Tuesday, April 30, 2013

Antioch, California: Former PTO president accused of felony embezzlement

The one-time president of the parent-teacher organization at an elementary school here has been arrested after police say she used her position to steal thousands of dollars.

Police arrested Alisa Russo, 31, the former president of the Fremont Elementary School PTO, Friday on suspicion of felony embezzlement, Antioch police Sgt. Tony Morefield said. She is accused of stealing more than $10,000 in funds from the PTO.

The case came to light when Fremont Elementary School principal Jason Larson was alerted that money was missing, Morefield said.

"She has admitted to a portion of it," Morefield said. "She has not admitted to all of it."

The PTO raises money for school activities such as field trips and dances, and also was expected to help with graduation activities.

Larson did not immediately return a message seeking comment. According to the parent, Russo has been removed as the PTO's president, a position she had held since November.

Two parents allegedly embezzle $30,000 from PTA in Middleborough, Massachusetts


Police are preparing embezzlement charges against two people whom they say fleeced an elementary PTA group of $30,000.

Police Chief Bruce D. Gates did not release the names of the suspects, but said it was a long-term scheme perpetuated by two PTA members who are no longer in the group.

On Sunday night the local school department sent out a phone message to parents of elementary-age students notifying them of a 6 p.m. “business meeting” on Monday that did not involve academics or the safety of students and staff.

School Superintendent Roseli S. Weiss confirmed today that she will discuss the embezzlement charges at tonight’s meeting.

Two Middleboro parents are facing charges they embezzled $30,000 from the PTA of a local school over a four-year period.

They will be summoned to court on larceny charges, police said at a meeting with parents Monday night.

School Superintendent Roseli S. Weiss said Monday that she broke the news to the school community because she wants to lead an era of transparency with parents. The news of the pending criminal charges, she said, was upsetting.

“It’s extremely sad and I feel badly for the individuals who either are ill or compelled to do this,” Weiss said.

At least 130 people attended the 6 p.m. meeting Monday at the Henry Burkland School, where Weiss gave limited details about the case.

Speaking to reporters afterward, Police Chief Bruce Gates and Weiss said the school district started questioning the missing funds in January when the Parent Teacher Association was being split into two groups. It serves the Mary K. Goode School and the Henry Burkland School.

Police were called in on April 2, and an investigation resulted in the decision to summon the two parents into Wareham District Court, where they will each face a charge of larceny over $250. Gates said the summons were issued in the last few days.

It was not known if the two parents are from the same household, or if they are men or women. Their names were not released.

Their arraignment is scheduled for May 21, Gates said. He added that the alleged embezzlement took place over four years.

Weiss said the allegations should not reflect on the volunteerism of the rest of the families in the school district.

“This is about two individuals who made a poor choice,” she said.

Weiss asked parents at the meeting not to speak to reporters.

“I please ask you to have faith in us and faith in our administration because I’m sharing this with you,” Weiss said during the meeting.

Weiss had issued a telephone alert to parents and guardians on Sunday evening informing them about the meeting.

Michelle Holden, the superintendent’s administrative assistant, said people unable to attend the meeting can check the schools’ website after the meeting.

Missing money. Undocumented transactions. Inappropriate use of accounts.
These were the red flags that finally set off an investigation of the Middleboro PTA that found two parents had allegedly embezzled $30,000 since 2008.
Sharon Ellis, former PTA president, and Douglas Russell, both parents of students in the Middleboro school system, are scheduled to be arraigned in Wareham District Court on May 22 on one count each of larceny over $250, according to the court’s clerk’s office.
“It’s very troubling because the money that is collected for students is not being used for students,” said School Superintendent Roseli Weiss. “We don’t want it to cast a cloud on our volunteerism or the PTA because they are very strong and positively engaged in the school district.”
Weiss said at this point school officials have no reason to believe the alleged wrongdoing went beyond the two accused parents. The two are not affiliated other than through PTA involvement, said Weiss.
“It’s about two people who made a mistake or had a lapse in judgment,” said Weiss.
Neither Ellis nor Russell are currently involved with the PTA, said Weiss.
School Committee members could not be reached for comment Tuesday, but Chairman Sara Cederholm provided a comment through email.
“The Middleboro School Committee supports the actions of our superintendent, our PTA, and our police department as they seek resolution and restitution in this matter,” said Cederholm.
Weiss held a meeting for parents on Monday to break the news to the school community. At least 130 people attended the 6 p.m. meeting at the Henry Burkland School, where Weiss gave limited details about the case.
Speaking to reporters afterward, Police Chief Bruce Gates and Weiss said the school district started investigating the missing funds in January when the Parent Teacher Association was being split into two groups. It serves the Mary K. Goode School and Henry Burkland School.
Police were called in on April 2, and an investigation resulted in the decision to summon the two parents to Wareham District Court.
Weiss said on Tuesday no parents had reached out to her following the meeting. Gates did not return requests for comment on Tuesday.
Embezzlement from school organizations is not uncommon. There have been two cases reported in Brockton.
In 2008, the treasurer of the Hancock School Parent Advisory Council, Christine Peterson, resigned after being accused of taking $15,000 from the organization, according to school officials. She was not prosecuted after she returned the money, school officials said.
The following year, an estimated $50,000 was discovered missing from the Brockton High School Athletics program. No one was ever charged in that case, but about $35,000 was returned.

Saturday, April 27, 2013

District embezzlement update at Skyline College in California

The man charged with embezzling money from the district last October has been sentenced April 26.

Bradley Witham, director of information technology support at the San Mateo County Community College District, was charged with embezzlement on Oct. 26. Witham embezzled $150,000 in computer equipment, which he then resold.

Steve Wagstaffe, District Attorney, attended the sentencing hearing April 26. As reported by Wagstaffe, Witham will receive three years in prison. The defense had requested two years while the district attorney requested four years.

“The judge decided to go in the middle,” said Wagstaffe.

According to Kathy Blackwood, chief financial officer of the district, Witham was caught when he tried turning in receipts that did not match what was purchased. The system has been changed since then in order to assure that this does not happen again.

