Thursday, July 26, 2012

Minnesota Pastor Sentenced for Embezzling from Synod


A former Minnesota pastor is sentenced to a year in jail for embezzling hundreds of thousands of dollars from a Lutheran synod.

Leon Piepenbrink worked with the Hmong community at Shepherd of the Hills Church in Inver Grove Heights. He was fired in August 2010 after allegations of the embezzlement surfaced. The theft of as much as $300,000 from the Wisconsin Evangelical Lutheran Synod took place from 2007 to 2010.

Prosecutor Scott Hersey says Piepenbrink's claim that he took the money to help the needy is "highly suspicious." The St. Paul Pioneer Press says the 52-year-old St. Paul man pleaded guilty to seven counts of theft by swindle in April.

A Dakota County District Court judge also ordered Piepenbrink to serve 20 years of probation.

Saturday, July 21, 2012

Kissimmee pastor wanted for identity fraud in Florida


A pastor, who is currently out on bond for sexually assaulting a male teenage church member, is now wanted for fraud.

Kissimmee Police officers are looking for Pastor Angel D. Perez-Nieves, who serves as the pastor at Templo Pentecostal Church on Columbia Avenue.

Investigators said they have issued an arrest warrant on fraud charges for Perez because he put the church’s security alarm bill in a member’s name, and wasn’t paying the bills.
“The victim came forward and let us know she received a call from this alarm company letting her know that the bills for the alarm for the church haven’t been paid and that her credit score was in jeopardy and she was confused because she didn’t have an account for an alarm system for the church,” said Kissimmee Police Spokeswoman Stacie Miller.

We tracked down the victim who is pressing charges but she did not want to be interviewed.

We also stopped by Perez ‘s home in Kissimmee near the Osceola County-Polk County border. No one answered the door. However, investigators said Perez asked for members' names, dates of birth and social security numbers claiming it was for the purpose of “state recording.”

Kissimmee Police said that Angel Perez-Nieves has two options. He can either turn himself into authorities at any police agency or he will eventually be picked up by law enforcement.

Friday, July 20, 2012

Diocese of NY church lady accused of embezzling committed a 'sin': Judge -

From the New York Post - July 19, 2012

Manhattan judge today chided prosecutors for offering only 4 1/2 years prison to an allegedly embezzling former clerk for the Diocese of New York, calling the $1 million embezzlement "not only a crime, but a sin."

"How come you went down?" Manhattan Supreme Court Justice Lewis Bart Stone asked after prosecutors announced their latest rock-bottom offer -- 4 1/2 to 9 years prison -- for accused accounts payable clerk Anita Collins.

Back in April, prosecutors had said they'd go no lower than six years prison for Collins, 69, who is charged with taking the money over the course of seven years, filling her Schuylerville, Bronx, apartment with Bloomingdales furniture, Belleek China and pricey Madam Alexander dolls.

"This is a woman who has stolen more than a million dollars from a not-for-profit religious organization," the judge told prosecutors.

"Which could be described not only as a crime but a sin. I'm not sure that your offer is fair to the organization, which has its own financial difficulties," he added.

When defense lawyer Howard Simmons made a pitch for leniency, arguing that Collins was the only caretaker for a daughter now dying from cancer in a Manhattan hospital, the judge was unmoved.

"So she created her own charitable fund out of somebody else's money," the judge said.

Collins, a hunched and frail figure who stared down at the defense table throughout today's brief hearing, has until Aug. 16 to decide if she'll go to trial, or take the 4 1/2 years.

"If you are not going to trial, I will accept the 4 1/2 to 9," the judge finally agreed.

The deal would require that Collins forfeit her assets and waive her right to appeal. Some 30 church folks -- though not Cardinal Dolan -- have written letters asking for mercy.

"She's doing poorly," the defense lawyer told reporters after court. "Her health is deteriorating. She's not eating, and not doing well in confinement. She's lost quite a lot of weight."

He added, "Four-and-a-half could very well be a death sentence for her. She's mentally and physically destroyed."

Colins had been convicted of grand larceny in 1999 for stealing from a previous employer, but the Archdiocese never did background checks when hiring her, authorities have said.

Thursday, July 19, 2012

Former Kilby Elementary principal guilty of embezzlement in Virginia


The former Kilby Elementary School principal has pleaded guilty to using a school-issued credit card to make thousands of dollars of personal purchases.

Jenny Georgina Enriquez De Bermant, 48, of 3068 Vidalia Court in Dumfries, pleaded guilty Thursday in Prince William Circuit Court to embezzlement.

Bermant was arrested on May 3, after police and school officials investigated reports of financial irregularities at the Woodbridge area school.

Prosecutors said an internal auditor with Prince William County Schools began an investigation in April, after receiving a call from an anonymous Kilby employee, stating the school’s credit card had been used to buy several items that could not be found in the school.

