Reposted from the This Week in Nonprofit Fraud Blog – March 31, 2014
Lord and Lady on the Run
Photo courtesy of The Daily Mail
March 29, 2014: Minnesota authorities continue to search for “Lord and Lady” Chisholm, accused of fraudulently claiming welfare and medical assistance benefits from the states of Minnesota and Florida. Investigators found that the couple had failed to disclose all their assets on applications, including (1) an 83-foot yacht worth $1.2 million, (2) a 5,800 square foot lakeside home, (3) ownership of a championship Cavalier King Spaniel breeding kennel, and (4) over $3 million in bank deposits. The Chisholm’s received more than $167,000 from the two states in welfare, food stamps, and prenatal medical assistance during Lady Chisholm’s 2007 pregnancy. The couple purported to be Scottish aristocrats, descended from Clan Chisholm in the Scottish Highlands village of Struy, a claim that has not been investigated. According to a law enforcement official, “Mr…sorry. Lord and Lady Chisholm the third are fraudsters of the first degree.”
See more on this case at ABC News
- Never underestimate greed!
- Even though the Chisholm’s had plenty of money to support their lavish lifestyle, it apparently still wasn’t enough for them.
- Fraud charges of this nature normally result in probation in Minnesota, but prosecutors have said that they intend to request harsher sentencing because of the outrageousness of the crime.
Raffa Forensic Practice Tips:
- Remember, anyone can commit fraud, even “aristocrats.”
- Does your organization perform background checks on current and prospective employees to try to avoid hiring bad actors?
Sparkling In Prison
Photo courtesy of Ian and Wendy Sewell
March 28, 2014: The Office of the Inspector General, Social Security Administration, announced the conviction of Jason Boutros for a $220,000 disability fraud case. Boutros and three family members collected disability checks over years, even as they lived in Lebanon for extensive periods of time, making them ineligible. Employees at a pharmacy where the family picked up prescriptions reported Boutros to a fraud hotline after noticing that he “wore lots of jewelry” and showed them photos of trips to Lebanon. Investigators found a tanning bed and Mercedes roadster in Boutros’s home. Boutros was sentenced to prison and will pay $221,000 in restitution. His sister awaits sentencing on a guilty plea in the same case; his parents have been charged but fled the country.
See more on this case at the Social Security Administration – Office of the Inspector General
- According to the Association of Certified Fraud Examiners, the perpetrator is “living beyond his or her means” in nearly 40% of fraud cases.
- Paying close attention to detail is critical to uncover fraud. In this case, the Social Security Administration is extremely thankful for the pharmacy employees who found Boutros’s flaunted wealth to be incongruous with the benefits they knew him to be receiving.
Raffa Forensic Practice Tips:
- An organization’s management should always be keeping an eye out for behavioral red flags that may indicate improper behavior by an employee.
- Has your organization been trained on how to detect and prevent fraud?
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