Purchases will be placed by an individual, but not by the person who will be receiving the item. The receipts will then be put through a thorough review, then scanned, uploaded and finally audited. Auditors now have a system in place that will help sort and look at the receipts in order to spot anything suspicious or anything that doesn’t follow the guidelines.

“We plan to be efficient and do the best in every way possible,” said Blackwood.

Protect your organization from fraud

To avoid losses from counterfeiting and check fraud, get serious about protecting your own business, a police detective and a banker told local business managers Thursday.

These days, prosecutors and law enforcement agencies don’t have the resources to aggressively track down and prosecute fraudsters, said Coos Bay Police Detective Scott Rogers at a workshop organized by the Southern Oregon Financial Fraud and Security Team.

Yet counterfeiting and check-fraud rings are constantly coming up with new ways to part you from your money.

Rogers said a current method of counterfeiting is to chemically wash the ink off a $5 bill and use a color copier to print a larger denomination onto it. Because the fake bill is made of authentic paper, the pens sold for detecting counterfeit currency won’t work on it.

An ultraviolet light unit is a foolproof way to make sure that a bill or credit card has the right kind of security markings. The units cost about $50 for a countertop model, or less for a battery-operated device that can be used in a vehicle or outdoor booth.

Chemistry also has given check forgers some new opportunities, said Jen Hibbs, regional operations coordinator for Sterling Bank. They can wash ink off a check and change the amount or payee.

Pens with ink that can’t be washed off are available. Hibbs also suggested depositing mail only in locked mailboxes.

Another important line of defense against check fraud and embezzlement is for the business owner to check the bank statements each month. You have 60 days to dispute payment on an item, but if you have multiple fraudulent checks from the same person, the period goes down to 30 days, because that shows you didn’t “exercise ordinary care” in protecting your checks.

“Ordinary care” also means locking up blank checks and promptly reconciling bank statements.

Hibbs said banks offer a service called “positive pay,” in which you provide a daily record of the checks you wrote and the bank matches it with checks that clear. There’s also “reverse positive pay,” in which you approve items presented every day before the bank clears them.

In 2012, 55 percent of businesses with revenue less than $1 billion reported attempted or actual payment fraud. Checks accounted for 82 percent of these frauds. For all businesses that reported check fraud losses, the median loss was $19,200.

If you experience check fraud, your bank may make you use positive pay, but you can also use it as a preventive measure.

Your own employees also have opportunities to defraud you. In fact, the Association of Certified Fraud Examiners found that a typical organization loses 5 percent of its revenue to fraud each year, with the median loss $140,000. Small businesses have higher median losses because they typically have fewer fraud-detecting systems in place.

According to the ACFE, 87 percent of occupational fraudsters had never been charged with or convicted of a fraud-related offense. Tips — not accounting controls or audits — uncovered 43 percent of frauds discovered.

Separating financial functions among employees of a business helps prevent embezzlement, Hibbs said. Requiring employees to use their vacation time also helps; some embezzlers never take a vacation or sick day because they always have to be at work to cover up their thefts.

And employees who sign a company’s written policy articulating “zero tolerance for theft” are 70 percent less likely to steal, she said.

Friday, April 26, 2013

Affidavit: University's CFO admitted embezzlement in Texas

A West Texas university has fired its chief financial officer amid accusations he used the school's money to pay off debts he and his wife incurred.
Wayland Baptist University in Plainview confirmed Thursday it has dismissed James E. Smith. An affidavit submitted with a lawsuit filed this week by the university says Smith admitted embezzling about $40,000 over a four-year period.
The affidavit says officials became concerned after a financial review of recent campus construction pointed to irregularities. Executive Vice President and Provost Bobby Hall says in the affidavit that Smith admitted his involvement and says he was unable to repay the university.
Smith was suspended in March and fired earlier this month. He had been chief financial officer since 2001.

University officials said in a court affidavit that Smith admitted to embezzling about $40,000 over a four-year period. According to the Lubbock Avalanche-Journal, Smith told Executive Vice President and Provost Bobby Hall that he had been using university funds to pay personal debts and that he didn’t have money to pay it back.

Hall’s affidavit said university officials began an internal investigation after a financial review of one campus building renovation and construction of Jimmy Dean Hall, a new men’s dormitory. The dormitory is named after a country music singer and television host popular in the 1960s now better known for the sausage company he founded in 1969.

Dean, who died in 2010, was born in born in Olton, Texas, and raised by his mother. He attributed his interest in music to singing as a child at Seth Ward Baptist Church in Plainview. He dropped out of high school to join the Merchant Marines in order to support his family, but always believed that education was a key to success.

Jimmy and Donna Dean originally gave $1 million to Wayland in 2008. In 2012, an additional $5 million was donated. Most of the money has been earmarked for a planned addition to the university museum to house Jimmy Dean memorabilia.

Jimmy Dean Hall is a three-story, 94,000-square-foot structure with 175 rooms and 300 beds that features the latest in “green” technologies and safety features. The dorm opened to students last fall. Wayland invited the public to an open house to view and tour the new facility April 28.

Wayland officials said their investigation is ongoing and that they will cooperate with police if criminal charges are filed.

Wednesday, April 24, 2013

Canton, Georgia Woman Arrested for Theft from School Organizations

The Cherokee County School District has issued a press release regarding the arrest of a Canton woman who was the former treasurer of the Indian Knoll Elementary PTA in Hickory Flat and the Sequoyah High School Girls Soccer Booster Club in Holly Springs on two counts of theft.
"The Indian Knoll Elementary School PTA and Sequoyah High School Girls Soccer Booster Club alleged financial discrepancies do not involve Cherokee County School District funds or employees," the release says.
According to the school district, when organizations such as the PTA and the booster club feel their finances are out of order, the school district offers assistance. The audit of the Indian Knoll PTA's finances was performed by the state PTA, and the audit of the Sequoyah booster club was performed by a retired accountant.
"The School District appreciates that the local PTA and Booster Club leadership can be relied upon to pursue investigations of inappropriate activities regarding community donations," the school district said.
Additionally, the district expressed its gratitude that the PTA operates inside district schools, as opposed to an independent organization. The national scope of the PTA allows for additional resources to be called in when financial questions arise.
ORIGINAL STORY: A Canton woman who was the former treasurer of the Indian Knoll Elementary PTA in Hickory Flat and the Sequoyah High School Girls Soccer Booster Club in Holly Springs has been arrested and charged with two counts of theft, authorities say.
According to the Cherokee Sheriff's Office, Kim Turman, 40, allegedly stole $12,448.61 from the Indian Knoll PTA between 2011 and 2012. Turman is also suspected of stealing $5,882.51 from the booster club in 2012.
Both organizations allegedly victimized by Turman cooperated fully with the authorities during the investigation into the thefts, the Sheriff's Office said.
Turman has been charged with two counts of felony theft by taking, and was released from the Cherokee County Adult Detention Center Monday evening on a $52,000 bond.