The auditor identified 55 items purchased on that credit card between June 5, 2011 and March 4, 2012 and conducted an inventory at the school on April 17, finding just 13 of those items there, court documents state.

Prosecutors said Bermant told the auditor that if she came back in a week, she would search the school and find the missing items.

The auditor returned a week later and found most of the items, but school employees said they did not know where they had come from.

A school division risk management investigator went to the school on April 26 to investigate the case, court documents state. The investigator spoke to Bermant, who first said the school was having bookkeeping problems and later admitted that she used the credit card to make personal purchases, including Christmas gifts for her children.

Bermant told police she and her husband were having financial trouble, and she did not want their three children to know, prosecutors said.

According to a search warrant on file in Prince William Circuit Court, Bermant used the credit card to buy televisions, curtains, iPhones, MacBook laptops and an iPad, among other things.

The personal items Bermant purchased with the school credit card totaled over $17,000, prosecutors said.

Prosecutors said Bermant also arranged for one of her neighbors to sell a piano to the school for over $4,000. Investigators learned that the piano was Bermant’s and was not needed by the school.

Bermant remains free on bond and faces up to 20 years in prison when she is sentenced on Jan. 3.

St. Ann's School CEO is due in court July 27 in Massachusetts on embezzlement charges


Sharon Cutter, former chief executive officer at St. Ann’s Home, is scheduled to appear before a judge July 27 at Essex Superior Court in Salem to answer charges of embezzling from the school for troubled children.

The indictment for Cutter of Piedmont Street in Methuen, is for two charges of embezzling money, said Carrie Kimball Monahan, spokesperson for District Attorney Jonathan Blodgett.

“She was summonsed to court so she is not in custody,” Monahan said.

The case started last November when the agency launched an investigation into its finances after financial irregularities were discovered. Cutter was first placed on administrative leave, and fired three weeks later. In January, investigators conducted a search warrant at her home and at her then-boyfriend’s restaurant, Prelude on Route 97 in the Methuen, Salem, N.H. line. Records from what was seized from the home and restaurant have not been released.

St. Ann’s Home and School at 100 A Haverhill St., serves children with learning disabilities and behavioral and emotional disorders at its residential treatment center and special education school. St. Ann’s is a related agency of the Archdiocese of Boston, but does not receive any funding from them.

After the loss: Iowa School district back on its feet


Despite being hit with two substantial financial hardships in the past three years, the Clinton School District is working its way to becoming financially sound.

First, the district was rattled in 2009 by a $1.2 million embezzlement carried out by the district’s assistant business manager, Denisa Babcock. The district’s business manager, Gayle Isaac, left the district as the investigation was beginning to take a position at a school district closer to Des Moines. A report released by the state auditor’s office showed Isaac had not practiced proper oversight of his office, allowing Babcock — now convicted — to embezzle funds for her personal benefit. While the district received $1 million in insurance payments for the embezzlement, it is waiting for another $240,000. The remaining money will all go back into the general fund to be used for education.

For current business manager Jan Culbertson, who started working for the Clinton schools one month after the embezzlement investigation started in early 2010, everyday is about moving the district farther away from the conditions that allowed the embezzlement to go on undetected.

“We still have a long way to go, but we’re a lot further than we were two years ago,” Culbertson said.

According to Culbertson, when she arrived in February 2010 to start her job as the business manager she found no balances for accounts, no bank reconciliations and a barrage of other problems. After some work, she found five out of the 14 funds the district maintained were negative.

Now, only two of those funds have negative balances, the print shop and the activity fund. While Culbertson recognizes the $600,000 negative balance for the activity fund, she is also working to correct it through detail, documentation and holding those in charge accountable, she said.

Rather than presenting the activity fund with one budget, Culbertson breaks the numbers down by individual sport and all expenditures are tracked.

Also, whenever legally possible and financially feasible, expenditures from the activity fund are transferred to the general fund at the end of the year to help cut down the activity fund deficit.

The activity fund work is one of the numerous programs Culbertson has implemented since joining the district. She also meets quarterly with building secretaries throughout the district to go over budgets and other information.

“Those people are very important to the district. If they know what’s going on, they can monitor what’s going on in their own building,” Culbertson said.

Culbertson said in addition to the work she’s doing for district financials, she’s also training her full-time four-person staff to do as much as possible so tasks are not handled by one person from start to finish.

“Before I came, none of the office personnel were allowed to do much,” Culbertson said. “Now, if I’m gone to a meeting or something and there’s a question, I’m not the only one who can answer it.”

