Sunday, August 1, 2010

Pilferers prey on the faithful. Too much trust makes church embezzlement common

Delaware worshippers often speak of going to church to become better people, but this spring Christians got a wholly unexpected lesson in lying and theft.In May, at St. John's Methodist Church in Seaford, secretary Penny L. Kimbrough was arrested and charged with unlawfully writing checks to herself and getting a credit card by using the church's name.That same month at Christ Church Christiana Hundred, Shannon G. Tuso, an administrative assistant, was arrested for taking money from the Greenville Episcopal church, after being convicted of embezzling from a bank three years earlier.And at First Presbyterian Church of Newark, there is ongoing frustration over Carol H. Lind, a former administrator, treasurer and a respected choir member. She pleaded guilty to theft in a plea bargain in July 2009, but her restitution hearing has yet to be held in Superior Court.As a result, some members of the church have difficulties moving on, not knowing if the congregation will receive any of the missing $60,095 revealed in a forensic audit, said the Rev. Steve Brundage, the pastor.People have been hoping for "a public accounting of what, if anything, she will repay," he said. "My judgment is some people need that to get to forgiveness."The issue of church embezzlement extends beyond Delaware and is so pervasive that one management expert fears it could be the next big scandal in America's churches."The issue needs the attention of churches," said Charles Zech, director of Villanova University's center for the study of church management. "They're so trusting, they fail to put in business protections that keep them from being taken advantage of."A Villanova survey of Catholic dioceses in 2006 found that financial officers were almost as worried about parish fraud as suits over sexual abuse."We found an enormous amount of concern by those who watch over church funds," Zech said. On a question about embezzlement, 85 percent of responding churches said they had been victimized.But it's not just churches that need accounting protection. In Delaware, bonds of trust have been broken because of embezzlements across all strata of society -- banks, government, supermarkets, volunteer fire companies, law firms, beauty salons and churches.It's a crime of opportunity by people who present themselves as the best folks in the world, then take advantage of the trust they have earned, said U.S. Attorney David Weiss. With access to finances and little oversight, they begin to help themselves to money because of greed, addiction or financial pressures. Take Bernard Nowakowski. He slipped a check into his pocket as he left work one day at United Electric Supply near New Castle and was able to cash it. That led him to take more as he needed it to feed his gambling addiction. After nine years and 350 stolen checks, he'd taken $500,000.
When he was caught, he said he was relieved and sobbed in court, apologizing "for all the hurt I've caused."
FBI crime statistics show that Delaware has one of the highest per-capita rates of embezzlement.For instance, there were 291 reported embezzlements in Delaware in 2007 when the state had a population of 864,764, according to the FBI. In California, a state whose population is 42 times that of Delaware, there were 2,333 similar crimes that year. I am unaware of anything unique to Delaware that makes us more susceptible to this type of crime," said Weiss. But without question, embezzlement is a "substantial problem" in Delaware, he said. In recent months, some high-profile embezzlements were resolved in Delaware:
• William Hitch, head of finance, stealing $151,000 from the Laurel School District
• Stephen Sassi, an accountant, stealing $1.5 million from two doctor clients
   Wendy Davis, a bookkeeper, stealing $170,000 from a law firm where she had worked for 24 years
   Cynthia Declet, a business manager, taking $287,744 from a small computer consulting business.
Sentences in these cases ranged from probation for Hitch to three years in prison for Sassi.
And while the courts do their best to see money is repaid, full restitution is rare, Weiss said.
Usually, the money is spent on luxury items -- like trips, meals or hotel stays -- or addictions such as gambling and drugs, Weiss said.
Nowakowski, who worked at United Electric Supply, plowed the $500,000 he stole into slot machines in Atlantic City, Dover Downs and Delaware Park, sometimes playing 24 hours a day
Now, four years after his conviction and two years after he left prison, Nowakowski sends the company a $100 check every month.
Frankly, it would take an eternity to pay off [what he owes] completely," said Gene Bruni, company president.People attending the nation's 300,000 churches are among the most vulnerable.
They come to meet good people, not to wonder who's going to rip them off after worship, said Chris Falkenberg, a former Secret Service agent who runs the private firm, Insite Security.In this setting, people let down their guard believing they are among holy and consecrated folks, said the Rev. Doug Gerdts, senior pastor of First & Central Presbyterian Church and treasurer of his denomination's regional governing body, New Castle Presbytery."We also have some unbelievably pathetic accounting systems and nonexistent controls," Gerdts said. "It's not unusual to have one person in charge of everything and keeping records in their home and reporting to the congregation."  In the vast majority of churches, there is too much trust," said Villanova's Zech. "No one would think a minister or priest or selfless volunteer would embezzle and so they tend not to put in routine financial controls."He said he was surprised by the results of his survey sent to 174 Catholic dioceses that happened to include a question on embezzlement. Among those responding, 85 percent said that they'd had such a theft in the last five years."The Conference of Bishops has provided good guidance on preventing the problem, but not enough dioceses are taking precautions," Zech said.Only three percent of dioceses were conducting an annual audit of parishes, while 21 percent said they never did the audits and 28 percent said they conduct an audit when a priest leaves a parish.If a discrepancy was found, would they prosecute? Zech said he doesn't know, given that one of the worst things a church can do is attract bad publicity.He said it's because of lax oversight that there are scandals like the one involving the Rev. Kevin Gray. He's the Waterbury, Conn., priest charged in July with stealing $1.3 million from Sacred Heart parish over seven years to pay for hotels, meals, clothing and male escorts.In January 2009, there was an arrest in the Diocese of Wilmington.Kenneth Hanbury, a 60-year-old