Monday, April 22, 2013

Embezzlement: Has it become part of our culture?

FROM www.benningtonbanner.com:

The following was noted in the Spring 2012 issue of the Vermont Bar Journal:
"Vermont is the number one state in the nation for embezzlement thefts from corporations and nonprofits. In fact we may well be on our way to another dubious number one ranking: for thefts by fiduciaries from estates of all types -- guardianships, decedents’ estates -- and by agents acting under powers of attorney. It appears that living well on other people’s money has become a way of life for some Vermonters."
And how prophetic a statement: the Bennington Banner reported on April 13, that Robert Baker, reached a plea deal with the U.S. Attorney’s office. He was accused of diverting for his personal use $171,000 from the estate of Nada Lodinko.
To the listing of corporations and nonprofits, I would to add, unfortunately, municipalities.
No matter the institution, the embezzlers’ pedigree or the motivation, embezzlement has become an epidemic. Even long established collegiate institutions have not avoided the hurt to their finances and reputation from the evil deeds of former trusted employees.
Westchester County’s Iona College, saw Sister Marie Thornton (yes a nun) plead guilty to having embezzled $850,000 from Iona where she had been the college’s V.P. of Finance. All of the money was used to satisfy a gambling addiction. For her ill-gotten gains she was sentenced, in late 2011, to 2,000 hours of community service.
Dartmouth College’s former auditor, 79-year-old Vermonter, Bruce McAllister, allegedly betrayed his fellow employees at the New Hampshire college by stealing over $800 thousand. If it is any consolation, the Dartmouth alum will pay back the money once his 18-month sentence is complete.
Closer to home, in Bennington, and much more tragic was the recent announcement that James Beckwith, with a tenure of seven years as Southern Vermont College’s CFO/COO, allegedly embezzled over $500,000 from the college. Much about this embezzlement will never be known. The 58-year-old alleged embezzler took his life with a self -inflicted gunshot wound in February 2013.
On March 25, the Rutland Herald reported that Karen Brisson, the long serving Weybridge Town Clerk and Treasurer, admitted, that over a six-year period, she stole $400,000 from her town.
Soon, she might very well be joining, Sherry Roebuck of Guildford, who on Feb. 17, was given an 18-month prison sentence for embezzling $80,000 from the Algiers Fire District. The Herald also reported on April 14, that in Fairhaven, Denis Ballard was charged for allegedly taking $150,000 from her employer, a local store.
Nor are Vermont’s neighboring towns immune to the wrongful deeds of employees. On March 12, Virginia DiCapria, the former Treasurer of Charlton, N.Y. (near Saratoga) admitted embezzling nearly $500,000 from the Charlton volunteer fire department. And in nearby Troy, N.Y., in December 2012, Dennis Bassal, the former executive director of a nonprofit agency, was charged with allegedly stealing $200,000 from his employer, Father Young’s Rehabilitation Center.
Unfortunately, there are many more that could be detailed here -- to what end? Can embezzlement be stopped? Not really, but it can be curtailed and to do so we need to make real changes to the culture in how we approach this epidemic.
Heading the list is what forensic auditors refer to as "setting the tone" by those who have the responsibility of overseeing an organization’s funds -- and they need formal training. For example, New York State’s school board trustees are required to obtain six hours of continuing education in financial matters. Furthermore, those at the "top" must get involved. But too many fail to do so, just ask any convicted embezzler.
Second, is to recognize that "I have trust in our financial person" as is so often heard. Trust is a feeling and is absolutely not a financial control.
Third, if a town or nonprofit organization does not have the money to invest in overseeing its finances seek outside help from the Vermont State Auditors office, the Vermont CPA Society, the League of Cities and Towns, or from volunteers.
And fourth, the judicial system must see to it that convicted embezzlers served time in prison, made to pay back what was stolen and yes, pay the federal and state income taxes due on their ill-gotten gains. Every organization that is embezzled should issue a Form 1099 (similar to a W-2) to the convicted embezzler.
Vermont has gained the reputation of being first in America in so many worthwhile areas -- its time we shed our reputation of being first in embezzlements. It should not be part of our culture.

Tupelo man faces state, federal charges in Mississippi

Jimmy Dale Bean, a former Tupelo Police employee, faces federal and state charges on apparently separate complaints.

A U.S. District Court notice Thursday set a June 25 plea hearing for Bean on a one-count “information,” which is a federal charge that comes from prosecutors, not a grand jury, usually after a defendant agrees to plead guilty.

Court records do not state what the 39-year-old Tupelo man is charged with, and it won’t become public until his plea is entered in court before Chief U.S. District Judge Michael P. Mills.

However, his federal record shows the unusual addition of a U.S. Department of Justice official, Sheldon L. Beer, from the Civil Rights Criminal Division.

Bean is represented by attorney Stephen Travis Bailey of Tupelo.

In Lee County, Bean faces indictment accusing him of three counts of embezzlement from New Bethel Missionary Baptist Church in Plantersville.

Bean pleaded not guilty at his April 10 arraignment and is free on $75,000 bond. He is represented by Tupelo attorney Rob Laher.

The indictment claims he wrongly withdrew more than $500 cash three times from an ATM in May, July and August 2012.

He allegedly did so with money “entrusted to his care or possession” by virtue of his relationship with the church.

His state case is likely to come up during the May term of circuit court, which begins April 29.

This week, judges will preside over two days of pleas from indicted individuals in advance of the court term.

Sheriff: Longtime church official embezzled over $100K in Louisiana

A church secretary in St. Bernard Parish was arrested for what authorities said was systematic embezzlement of more than $100,000 from her church.
Trinette Johnson, 39, is suspected of embezzling more than $100,000 since 2006, the sheriff’s office said.

Church Deacon Ken Jefferson said for at least four years, he's questioned the church finances.

"The savings went up from $115,000, and the checking had $78,000 to start off. Maybe in less than a year, the money dropped to about $30,000," said Jefferson.

By February, Jefferson said he could no longer turn a blind eye.

"After the church was broke, after we had a negative balance, that's when we started investigating what really was going on," said Jefferson.

Jefferson and other church leaders hired an auditor to look into what they suspect was theft of church funds.

Johnson, of Violet, was the longtime church secretary and account executive for the Greater Mount Olive Missionary Baptist Church in Violet.

She surrendered at the parish jail on Friday after she was informed by investigators that a judge had signed an arrest warrant on charges of felony theft by systematic embezzlement.

She was expected to be released on bond set at $10,000, the sheriff’s office sai

According to investigators, Johnson is accused of systematically misappropriating $101,872 of church funds since Aug. 16, 2006.

"There was a lot of double payments, writing a check for one thing, and then turn around and do a check for reimbursement for the same thing," said Elder Stacy Riley Jr.

At the end of February, the sheriff's office said it was presented a letter signed by 33 members of the church saying the body of the church at Greater Mount Olive Missionary Baptist Church wanted to pursue criminal charges in a matter where church funds were missing.

The department was presented with evidence, including a copy of the church banking records going back to March 2006.

"It's not a rich community," said Jefferson. "People are struggling every day paying their bills, but they're still paying their tithes because they believe in what God's word says, and then you take the money that they're putting into the church to better the community. I just feel like she must not believe in God."

Riley said he regrets that the congregation didn’t take more precautions and create more checks and balances with church finances.

"It was basically disheartening to see that a church that's rich in history and tradition in the parish was struggling financially," said Riley.

City Harvest Church opens overseas branch despite scandal in California

Even as its leaders are battling criminal charges of embezzlement among other problems, City Harvest Church (CHC) has opened its 48th overseas branch, in Orange County, California.

The church, which is CHC's first in the United States and its farthest branch from Singapore, joins a network of 47 others in places such as Malaysia, Taiwan and Australia.

CHC supports its affiliates financially and also sponsors church workers to attend its School of Theology here.

Former CHC Singapore executive pastor Derek Dunn, 40, who is leading CHC USA, told The Straits Times that funds for the Orange County branch have come from Singapore, his own speaking engagements and donations to Derek Dunn Ministries.

Sunday, April 21, 2013

July preliminary hearing set in Hanover Little League embezzlement case in Virginia

Former Ashland Little League President Lynn Newell appeared briefly in Hanover General District Court today and is scheduled for a preliminary hearing July 10 on embezzlement and forgery charges.
Newell, 40, is charged with taking more than $20,000 from a Little League account and a smaller sum from a fund she helped create to defray medical expenses for a young man severely injured in an automobile accident. Court documents allege that Newell, of the 14500 block of Washington Highway, forged the signature of a league official to transfer league funds to other accounts under her control. Newell was arrested April 10 by Ashland Police and is free on bond

Friday, April 19, 2013

Embezzlement - 21 tips to prevent in your nonprofit.

