Reposted from the This Week in Nonprofit Fraud Blog – January 6, 2014
He Did it All for the Children
Photo courtesy of Penarc
January 3, 2014: Steven A. Bolden pled guilty to stealing more than $7 million in surplus computer equipment from the General Services Administration’s “Computers for Learning” program. The program is meant to provide surplus government computers to needy educational charities. Bolden formed more than a dozen fictional charities in the Los Angeles area, none of which served as much as a single student. He received 19,442 pieces of equipment, with an original purchase value of over $30 million dollars, which he resold. Bolden was caught red-handed by the GSA Inspector General after posting freshly stolen computers on Craigslist. He is scheduled to be sentenced in April.
See more on this case at SeattlePI.com
- Verify the identity of your grantees and beneficiaries! In this case, Bolden was clearly providing invalid addresses for his supposed educational charities, such as storage lockers.
- You can uncover fraud simply by cross-referencing your available data. You may find a common link between seemingly separate companies, such as a shared point-of-contact, phone number, or bank information.
Raffa Forensic Practice Tips:
- Conduct structured due diligence on potential grantees and beneficiaries to make sure that they are eligible to receive the funds or goods you are providing.
- Does your organization periodically review your grantee, vendor, and employee data for unexpected similarities?
Rub-a-Dub-Dub, Two Stories About a Tub
Photo courtesy of Lienhard Schulz
January 7, 2014: The Brisbane District Court sentenced Lex Adams to 42 months in prison for fraud after he falsely claimed AUS$58,000 in disaster relief funds. In March 2011, Adams submitted a claim for his houseboat, which he said had been washed away during severe flooding in January 2011. The only problem is that during March 2011, an Australian boating magazine published a story in which he said that he had crashed the boat into a sandbar in August 2010. The Australian government agency that administers the disaster funds received an anonymous tip, and an investigation proved that the story in the boating magazine was true.
See more on this case at The Australian
- Anonymous tips are the single greatest method of uncovering frauds, be they large or small. In this case, an open-and-shut case all hinged on a simple tip from a third party.
Raffa Forensic Practice Tips:
- Make sure that you are providing all parties who might have awareness of a fraud with a mechanism to tell you about it. That doesn’t just mean employees, but also vendors, customers, and any other knowledgeable parties!
- Does your organization have a mechanism in place to receive internal and external fraud tips?
DON’T BE THE NEXT VICTIM OF FRAUD!
The Raffa Forensic Accounting Services Practice offers a wide variety of fraud prevention and detection services including Fraud Risk Assessments, Background and Workplace Investigations, Fraud and Internal Investigations, Transactional Due Diligence Investigations, Anti-Fraud Consulting and Training, and Computer Forensic Analysis.
For more information on the Raffa Forensic Accounting Services Practice please visit us at www.raffa.com/ProfessionalServices/Forensic/ and the Nonprofit Fraud Prevention Institute at www.raffa.com/Fraud.
You can also contact the following Raffa professionals with any questions or if your organization needs assistance in fraud prevention:
Lawrence J. Hoffman, CPA/CFF, CVA, CFE, Senior Partner: Lhoffman@raffa.com
Leslie C. Kirsch, CFE, Manager: Lkirsch@raffa.com