Other steps include publicly acknowledging donations of $100 or more, giving monthly updates to the school board, tracking all school fundraisers and creating a separate bank account for the district’s self-funded health insurance fund. Culbertson received some outside perspective on her progress during the school board meeting on Tuesday when a representative from Winkel, Parker and Foster delivered the school audit from the 2010-2011 school year.

The auditor pointed out a number of changes that could be made including those to bank reconciliations relating to cash balances and internal controls.

“There were several things I had to clean up on, which I knew,” Culbertson said.

Of the information delivered in the audit, Culbertson said she is most proud of the general fund news.

“The general fund increased its fund balance by $1.95 million. I’m feeling very comfortable with that,” Culbertson said.

The district faced a second financial ding as it was still reeling from the embezzlement when the ADM co-generation plant was given an exemption from property taxes in 2011. The exemption was also retroactive for the previous year.

Because the school district was in limbo on what would happen when the ADM matter went to court, the district published the certified budget in March based on the least amount of assessed value, with plans to possibly reduce it. This budget called for a $16.86 per $1,000 of assessed value levy. After doing research and asking lots of questions, Culbertson said the district discovered a little known section of the code of Iowa that allows schools districts that have had unexpected changes in tax base through no fault of their own to receive some funds from the state. Through this, the school district will receive a little more than $244,000. Other state legislation and cost-per-pupil rates allowed the district to lower the tax levy rate by 15 cents to $16.63 per $1,000 of assessed value for the 2012-2013 school year.

“I’m very happy with the 15-cent decrease,” Culbertson said.

Overall, Culbertson said, the district still has work to do, but she’s proud of the progress that’s been made so far. She said she’ll feel even better after the district sends all of its account information to the state for review in September.

“We had a lot of work to do. We made a lot of headway,” she said, “When I came in, I had a lot of cleanup to do. I didn’t do it alone. My office has been great,” she said.

Former recruiters claim fraud at Academy of Art in California


Four former recruiters at the Academy of Art University in San Francisco are accusing school officials of using an illegal compensation plan to cheat the federal government out of millions of dollars in financial aid, the San Francisco Chronicle reports.

In a so-called "whistleblower" lawsuit filed in federal court, the former employees claim the school adjusted their pay up or down, depending on how many students they registered. The suit also claims the school offered bonus trips to Hawaii as an incentive, then lied to the government about the incentives, the newspaper said.
The former recruiters—Scott Rose, Mary Aquino, Mitchell Nelson and Lucy Stearns—are suing under the False Claims Act, a federal law that allows individuals to sue on behalf of the government, and receive 15 to 30 percent of any settlement or money recovered, said their attorney, Stephen Jaffe.

The government outlaws so-called "incentive compensation" so that schools won't try to entice unqualified applicants or those who can't afford their student loans.

But offering incentives can be tempting for schools because of federal financial aid payments, which are paid directly to the college. And once a student is enrolled for 60 percent of the term, the school can keep the payment.

"It's just gravy," said Jaffe. "Schools have a tremendous incentive to enroll as many students as possible."

In legal papers filed Thursday, school officials denied any wrongdoing, while saying the compensation plan was legal.

"At all times, the Academy of Art complied with the regulations regarding compensation of admissions representatives, said Steve Gombos, a Virginia attorney representing the art school, told the Chronicle.

The school has tried to have the suit thrown out ever since it was filed in 2009, arguing that the compensation plan was legal because of a loophole at the time that permitted incentives under some circumstances.

Known as "safe harbor," the loophole let colleges pay recruiters based on the number of students they enrolled as long as the recruiters also were judged on other performance criteria, and if their pay was not adjusted more than twice a year.

Though federal prosecutors have declined to intervene, instead allowing private attorneys to litigate the case, last month U.S. District Court Judge Phyllis Hamilton ruled that the case could go forward.

Scott Lund, Shelby, Michigan schools ex-superintendent, pleads guilty to embezzlement


Scott Gordon Lund, the former Shelby Public Schools superintendent, has pleaded guilty to felony embezzlement from the schools.

In a plea agreement Monday, Lund, 55, of New Era, pleaded guilty to embezzlement by a public official of more than $50, a felony punishable by up to 10 years in prison. In exchange for his plea, a second count of retaining a financial transaction device without consent, a maximum four-year penalty, was dismissed. The “device” was an Oceana High School gasoline credit card.

Oceana County Prosecutor Terry Shaw agreed to seek a jail sentence no higher than the midpoint of state sentencing guidelines. That's likely to mean a term of a few months in the Oceana County Jail and certainly won't lead to state prison time, Shaw said.

As part of the deal, Lund must pay $14,129 in restitution.

The sentencing judge, 27th Circuit Judge Anthony A. Monton, is free to set any term of probation when he sentences Lund Oct. 1.

