Tag Archives: Non Profit Fraud

Equal Pay Day 2017

Equal Pay Day 2017 was yesterday, April 4, 2017.   All sorts of news stories have been posted, tweeted and blogged. As of now, it will take 169 years for parity in the work world.  But in the world of embezzlement and fraud I can tell you it is going to take even longer. Here are some statistics to get started.

Statistic #1-depending on the position, women have an even bigger glass ceiling. In 2016 women stole on average approximately .56 for every dollar stolen by a male.

Statistic #2-breaking it down by position and comparing male and female employees the women steal approximately .78 cents of a man. Comparing managers, the female managers steal approximately .84 cents. But the biggest variance is between owners and executives. This is where the men rule.  A woman will only steal, on average, .36 as compared to a man. Below is the link for the ACFE Report to the Nations 2016-see page 58 for gender:


So what does that say? Anecdotally I will say that women are in “lesser” positions than men on average and therefore have more supervision. If you are a male owner/executive you are going to rob the company blind.   As it has been detailed before, audits do not catch fraud generally speaking. But more positions that are held by women have some internal controls: two signature authorization, limits on purchase cards etc.

Not getting political but Trump has just pulled back the 2014 Fair Pay and Safe Workplaces Act put in by Obama.  This is not going to help matters.

I just was in Philadelphia doing the closing keynote for the IIA Philadelphia.  I now have a survey card that I pass out to attendees.  Just through the initial assessment I will tell you that tips and alert lines are how many people get caught.  That has also been my personal experience.

When workers see something wrong they may say something.   When people don’t think the system is fair they may not speak out or worse they may neutralize their behavior and appeal to higher loyalties and possibly may resort to embezzlement.

Stay tuned for the analysis of the attendees.

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Stealing from School Booster Clubs Who Knew?

Watching the Today Show this morning I saw the newest Rossen Report http://www.today.com/news/parents-steal-thousands-dollars-school-booster-clubs-2D79736779  regarding thefts from booster clubs.  This comes as no surprise to me.  Just this last week down the road from my home an “incredible” volunteer was arrested for stealing from a local school.  http://bit.ly/1kZFpXC

These thefts weren’t discovered during an audit.  What booster club does audits?  Have booster clubs heard of internal controls?  This theft was discovered during a review of a videotape to watch an altercation between students. It was completely stumbled upon.   How long has this been going on?  The school district has no idea.  She has been a volunteer for 8 years.  According to the county sheriff’s spokesperson “She had access to money in a lot of ways,” Ray said.

This is so sad especially when our kids and parents work so hard to get their kids involved in awesome school activities.  In these days of budget cuts and mandatory testing there is no money leftover for “extras”.  Kids and parents volunteer their time and give their hard earned money for these clubs. 

Taking a look at Bureau of Labor Statistics women volunteer more than men.  http://www.bls.gov/news.release/volun.t01.htm  That just makes sense to me.  So the next step in that thinking is that women will steal more than men from these types of groups. 

In the Rossen Report they showed a few men but in my anecdotal experience it is more women than men that steal from these organizations.  Many organizations never publicize the “skimming” or thefts because they worry about the bad publicity.  At least once a week I receive a story about another “incredible” volunteer that has stolen from the soccer team, band group or cheerleading squad. 

Cookie dough anyone??



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Lorena Varela, Oxnard, CA pleads guilty to $400k theft

From the Ventura County Star:

An Oxnard woman accused of stealing more than $400,000 from a nonprofit has been sentenced to four years and eight months in prison after pleading guilty to forgery and other charges.

Prosecutors said Lorena Varela, 47, was initially charged with 18 counts of forgery, grand theft and computer fraud. In June, she pleaded guilty to six felony forgery counts and two special allegations related to money she embezzled from Arc of Ventura County, said Marc Leventhal, senior deputy district attorney.

Varela was a bookkeeper for the Ventura-based nonprofit, which serves residents with developmental disabilities, and was accused of stealing $427,000 from it.

Leventhal said Varela worked for the organization for 10 years and that the thefts occurred from April 2004 to September 2012. He said she falsified electronic ledgers to show money had been paid to vendors. Instead, Varela used a signature stamp of an authorized Arc signatory and signed checks to herself, Leventhal said.

“There was proof that during the 8½ years she was working there, there were 500 separate acts of theft,” Leventhal said. “(Varela) represented herself as someone who was loyal and gained their trust. She covered up her scheme and relied on her hope that no one would look at these canceled checks she made out to herself.”

Leventhal said Varela was caught after another employee noticed a discrepancy between checks and the ledger, which triggered an audit.

Varela was arrested June 11 and was free on $30,000 bail until Ventura County Superior Court Judge Kevin McGee sentenced her Wednesday. Although she was sentenced to four years and eight months, she could serve half the time and then be eligible for parole because her charges were nonviolent offenses, Leventhal said.

Varela also was ordered to pay restitution to Arc.

Ron Bamieh, who represented Varela, said she immediately admitted to the theft when confronted. Bamieh said she was “going through a life crisis” and trying to save her house and marriage.

“She immediately broke down … cried and admitted to what she did,” Bamieh said. “There is no excuse morally and ethically about what she did, but this also shows how lax they (Arc) were in their bookkeeping. This is a sad case all around.”

Calls to Arc administrators were not returned, but Patricia Schulz, Arc’s CEO, said in an email, “We’re glad to close the chapter on this and move forward to celebrate the 60th anniversary of the agency’s mission.”

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