Embezzlement is a widespread nightmare in business and the public sector. If you surf the Internet using the key word, embezzlement, you’ll find seemingly countless headlines.
Upper management commits 18 percent of fraud, according to the Association of Certified Fraud Examiners (ACFE) in 2010. ACFE also said accounting department employees commit 29 percent of fraud.
Not convinced embezzlement is rampant?
Consider these news stories:
Yes, embezzlement can happen anywhere to anybody. Management has to create an environment that will deter dishonesty. That’s a major responsibility of the board of directors and management.
Thorough background checks on new employees are necessary. In new-employee orientation, discuss your company’s financial principles. In a businesslike manner, emphasize that deceit, fraud or theft aren’t tolerated. When policies are explained well, good employees will respect proper internal financial controls.
After all, without internal controls it’s easy for an employee to hide checks that arrive from customers and stamp them with their own personal bank account numbers. And if invoices aren’t recorded, even salespeople can personally benefit by selling products on the black-market or Craigslist.
Actually, it doesn’t hurt for everyone to know financial procedures. As a business-performance consultant, I’ve seen this movie many times including embezzlement at a religious nonprofit, $200,000 in missing inventory at a retailer, and $250,000 in theft at a water utility.
In each case, the management solutions were financial and inventory controls, as well as training of all employees in ethics.
In the water utility situation, the budget became tight and management intended to hire me for PR crisis management to calm utility ratepayers. But I insisted on training the employees. I knew the priority was installing controls, and PR would have to come later. Fortunately, the training program resulted in improved morale, teamwork and communication. It greatly alleviated the PR crisis, so PR strategies were unnecessary.
Yes, fraud could have been prevented by alert co-workers. It doesn’t matter how much you trust employees, make certain no one finds it easy to commit embezzlement. In each of the above embezzlement examples, trusted employees were the culprits.
Yes, I know, it’s difficult in small companies because they can only afford a bookkeeper. But it’s possible to take precautions.
Here are the customary, potential problem areas:
  • Bookkeeping
  • Cash disbursements
  • Data processing
  • Inventory control
  • Purchasing
  • Receiving
The two key steps you should follow:
Step one. Anticipate and analyze each area in which problems can arise. Write policies and strictly adhere to them in order to prevent thievery.
Here are the usual embezzlement red flags:
  • Abnormal increases in sales returns, which can hide payments for accounts receivable.
  • Atypical bad-debt write-offs.
  • Abnormal declines or uncommon small increases in cash or credit sales. This might be an indicator of unrecorded sales.
  • Bounced checks are often a sign of chicanery.
  • Shortages in inventory can mean employee thefts via phony purchases and unrecorded sales.
  • Negative surprises in expenses or profit decreases can result in money being tapped illegally.
  • Sluggish collections can hide embezzlement.
  • Employees who don’t take vacations or time off.
  • Employees who live a surprising, extravagant lifestyle.
  • Good managers walk the floor twice a day or make unannounced spot visits – be very wary of employees who resent such visits. Count on hidden problems.
Step two. Establish an internal audit system and divide responsibilities. Yes, segregate all accounting duties. At each financial stage – whether incoming or outgoing – scrutinize all procedures.
Here are 21 basic policies:
  1. Use a system that prohibits alteration of checks. Make certain checks are countersigned by two responsible employees. (Do not allow signature stamps using the same names as the check signers.) Better yet, pay bills online.
  2. Limit the dollar amount on checks. (It’s better if you authorize checks.)
  3. Make certain a person – other than a check-signer – prepares payments.
  4. Originals or copies of invoices and checks, including voided documents, are filed in numerical order.
  5. Prohibit anyone other than the principal – you – to endorse checks for credit.
  6. Determine who will receive checks and cash while designating someone else to record incoming funds, and appoint another person to take money to the bank daily.
  7. Bank reconciliations are not handled by the same personnel who handle cash receipts and cash disbursements. Preferably, review bank statements online.
  8. Regularly, at least once a month, mail statements.
  9. Prevent wadding by examining payroll records. Monitor payroll tax records.
  10. Conduct unannounced, spot audits.
  11. Designate different employees for ordering supplies, receiving them, and for paying them.
  12. More than one person should sign petty cash vouchers. Receipts should be numbered and attached, and filed numerically. Audit the cash drawer daily.
  13. Set an example by never borrowing from the cash box.
  14. Make sure the same employee who makes credit sales or loans does not write off bad debts.
  15. Back up records on a daily basis. Do not allow the same person who handles accounting do any backups.
  16. If you have a payroll person, ensure the payroll data is accessible to you.
  17. To prevent unauthorized raises or other undesired payments to employees, audit payroll records at least once a quarter.
  18. Lock up unused checks. Verify all checks and check numbers, including voided checks.
  19. Take inventory once or twice per year.
  20. Bond any bookkeepers or office managers. A good insurance agent will advise you. Make certain to follow all financial-control guidelines to avoid problems with the bonding company should an embezzlement occur.
  21. Have your cash and accounts audited each year by an outside accountant.
Finally, listen to your instincts. Again, be on the lookout for turf-minded employees. If you suspect embezzlement, investigate and run to the police. Don’t hesitate.

Former Pontiac schools assistant superintendent sentenced for embezzlement in Michigan


Former Pontiac schools assistant superintendent Jumanne Sledge, 42, has been sentenced to one year in prison, one year on home confinement and three years of supervised release in connection with charges of embezzling $236,000 from the district.

The sentence was handed down this week by U.S. District Judge Denise Page Hood, who also required Sledge, of Bloomfield Hills, to make restitution for a portion of the amount he was charged with taking.

Sledge, of Bloomfield Hills, opted to make a plea deal shortly before his trial was to start last year. His sentencing had been postponed at least three times.

Had he been convicted on original charges, Sledge faced up to 10 years in prison and a fine of up to $250,000 for program fraud. He also faced up to 20 years in prison and a fine of up to $250,000 if convicted of money laundering.

The former assistant to Superintendent Thomas Maridada III from 2009 through 2011 had oversight of both Pontiac district finances and human resources.  

Sledge was indicted March 6, 2012 on charges of program fraud and money laundering by the U.S. Department of Justice in Detroit after an internal audit and an FBI investigation.

The former Pontiac school official is accused of directing a Pontiac district employee to write him a check in 2010 for $236,000, payable to “Leadership Academy,” which Sledge then deposited into a bank account he controlled.   

 Sledge was suspended at the end of 2011 pending an investigation of mismanagement of funds, including federal Title I funds, after the check was turned over to a grand jury and the FBI.

A few weeks later, the FBI seized Sledge’s 2002 Jaguar and a $34,000 bank account.

Jeff Downey, director of the F.B.I. office in Oakland County, said: “The investigation with Sledge is complete, but public corruption remains a top priority of the F.B.I. and we continue to follow up on any and all allegation of wrongdoing.”
Downey said he could not confirm or deny if the investigation of the district’s finances outside of Sledge is ongoing.  

Former Interim Superintendent Walter Burt, who took over the top spot for a year during the time of the investigation, said of the outcome: “It was appalling to see his lack of integrity and also lack of being considerate of the school district and especially a school district that had huge financial challenges.

“What would compel a person to take money from a district for his own personal interest is beyond my imagination. I am happy justice has prevailed and I truly hope his sentence is commensurate with the damages he brought on the district,” Burt said.

Former Pontiac Board of Education Trustee Gill Garrett, who pushed for audits and investigation of finances while he was with the district, said he is happiest about the restitution.

“It is the kids’ money,” said Garrett, who has been in law enforcement for 14 years.  

“I am hoping that he testifies against anyone who had any others who had done wrongdoing.

“From what we are facing in the school district, it goes a lot a deeper. It is not just Jumanne Sledge.

“There are a lot of good people in the school district day in and day out serving kids and to have someone come in and do something like this is sad,” Garrett said.  

Treasurer of PTO accused of embezzlement in Vermont

Vermont State Police say the treasurer of the Richford Elementary School Parent Teacher Organization is facing an embezzlement charge.
Police say 35-year-old Shawna Steinhour has been cited to appear in court on May 20 following a one-month investigation.
Police on Thursday did not reveal how much she's accused of embezzling and did not return a phone call seeking comment.
Steinhour said she had no comment on the charge.

