Harsher Penalties on the Way | This Week in Nonprofit Fraud

Reposted from the This Week in Nonprofit Fraud Blog – February 17, 2014

A Very Generous Employer

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February 15, 2014: Aretha Holland-Jackson pled guilty to stealing $800,000 from the D.C. Department of Human Services (DCDHS) over two and a half years using a series of fictitious identities. Holland-Jackson, a DCDHS employee, used fake names and social security numbers to obtain food stamps, cash, and other public benefits that were administered by the agency. Authorities began investigating the case after receiving an anonymous tip. Holland-Jackson claimed in court that she had been manipulated into participating by an “unnamed co-conspirator” who was providing her with prescription drugs, and who is now deceased.

See more on this case at The Washington Post

Lesson Learned

  • Anonymous tips are the top method of detecting fraud. These tips, coupled with continuous monitoring for fraud can be an extremely powerful tool for an organization. In fact, according to DCDHS, this investigation was aided by “new systems that detect fraud a lot sooner.”

Raffa Forensic Practice Tips:

  • Fraud detection capabilities are strongest when your organization uses every method available to you.
  • Does your organization have continuous monitoring methods that use your available data to track down possible fraud?
  • Does your organization have an anonymous tip hotline or other reporting mechanism?

Harsher Penalties on the Way

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February 15, 2014: A Connecticut state representative has proposed a bill to increase penalties for defrauding the state in the wake of a major fraud case. In January, the former finance director of Winchester, Connecticut, pled guilty to stealing more than $2 million from the town. According to the representative, “the devastation will take the town years to overcome.” Connecticut currently has no mandatory minimum sentence for first-degree larceny.

See more on this case at The Register-Citizen

Lesson Learned

  • The threat of increased criminal penalties can be an effective deterrent to an individual considering committing a fraud. Significant jail time may be a great enough risk that a potential fraudster thinks “it’s not worth it.”
  • Sadly, many organizations fail to put effective deterrents in place until after a fraud has already been committed. Deterrents are most effective when put in place early; don’t wait until it’s already too late.

Raffa Forensic Practice Tips:

  • Consider what deterrents your organization can put in place to prevent frauds. Deterrents must be publicized to be fully effective; a secret deterrent will stop no one.
  • Does your organization have a publicized fraud policy, including a “no tolerance” clause?

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

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