The House Always Wins | Nonprofit Fraud Blog

Reposted from the This Week in Nonprofit Fraud Blog – April 7, 2014

​The House Always Wins

casino

Photo courtesy of Legal US Pokersites

April 4, 2014: Kris Gentz, the Director of Security for the Plano (Texas) Independent School District (ISD), pled guilty to stealing more than $2.5 million from the district to fund his gambling habit. Gentz was responsible for awarding contracts for security systems for the district’s schools. With help from friends, he created two companies, Fire System Specialists and Digital Security Solutions, which he then used to generate fraudulent invoices to submit to Plano ISD, where he could personally approve them for payment. While some money may be recovered through seizure of a number of cars, trucks, boats, and other property, Gentz appears to have lost the majority of the stolen money at casinos in Shreveport, Louisiana. According to prosecutors, the casinos “cultivated [Gentz’s] business because he was such a spectacular loser at the games.”

See more on this case at CBS Dallas-Fort Worth

Lesson Learned

  • This massive fraud could have been stopped by a simple segregation of duties. Gentz wielded tremendous power in the school district, in that he could choose vendors and approve payments to the same vendors.
  • Plano ISD is lucky that the fraud didn’t also place students and employees at risk of harm, since money that was meant to be spent on security upgrades instead went to casinos.

Raffa Forensic Practice Tips:

  • Never build your internal controls in a way that relies on trust!
  • Does your organization periodically review duty assignments to ensure that appropriate segregation exists?
  • Does your organization review its vendor files to look for red flags or conflicts of interest?

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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