Fiscal Rangers

Massive Bitcoin Ponzi Scheme Just Collapsed in Brazil - Don't get caught like this

Investor Alert: Watch out for employers or investors being seduced into investing in Bitcoin. This AP article describes the collapse of a Bitcoin investment Ponzi Pyramid Scheme in Brazil, losing millions of customer investments. One way the organizer, a former waiter, grew the firm was finding "friends and family" members to invest from religious groups. The same tactic can be used via Chambers of Commerce, etc., enticing corporate or individual investors to follow their peers into the scheme. If you don't know what a Ponzi scheme is, research it! Individuals lost retirement funds, but what if some pension funds also invested to get a "guaranteed" investment return??? Employees should ask their Treasurers if they do any investment in Bitcoin and investigate it for risks. Read more →

Our video of Col. Phil Waldron, cybersecurity and election fraud expert at Conservative Watch, USA Apr. 28, 2021

The video of the recent Conservative Watch USA-Villages April 28, 2021 meeting featuring Election fraud and cybersecurity expert Col Phil Waldron was uploaded at: https://youtu.be/AWq4f-3UKaM About the speaker, Col. Phil Waldron, Cybersecurity and Elections Integrity and fraud prevention expert: Colonel Phil Waldron(Retired) served in the US Army for 30 years and is a decorated combat veteran with extensive experience in Surveillance and Reconnaissance; Strategic Communications; Joint Information Operations; Cyber/Computer Network Operations; OPSEC; All -Source Intelligence Analysis; Unconventional Warfare and Operations Integration. He is most well known by the public for his recent testimony regarding the foreign and domestic interference in our election used by the Dominion Voting Machines that he presented at a hearing in front of the Arizona legislature defending President Donald J. Trump. Video by Vance Jochim of FiscalRangers.com Read more →

Will your local City or County agency be hit with ransomware like Baltimore, costing $18-million?

Will your local city or county government agency get hit with ransomware like Baltimore, MD and then their School District a year later? Read this and pass it on to your local government council or board to educate them and ask for a public hearing on whether they are vulnerable or not. Read more →

Election Fraud 2020 - An overview of how real time votes in PA were "flipped" with hidden software

This rather technical video shows real time voting counts being changed by Dominion voting systems to benefit Biden in PA. Read more →

Liberty County, FL Supt. of Elections suspended by FL Gov. Ron DeSantis due to $40k fraud

The FL Gov. Ron DeSantis suspended an elected Supt. of Elections in tiny Liberty County, FL (near Tallahassee) for an alleged $40 in fraud (not voter or election fraud) AND Google search has suppressed finding any articles or news about it if you use their search engine. But, Bing found many recent articles. See my updates also. Read more →

Are Email Providers like Yahoo, AOL & GMAIL routing Republican Campaign emails to spam folders but not Democrats?

An email campaign consultant ran a study and found that big email providers like Yahoo and AOL were favoring liberal political candidates by routing Republican candidate emails to spam folders, such as in Florida, 100% of Rick Scott tested emails were routed to recipient spam folders, but ZERO % of Democrat Bill Nelson's emails went to spam. Read more →

Voting Fraud Update: US Agency that certifies voting machines was hacked, Russian selling their logins

US Agency responsible for certifying voting machines is hacked and staff login credentials are offered for online sale by Russian hacker. Just another example of the loose systems used for US voting. Read more →

Palm Beach County Audit Discloses Favoritism & Cronyism in Selecting Contractors

Tavares, FL April 17, 2015 This is older news, but a relevant example of local government cronyism, bribery, and waste in Palm Beach County, FL Source: Orlando Sentinel: "Lunches, golf outings and vacations involving a Palm Beach County official and government contractors created a potential perception of favoritism in awarding $9 million in publicly funded work, according to the county's inspector general. The inquiry raised questions about Deputy County Engineer Tanya McConnell's role in directing county contracts to three firms represented by people she described as "friends." While Inspector General John Carey found that no laws were broken, he did call for changes to the county's contracting process. He also forwarded the case to the county's Ethics Commission for further review, which rules on potential violations of the county's ethics code." READ more HERE. The above article provides an example of how a strong County Director can bluff staff into giving business to favored vendors who are "friends". It is amazing she was that stupid when the County hired an Independent Inspector General several years ago due to political corruption. Link to Palm Beach Inspector General's website - which has link to the above mentioned 4/16/2015 "Engineering Department" audit. Vance... Read more →