One day after a Richford Elementary School teacher was ordered to appear in criminal court for a felony embezzlement charge, her school district confirmed Friday that she has been put on paid leave from her teaching duties.
Shawna Steinhour, 35, took an estimated $3,500 while serving as treasurer for the Richford Parent Teacher Organization from October 2011 to March 22, Vermont State Police Detective Sgt. Edward Meslin said.
“The teacher will not be present at school until the matter is more thoroughly investigated,” Franklin Northeast School Superintendent Jay Nichols during an an update Friday. Nichols had said Thursday that Steinhour was still in the classroom, but it was subject to ongoing review.
Nichols told the Burlington Free Press that Steinhour will be on an indefinite paid leave from the school, which is on spring break next week.
Nichols said state law allows him to put teachers on paid leave. He said he met with Steinhour on Friday to give her the news.
Attempts to reach Steinhour or her husband, Wally, who serves on the town School Board, have been unsuccessful.
Steinhour, who is a first-grade teacher, has worked for Richford Elementary School for nine years. She previously worked for Homeland Security and U.S. Immigration and Naturalization Service.
She is due in Vermont Superior Court in St. Albans on May 20.

Outcry in Richford over a Parent-Teacher Organization treasurer and teacher accused of embezzling thousands from PTO funds. Now some residents are calling for the woman's husband to resign from the school board.

Shawna Steinhour denied the embezzlement charges last week, but court records show her husband, who sits on the Richford School Board, may have had a hand in the money issues, too. Wally Steinhour is not facing any charges. That's something that's not sitting well with the PTO and some parents.

According to the board, Wally Steinhour has recused himself since his wife was accused of embezzlement. Some members of the PTO feel that's not enough.

"When somebody takes out a loan to cover up monies that have been stolen-- and they were stolen; it's a fact-- it just doesn't sit right with us," said PTO member Marie Destefano.

Some at the meeting called for Wally Steinhour to be fired since court documents revealed he took out a personal loan and used it to pay back the thousands of dollars his wife, Shawna, is accused of embezzling. She is both a first-grade teacher and elementary school PTO treasurer. Prosecutors say she used the money to shop online and go to the hair salon. Parents say if he tried to cover it up, he can't be trusted anymore.

"It was kind of slipped in there and none of us knew until we checked bank records," Destefano explained. "And that's where we found it a little under the table," she says of Steinhour's actions.

But Franklin Northeast Supervisory Union Superintendent Jay Nichols made it clear there's nothing anyone can do to remove Wally Steinhour from his position.

"From a legal perspective, any elected official or school board member is an elected official. Unless they resign or lose in the next election, they have a right to that seat," Nichols said at the meeting.

Technically, Wally Steinhour could resume his position at any time, but he wouldn't be allowed to take part in hearings about his wife's standing as an employee. She's on paid administrative leave.

Though Wally Steinhour's position is safe, the board could decide to fire Shawna Steinhour because she is an employee, not an elected official,  regardless of the outcome of the criminal charges.

"If they can prove just cause they can terminate an employee," Nichols explained. "The employee can be found innocent or guilty-- doesn't matter. The board still has the right to make that decision."

Wednesday night, in a closed-door executive session, the superintendent gave his recommendation to the board on what to do about Shawna Steinhour. The board could decide to keep her on paid administrative leave, to terminate her contract, to ask her to resign, or could return her to regular status. It's a process that will require hearings and could take quite some time. Wally Steinhour is not facing any criminal charges at this time.

Thursday, April 18, 2013

Former Muskegon Community College cashier charged with embezzling nearly $4,000 in Michigan

A former cashier for Muskegon Community College was arraigned Wednesday on a felony embezzlement charge for allegedly stealing nearly $4,000 from the college.
Amy Beth Boucher, 31, of Muskegon, is charged with embezzlement by agent or trustee of between $1,000 and $20,000, which is punishable by up to five years in prison. Muskegon County District Judge Michael J. Nolan set a bond of $10,000, which was posted, and scheduled a preliminary examination for April 30.
According to Senior Assistant Muskegon County Prosecutor Matt Roberts, Boucher’s employers became suspicious when a bank deposit that should have been made, wasn’t. Roberts said Boucher allegedly had been taking money from payments made to her at the college. 
College officials conducted an internal investigation, determined that police should be notified and called police in late February, according to police officials.
Allegedly $3,844 was embezzled, Roberts said.

New Orleans Police Department says feds now looking into 2011 embezzlement from Lusher Charter School

The New Orleans Police Department is working with federal investigators in an embezzlement case from 2011 at Lusher Charter School that so far has led to no charges against the admitted embezzler.
“They are interested in moving forward with a federal prosecution,” Officer Garry Flot, police spokesman, said Wednesday via email.
Lauren Hightower, a former accountant at the Uptown school, was discovered by administrators to have forged signatures on checks adding up to $25,800. The investigation into her activities is focused on the forgeries.
The school started investigating the matter after an administrator noticed that some checks were missing. Hightower admitted writing one check for $5,000, but according to the police report, the school found that six checks for the school’s account at Whitney National Bank had been cashed.
Hightower was fired from her post; she later returned the money. School officials said she reported herself to the State Board of Certified Public Accountants, which licenses CPAs. Her license has been revoked, according to the agency’s website.
Hightower has not been charged with theft or embezzlement. The detective on the case, Michael Riley, told the Lens in March that the speedy return of the money by Hightower’s lawyer rendered the theft charge a “moot issue.”
Instead, Riley said, the police had turned its attention to forgery charges. He said that Hightower would be charged by the end of March. A month later, no charges have been filed.
Flot said that Riley has been talking with a representative from the Inspector General wing of the U.S. Department of Education, along with Assistant U.S. Attorney Tracey Knight and the Orleans Parish District Attorney’s Office, over how to proceed.
The U.S. Attorney’s office was not immediately available for comment. A message left with the District Attorney’s office was not immediately returned.

