Reposted from the This Week in Nonprofit Fraud Blog – April 21, 2014
Liar, Liar, Pants on Fire
Photo courtesy of Michael Krewson
April 14, 2014: Richard Bontrager, the former treasurer of Mayetta Rural Fire District No. 1, was sentenced to 30 months in prison for embezzling over $400,000 from the district’s bank accounts. For four years, starting in 2008, Bontrager issued checks payable to a fictitious company whose accounts he controlled. Since Bontrager did not have the authority to sign all these checks by himself, he forged the signatures of various members of the district’s board of directors. He also falsified loan documents and doctored board minutes to obligate the district to a pair of loans on utility vehicles. In addition to the jail sentence, Bontrager was ordered to pay more than $427,000 in restitution to the district.
See more on this case at The Topeka Capital-Journal
- There is no such thing as a perfect internal control, since a determined fraudster will find a way to circumvent any obstacle.
- While the Mayetta Rural Fire District did not allow Bontrager the freedom to issue checks, he had little difficulty circumventing that control by forging signatures. Unfortunately for the district, they had not implemented the type of detective controls that might have spotted this fraud earlier, instead of allowing it to continue for four years.
Raffa Forensic Practice Tips:
- Remember, your organization is always at risk of fraud, no matter how strict your prevention measures; you must always also have mechanisms in place to detect ongoing frauds!
- Does your organization have a fully developed internal control scheme that includes both preventative AND detective controls?
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: