Tar Heel Tattler - January 2006

Furniture factory didn't know what it was missing
By Irwin Speizer

Johnny Cash once had a hit about a Detroit autoworker who for decades smuggled parts out of the plant in his lunchbox until he had enough to build his own Cadillac. That guy had nothing on eight former employees at Bassett Furniture Industries’ Mount Airy factory. They’re accused of taking thousands of pieces of finished furniture from their plant.

According to an investigator with the Surry County Sheriff’s Office, about 1,250 pieces of new furniture — beds, dressers, nightstands, tables, chairs — vanished each year for at least the last six. No one at the company’s Bassett, Va., headquarters even knew the stuff existed until an anonymous tipster called last spring.

The former workers — including the plant manager and other top supervisors — were arrested in November. Sheriff’s detective Steve Halasz says investigators focused on the last six years but found evidence the scheme might have been going on more than 15. With the industry’s tight margins, how could so much furniture disappear year after year without someone noticing? “It was a very elaborate scheme,” Bassett spokesman Jay Moore says. “Some of the people responsible for preventing this from happening were involved.”

Even annual audits didn’t show that the plant was making more furniture than it was shipping. The scope of the problem became apparent soon after investigators from the sheriff’s office, the State Bureau of Investigation and Risk Management Associates, a Raleigh private security company, began looking into it in April. Based on the initial investigation, the company fired the eight employees, most of whom had worked there more than 15 years. Each was charged in November with six counts of conspiracy to embezzle. So far, 300 pieces have been recovered.

The same month the arrests were made, Bassett announced it was shutting down the Mount Airy plant and laying off 300 workers by the end of 2005. The decision was based on the need to reduce manufacturing capacity, not the problems at the plant, says Moore, who noted that the thefts represented less than 1% of the factory’s gross revenue. But faced with the threat of cheap imports, “it is tough enough these days for a domestic wood-manufacturing plant to compete without something like this being a distraction.”