusted employee.
Steve Little and Kyrah Coker of National Roofing Partners were about 20 minutes into their presentation at the 2022 International Roofing Expo in New Orleans about how they uncovered an elaborate web of lies designed to conceal the misappropriation of more than $1 million.
When technical difficulties stalled the PowerPoint presentation for a few minutes, Little turned to the audience of about 100 roofing contractors to ask about situations they’ve encountered.
Hargrove hesitated briefly and then told a story he hadn’t shared publicly before. Hargrove Roofing& Construction, the Louisiana-based company he and his brother, Clyde, started in 2017, was off to a successful start — growing to seven locations throughout the Bayou and into Texas. More than 90 employees helped generate $18.1 million in revenue, cracking RC’s 2021 Top 100 list for the first time. But not all of those employees had the company’s good fortune at heart.Not too long ago, the brothers discovered multiple employees on the sales team conspired to siphon away commissions for sales they didn’t close.
On paper, Hargrove explained, they funneled jobs sold by his brother — one of the co-owners, who did not earn commissions — but still approved commissions for that sale as their own. In all, they bilked the company of more than $40,000 in fraudulent commission before they were exposed.
“He was a friend, and we didn’t catch it right away because those were real jobs we were completing. But (the perpetrator) didn’t touch any of those jobs,” Hargrove said.
The Hargroves fired both the sales manager and other employees involved. They contemplated prosecution, but didn’t and were paid back — after three years. As a result, they shored up policies and implemented internal controls. including company gas cards.
“Commissions are a huge vulnerability, and it’s an easy way for them to get creative,” Hargrove said. “If you have a lot of salespeople with commissions, and you have one person approving commissions, it’s going to get stolen.
"And for gas cards, find the right company that will only allow gas spending. You can edit what employees can buy."
He said he didn’t want to stay quiet about it because if it happened to him, he believes it’s happening to others. It’s exactly why Little and Coker said they’re now telling their story to any roofer who will listen.
“The more often we let it go, the more often they go somewhere else and do something similar,” Little said. “If you pick up just one nugget from what we’re sharing or change one thing to minimize your risk, we think it’s worth the time and energy.”