Finally, under the plea deal, if Lund serves the jail time, pays the restitution and successfully completes his probation, he will be allowed to plead guilty to a misdemeanor and have the felony conviction removed from his record, Shaw said.

Lund was charged with using school funds to buy himself more than $13,000 worth of items, including a large-screen TV set, a treadmill, three iPads, material to build a deck and Wesco gasoline cards.

Lund resigned as superintendent of Shelby schools effective Dec. 21, 2011, after being placed on paid leave Dec. 8. He had held the top job for about a year, previously serving as principal of Oceana High School and of Ferry Elementary School.

The alleged embezzlement happened from Nov. 14, 2009, to Dec. 24, 2010, according to the charge. For most of that period, Lund was principal of Oceana High School.

The credit card offense allegedly took place from July 1 to Dec. 6, 2011. In that period, Lund was superintendent.

Tuesday, July 17, 2012

Oklahoma Churches tighten financial controls to prevent further embezzlement.


The Rev. Tish Malloy's congregation at the First United Methodist Church of Moore was stunned when it was discovered a trusted employee embezzled $140,000 from church coffers for lavish vacations, a new car and a service to pick up dog poop.

It was revealed last week that police are investigating an alleged embezzlement of $109,454 at St. John the Baptist Catholic Church in Edmond. Malloy prayed for its congregation, knowing church members' heartache after having been through a similar controversy three years ago.

“It's a betrayal,” Malloy said. “It was very painful for us, but our congregation pulled together, and we learned and grew from the experience.”

Police reported the theft from the Edmond church, 424 S Littler, could have begun as far back as January 2004. A church employee is suspected of stealing the money, although no arrests have been made.

Church parishioners were informed July 8 after Mass.

Seeking Justice

The Rev. Ray Ackerman told his congregation that in the tradition of Catholicism, they would be merciful, but at the time same time will seek justice, a longtime church member told The Oklahoman on Tuesday.

The decision to seek prosecution against someone suspected of embezzling from a church is not easy, but absolutely necessary, said Oklahoma City attorney Michael Joseph.

Joseph represents several churches of different denominations and nonprofit organizations that have fallen victim to employees who have stolen from them.

He said that in many instances, the governing bodies are concerned that reporting the crimes could hurt donations or grant opportunities when made public. There also may be a reluctance to call police because most churches are run with relatively small staffs and employees forge close friendships with church members and co-workers.

“A lot of times when an embezzler is caught, they beg for forgiveness and offer to repay what they've stolen,” Joseph said. “It causes a lot of anxiety when people have to consider turning someone into police for embezzling, but that's exactly what has to be done.”

Joseph said making payback arrangements with an embezzler can keep prosecutors from filing charges if the person doesn't keep up with their end of the deal. A jury could be persuaded to believe a repayment plan was for a loan, and not to compensate the church for theft, he said.

Joseph said embezzlers generally have no means to immediately pay back what they've stolen, because the money was spent on non-tangible items like vacations, gambling and frivolous shopping sprees.

Financial Accountability

Good accounting practices are the best protection against embezzlement, although many churches, including the Catholic Church, are far too relaxed in protecting themselves from theft, said Thomas Groome, a senior professor of theology and ministry at Boston College in Massachusetts.

Groome helped establish at Boston College one of the few masters programs in the country with an emphasis on church finance. He is a former priest who spent 13 years in the priesthood, beginning in the early 1970s.

“I have a friend that knows the inside workings of the Catholic church that says its lack of financial accountability will be the next big scandal that hits the church,” Groome said. “It all stems from poor oversight.”

Part of the reluctance to institute stronger financial controls for any church is the genuine belief that people are morally incapable of stealing from a church. Temptation and desperation can coerce even the best to steal, he said.

Embezzlement isn't any more frequent in churches as it is in private businesses, Groome said. And like for businesses, there is insurance coverage available to churches to cover theft.

The Sullivan Insurance Agency in Ardmore has written thousands of policies for churches since it was founded in 1946, owner Lena Sullivan said. She said churches can purchase embezzlement coverage for as little as $500 a year.

“Most of the time, they start out by saying they don't need it, until I start showing them newspaper articles where it's happened to other churches,” Sullivan said.

Surviving Embezzlement

Malloy said even though it was a painful process, the First United Methodist Church of Moore survived the embezzlement and since has flourished.

Their former accountant, Sonya Jo Ensey, 41, of Oklahoma City, was convicted. To stay out of prison, she makes monthly restitution payments to return what she stole.

Ensey was contacted through her attorney, but declined to speak with The Oklahoman.

Malloy said she kept church members informed about the criminal case throughout the proceedings, and none of their large donors backed out of commitments they made to the church.

Even though their financial practices were historically good, more safeguards were instituted, she said.

“It's our hope that others learn from our mistakes and the way we handled it,” Malloy said.