deacon, was charged by Maryland State Police with embezzling more than $30,000 from Our Mother of Sorrows Parish in Centreville, Md., where he was the bookkeeper."Any time you have money, there is going to be temptation, even though there are good people in our parishes," said Bob Krebs, a spokesman for the Diocese of Wilmington.In the diocese, each parish is required to have a financial council for oversight and to advise the pastor. And parish financial statements are reviewed each year at the diocesan level, said Krebs.A diocesan auditor visits a parish every two years to go over the books. That's also done when a pastor leaves a parish. The policy has been in place at least a decade, Krebs said. Zech worries that embezzlements could be the next big crisis for the American Catholic church. In his survey, almost 34 percent of financial officers said their biggest fear was the lack of financial controls at the parish level.Zech hates to say that churches are vulnerable because that "sounds like blaming the victim." Nevertheless, he said, embezzlement is a crime of opportunity and churches should make it harder for people to find that opportunity.No one has to convince the 220 worshippers at Newark's First Presbyterian Church of the need for oversight. The memory of the last three years is too fresh. A certified accounting firm, Wilmington's Jeter & Associates, showed that from January 2007 to December 2008, Carol Lind wrote at least 35 unauthorized checks that made their way to her bank.Lind, now in her 60s, was hired in the early 1990s as an office administrator and apparently did well under supervision, said Tom D. Runnels, a longtime member.We're a loving congregation and that made us casual about our finances," Runnels said.The church had problems finding leadership and went through a period when pastors and interim pastors were there only a few years. During that period, financial oversight waned.
The role of treasurer, which had been a volunteer role, was shifted to Lind. By 2000, she took care of vendor payments, processed payroll, monitored cash accounts, and prepared reports on the financial state of the church.She had control of the checkbook and wrote her own checks.You could say it's a testament to faith that organizations run as badly as ours exist at all," Runnels said.If Lind needed extra money, it wasn't apparent. She drove a Mercedes, owned a home in Chester County, wore suits from Talbot's and the occasional mink.She began to funnel extra paychecks into her accounts as early as January 2007, said David Berkebile, president of the trustees.She covered the theft using a color copier that she'd contracted for at church. When statements from Bank of America and Wilmington Trust came in, she made her own versions using the copier and filled in new balances. (She also kept the original statements neatly stacked in a locked desk.)At first, church leaders did not know what was amiss -- only that it was impossible to get a detailed report for the annual budget meeting in the winter of 2007. Members of the finance committee say they went 14 months without proper accounting."She always said she was working on getting people the records and our interim pastor would back her up, saying she had a lot to do," Runnels said.The theft fully came to light in the fall of 2008, when a church elder was visiting one of the banks and learned that an account, which should have had $60,000, was $10,000 in the red, Gerdts said.Gerdts got involved as treasurer of New Castle Presbytery, offering assistance in paying for a forensic audit. He also noted a reluctance to press charges.
Gerdts said reporting the crime was a way to show the seriousness of the offense, a way to pursue repayment and a way for leaders to rebuild trust with the congregation, given that members felt let down by elders who had let this happen.So the church commissioned a full audit and used it to report her to the Newark police in early 2009. And the slow process of healing began with elders holding a series of meetings in which they admitted their failures. They also developed monetary reforms, Gerdts said.Now a team of three oversees the check writing, five teams of people take turns counting the Sunday collection and another team oversees accounting. There also is an annual report and review of finances for the whole congregation, Brundage said.It didn't hurt that when the embezzlement came to light, the congregation was interviewing a candidate to be pastor. It was Brundage, who had served 30 years in ministry. He said he wasn't scared by the controversy, and came in February 2009."Theology is empty unless we trust that God is with us in the tough times," Brundage said.Initially, the crime's exposure led to a decline in membership and giving, Gerdts said. But the congregation bounced back."They've worked hard to re-establish trust," he said.Today, positions that were previously vacant -- such as a part-time Christian educator and worship leader -- have been filled and the payroll is about where it was when Lind left, because much of the giving has been restored."I think our church is as strong as ever," said Runnels, a member since 1977.But part of the Lind case is frustrating to members of the congregation because it's in legal limbo and because of the lack of media attention.In July 2009, Lind pleaded guilty to theft in Superior Court and was sentenced to two years in prison, though that was suspended for a year of probation, Runnels said.He said church members agreed to the sentencing because they were under the impression that Judge John A. Parkins ordered a plan for restitution to be completed within 90 days. A plan has yet to be presented in court."I have people come into my office and say they're stuck wanting to know how come nothing is happening," Brundage said. "I understand why they feel let down."Frustrated, the church posted an open letter on its website in April asking that Deputy Attorney General Kevin Carroll give the case priority.Carroll wrote back to say the case "was overlooked as counsel caseload increased dramatically" but that he was seeking to have the Lind restitution hearing placed on the court calendar."Is she able to pay?" said Bradley Manning, a public defender who represents Lind. "I can't answer that question. I know she and her husband are having financial difficulties.
"All I know is that she admitted her guilt and there is an agreement she will pay."Berkebile, a trustee, says church members would like the legal end to be settled because it feels unfinished.A lot of people don't expect to get much back but they'd be comforted if Lind apologized, he said."I think even if she started paying 50 cents a month, some people could stop thinking about it," he said. "But some will never heal."

No comments:

Post a Comment