Wednesday, April 17, 2013

Woman pleads guilty to PTA embezzlement in Missouri

With the outcome of a PTA embezzlement case finally decided, Blue Hills PTA president Chris Ford is ready to move forward.
“It has been a long and drawn-out process,” he said. “But I am glad it is over. I am glad for us, and I am glad for her. It is time to move forward and learn from this.”
Mary A. Ward, 32, of Independence, pleaded guilty Monday to theft of funds from the Blue Hills PTA account. She agreed to five years probation, with a suspended imposition of sentence (which means that if she successfully completes her probation she will not be imprisoned), 120 days of electronic home detention, 100 hours of community service and a letter of apology to the Blue Hills PTA.
Ward also agreed to not become involved in the handling of funds for any civic organization and agreed to repay Blue Hills the $22,000 she took from the account. The repayment included $15,000 that was paid on Monday, with the remaining balance to be paid at a rate of $120 per month.
Ward was treasurer for the Blue Hills PTA, which is in the Fort Osage School District, during the 2010-11 school year. When she left the position in summer 2011, the new treasurer reported that there was approximately a $22,000 discrepancy in the account. According to the Jackson County investigator’s report, Ward kept her own spreadsheet of the PTA finances, which she reported to the PTA board. However, the board members did not have access to the actual Bank of America statements.
It was also discovered that here was a check/debit card for the PTA account with Ward’s name on it. The executive board members were unaware of the card’s existence, which was not authorized.
Ford said the PTA has learned a lot since they were made aware of the bank account discrepancies. He said since that discovery, new safeguards have been put in place so that something like this cannot happen in the future.
“We definitely learned that you cannot be safe enough when dealing with money,” he said. “You have to have safeguards or a check and balance system in place to protect yourself. If we had done that from the beginning, this never would have happened in the first place.”
The PTA unit had been raising funds to implement a four-year plan to purchase an iPad cart for the school. However, since this incident occurred, the Fort Osage School District has started implementing its 1:1 program, which has the goal of putting a piece of technology such as a tablet or laptop in the hands of every student. Next year, every elementary school as well as Fire Prairie Middle School will have carts with Goggle Chromebooks available for teachers and students.
Ford said he is meeting with Blue Hills principal Monica Shane later this week to discuss what to do with the money that Ward has already paid back to the PTA.
“It is a large influx of money,” he said. “I am meeting with the principal to discuss what to do as we move forward. This is the school’s money, so it will be spent on something for the kids.”

Tuesday, April 16, 2013

Onalaska, Wisconsin woman gets jail in school embezzlement

A woman who stole  $400,000 from the La Crescent-Hokah School District to fuel a gambling addiction has reached a plea deal with prosecutors and will pay back some of the money.
Mary Chris Turner will also serve one year in jail and be placed on probation for 20 years. She’ll be sentenced May 8.
An accounts-payable clerk in the district, Turner stole the money over 10 years by making cash withdrawals on district credit cards and cashing checks written to herself.
Turner told Judge James Fabian she used the stolen money to sustain her gambling habit, which, according to police reports, included trips to a local casino and bingo at The Church of the Crucifixion in La Crescent.
Turner said she is being treated for her addiction, something she’ll continue in jail. She’ll also have work privileges.
Though Turner stole $416,000, her plea requires her to pay the district $292,671. The district could recoup another $100,000 through insurance.
“If I may say, my husband and I feel comfortable that we will get this paid off within five years,” she told the judge.
The district supports the plea deal, Superintendent Ron Wilke said.
“We’re working very diligently to address this and to do everything in our ability to make sure this does not happen again,” he said.
Since the incident, Wilke said the district has reviewed all its securities and controls in the district office and individual buildings.
According to the state auditor’s office, 17 of the 81 fraud cases reported in 2012 involved school districts.
Only 3 percent of the cases are uncovered through the annual audit, which is how La Crescent-Hokah discovered its missing money.

Ohio sports booster pleads guilty in embezzlement

Southwest Ohio prosecutors say a longtime high school sports booster has pleaded guilty in an embezzlement case.
The Warren County prosecutor's office says 61-year-old Thomas Harves of Springboro pleaded guilty to one count of aggravated theft. Common Pleas Judge James Flannery ordered a presentencing investigation.
Prosecutors say the man signed and cashed more than 300 unauthorized checks from the Spring Athletics Boosters account, totaling more than $400,000. They say he paid back much of the money.
He had served on the boosters' board as president and later treasurer.
Police say they found no evidence to suggest anyone else was involved in embezzling funds from the boosters. Board members had gone to the Springboro police department in 2012 with their concerns.
A message for comment was left Thursday at Harves' home

Substitute teacher steals $7k from Duplin County school in North Carolina

Police said a substitute teacher embezzled almost $7,000 from a Duplin County elementary school.
Donna Godbold, 48, was arrested Monday morning. According to police, Godbold stole $6,913.30 from the Parent Teacher Organization of Beulaville Elementary School. The embezzlement happened from April 18, 2012 through April 1, 2013, investigators said.
Godbold had access to the PTO credit card, and used the money for personal purchases, officers said. Members of the PTO noticed inconsistencies on the group's bank statements and notified the principal, who called police.
Godbold is a substitute teacher and substitute bus driver at Beulaville Elementary. She was charged with embezzlement, obtaining property under false pretense, and financial card fraud. Godbold was released on a $25,000 bond. Her first court appearance is scheduled for April 19.
The S.B.I. also took part in the investigation. A Duplin County Schools official says Godbold was fired Monday and had been employed since September 2009.

Wednesday, April 10, 2013

Charter school operators guilty of misusing funds in California

The couple running Ivy Academia could face prison time over the $200,000 in public funds. The case is seen as having major implications for other charters.

In a case that could have impact statewide, a Los Angeles jury Friday found the operators of a west San Fernando Valley charter school guilty of illegally taking or misappropriating more than $200,000 in public funds.
Together, Yevgeny "Eugene" Selivanov, 40, and his wife, Tatyana Berkovich, 36, faced 26 felony counts for using state money in ways they insisted were legal under laws that apply to nonprofits and charter schools in California. Over several years, for example, they spent more than $34,000 on meals, entertainment and gifts that they classified as business expenses or gestures of appreciation for teachers.
Charter advocates followed the case closely because it could expose other operators to prosecution and, because, they said, it could undermine the flexibility that is benefiting more than 410,000 California students now enrolled in those campuses. For charter critics, the result is a long overdue rebuke of an anything-goes mentality that they contend sometimes abuses the public trust and drains resources from students.
"This message is going to resonate throughout the charter school community," said prosecutor Sandi Roth. "You can't spend the charter school funds for anything you want. It has to be money spent on the kids and the schools."
Charters are independently managed, publicly funded and exempt from some rules that apply to traditional schools.
Defense attorneys argued that a charter school — California has nearly 1,000 — should be treated as nonprofits, which have flexibility in spending money, provided it furthers the mission of the organization.
"This case will have huge impact on charter schools," said Roger Lowenstein, who runs the L.A. Leadership Academy charter. "Now we are threatened with jail if we give a teacher a Christmas bonus of a $50 Target card, as we do."
Selivanov and Berkovich started Ivy Academia, a charter school of 1,100 students that operates on three campuses, in 2004 and remained in charge until their arrests in 2010. The school had strong test scores, financial stability and a waiting list of applicants.
Such success was what mattered most, argued witnesses for the defense. Indeed, in creating charters, the idea was to trade flexibility for academic accountability.
"The prosecution seeks to undermine the cornerstone of what makes charter schools successful — their freedom from the rules binding traditional district schools," said attorney Anne A. Lee, in a brief on behalf of the California Charter Schools Assn.
The monthlong trial drew heavy hitters from the charter community as witnesses, including Lowenstein; former L.A. school board president Caprice Young, who headed the California Charter Schools Assn.; and charter pioneer Eric Premack, executive director of the Charter Schools Development Center in Sacramento.
After more than a week of deliberation, jurors found the couple guilty of misappropriation of public funds, embezzlement and filing false tax returns. Selivanov, who had a greater role in managing finances, also was convicted of false accounting and money laundering. He faces a maximum sentence of about 19 years and Berkovich about 71/2 , prosecutors said.
Expenses classified as "teacher appreciation" activities included occasional holiday or bowling parties, a few involving alcohol purchases. There also were gift cards and baby gifts.
The pair also bought ads to promote the school, made charitable contributions and joined organizations with school funds. This money also paid for flowers for key local figures, including then-City Councilman Jack Weiss and school board president Monica Garcia, documents showed.
After the trial, one juror noted that some expenses "seemed more overtly personal."
These included $12.99 for Speedo swimwear. There also was a $995 seminar on how to limit your personal tax bill.
"Mistakes were made," said defense attorney Nina Marino. "Mistakes are not a crime. Mistakes are mistakes."
Some charges centered on the lease for the main campus on De Soto Avenue in Woodland Hills. In 2004, the couple negotiated a 10-year lease for $18,390 a month. But three years later, they began charging the school $43,870 a month for a sublease. At the same time, Selivanov and Berkovich took on responsibility for a $520,000 bank loan to the school.
The prosecution characterized the deal as a moneymaking scheme.
"They had a fiduciary duty to keep the rent as low as possible," said Roth.
The defendants' annual salaries rose as high as $160,000 apiece, compensation which was approved by the school's board, as was the lease.
The two directors emphasized the teaching of entrepreneurial skills, and they were known to push the envelope with their own practices, such as concurrently running a fee-charging preschool. They also joined a few other charters in suing the L.A. Unified School District for better access to district facilities.
The prosecution grew out of an investigation by the district's inspector general.
In a recent interview, Berkovich, who still has a child at the school, said she's concerned that it has declined in the couple's absence.
"Both Eugene and I put our heart and soul into Ivy," she said.

Embezzlement charges often linked to gaming

A closer look at some high-profile embezzlement cases in the Fox Valley shows a connection to compulsive gambling.
Recently, the treasurer of the Fox Valley Youth Baseball League was sentenced to two months in jail and placed on probation for stealing $20,000 from the organization. The defendant blamed a gambling addiction.
An Appleton woman also blamed compulsive gambling for embezzling more than $300,000 from Thrivent Financial for Lutherans last year. She told police she began to steal when she could no longer keep up with her bills. Prosecutors dropped the case after an agreement was reached with the company.
Rose Gruber, executive director of the Wisconsin Council on Problem Gambling, said the majority of gamblers who steal from their employers are otherwise law-abiding citizens.
"For the most part, they have never been in trouble before," Gruber said.
But once they get hooked on gambling, the losses can add up quickly.
"The more you do it, the more you need that high," Gruber said. "It progresses as you go. It almost becomes make-believe money."
Bob Pederson, the former president and chief executive officer of Goodwill Industries of North Central Wisconsin, reflected on an embezzlement case that rocked the organization in 2003.
The controller of the Menasha-based nonprofit was accused of embezzling more than $500,000 to satisfy a gambling addiction. The controller was eventually convicted, sentenced to five years in prison and ordered to pay restitution.
"I wasn't completely aware of the nature of intensity of what goes on with gambling addictions," Pedersen said. "It's a big issue. And a lot of people are into some pretty deep water."
Pedersen said there are likely other embezzlements arising from gambling losses that are never made public.
"My sense is it's a genuine problem," he told The Post-Crescent (http://post.cr/17mRsHd). "It's real. There's no question that it's an issue and the fact that gambling is so prevalent in Wisconsin just contributes to the problem."
Cathleen Starck Wille, a counselor with The Samaritan Counseling Center of the Fox Valley, sees the connection between a gambling addiction and embezzlement.
"You always hope that someone will stop or get help before they get to that point," she said. "They always believe they are going to pay it back with another win. They just know that they can't stop."

Accused Seattle schools embezzler pleads guilty to theft

The former Seattle School District official at the center of an embezzlement scheme has pleaded guilty to 36 counts of theft.
Silas Potter was the former director of the Seattle School District's small business program, which was set up to help minority and women-owned businesses win more contracts.
Potter is accused of handing out $250,000 worth of contracts to companies that didn't do much, if any work. A state audit also found that he signed off on about $1.8 million in questionable deals. In some cases, prosecutors say Potter set up dummy businesses and issued fraudulent invoices.
Potter was arrested on Saturday after failing to show up for a pre-trial hearing on April 2. A judge issued a $100,000 bench warrant for his arrest.
Prosecutors say Potter faces three to five years in prison when he's sentenced on May 24.