Barnett Helzberg Jr. hopes to ‘start an industry’ with PhonyInvoices
Barnett Helzberg Jr. can tell horror stories of paperwork that isn't what it seems. He tells one about Best Buy paying a merchandise bill for $900,000. There's another involving publisher Conde Nast and a $7.9 million printing bill.
The problem? Both bills were fake, mailed by someone attempting to swindle the companies out of money. And it worked.
According to Helzberg, companies of all sizes are plagued by fake invoices every day. The invoices look real but are only attempts at deceiving companies into paying for a service or product that was never actually purchased.
That’s why Helzberg and David Cacioppo of emfluence started a new company, PhonyInvoices. Based in Kansas City, Mo., PhonyInvoices aims to help companies recognize fake invoices and discover how many they may have paid in the past.
Helzberg (left) said when he was running his family business, Helzberg Diamonds, which he sold to Warren Buffett in 1995, he would often be asked to write checks for bills that were unclear.
“I saw (a bill) for something called white pages, so I called the manager who authorized the payment and he said he thought it was for a phone book,” Helzberg said. “That’s when I realized that there’s a whole industry of these phony billers.”
PhonyInvoices works by sending fake bills to companies and testing them to see if they pay them.
“If any get paid we return the check or the money and alert them to the holes in their system,” Helzberg said. “It’s kind of an audit, really.”
Helzberg said many phony invoices are inside jobs, sent by employees to their own companies. He hopes employees knowing their company uses the service will be enough to deter some from sending the fake bills in the first place.
PhonyInvoices, which is funded by an investment from Helzberg, launched last year and has been beta testing and gathering data since. Helzberg said he and Cacioppo are the only employees at this time, but they hope to hire a full-time sales associate very soon.
Helzberg said he and Cacioppo have scoured the Internet for competitors but have yet to find anyone providing a similar service. “I actually hope to have competitors,” Helzberg said. “We hope to start an industry.”
As for starting a new business after running one that had been long established, Helzberg said it has been an adventure.
“It’s really fun because you’re starting with a blank piece of paper,” he said. “You’re learning every day.”
Credits: Photo of Helzberg from Ingram's Magazine.