Small Town California Newspaper gets Pulitzer for Investigation Series on Local School District Corruption

A California school district with only four schools and 6600 students suffered huge fiscal losses due to cronyism and corruption and overpayment of salaries. The local paper published a 10-part investigative series and won a Pulitzer. One of the lessons is the corruption that can occur when contracting firms support elected school board members to get huge school bond issues totaling $200-million and related projects approved. Additionally, the District Superindant was paid $663,000 in salaries, benefits and perks, which was much higher than the Superintendant of the much larger Los Angeles School District. Read more →

FiscalRangers School Alert: Los Angeles Unified School System suspends contract for iPads due to "conflicts" and poor performance

Aug. 26, 2014 The Los Angeles Times reports questionable conflicts in iPad and Pearson publishing purchases at Los Angeles Unified School District (my mother taught there). http://www.latimes.com/local/education/la-me-deasy-ipads-20140826-story.html "The suspension comes days after disclosures that the superintendent and his top deputy had especially close ties to executives of Apple, maker of the iPad, and Pearson, the company that is providing the curriculum on the devices. And an internal report that examined the technology effort showed major problems with the process and the implementation." "Last week, a draft report of a district technology committee, obtained by The Times, was strongly critical of the bidding process." Apparently there are questions about conflict of interest, including both Apple, and Pearson publishing, a well know monopoly provider of education products including software on the iPads. "In one email, from May 24, 2012, Aquino seems to strategize with higher-ups from Pearson on how to ensure that it got the job. "I believe we would have to make sure that your bid is the lowest one," wrote Aquino, who was an executive with a Pearson affiliate before joining L.A. Unified." (Talk about conflicts... rotating execs is a big red flag) I would hope there are no such... Read more →

Florida County Activists Ask Lake County FiscalRangers for Help to Resolve Corruption

Activists and TeaParty members in other Florida Counties are aware of FiscalRangers. We just got a query from one County activist group asking how they can stop corruption in their County. They listed a number of officials and issues, so here is what I sent them, and I expect to talk to them later. Vance Jochim ================================================== The Florida Grand Jury published a big report on Corruption in Florida last December and Pam Bondi has done nothing to market it to the legislature to get the recommendations implemented, even though her Attorney General Dept. runs the Grand Jury investigations. The Florida Auditor General has no “resources” to initiate citizen requests for audits. They mostly focus on CPA type financial and regulatory compliance audits, and not audits for efficiency, effectiveness or to detect and fix corruption. Almost all local government oversight is left up to local County agencies and officials. The legislative Audit Committee will not initiate citizen requests for audits, which are sent to the Auditor General, BUT they will do so if asked by a legislator. So, you need to have a legislator request an audit like what you want, and the AG may do it . But, the... Read more →

We Launch Campaign to Get Serono Labs officers Prosecuted

We normally focus on Lake County or related local government issues. This issue doesn't really affect most regular Lake County Fiscal Rangers readers, but if you want to see details of what can be done with social media to get government to actually prosecute wrongdoers, instead of just paying a fine, read on. I am separately involved in research related to a new "CCSVI" treatment for multiple sclerosis - MS (I don't have it). This week, the US Dept. of Justice (DOJ) posted a press release about a drug company Serono Labs, that had paid unreported bribes and other expenses for many doctors to market an MS drug called Rebif. The press release said bribery, money laundering and kickbacks were involved to get doctors to push Rebif to MS patients. Most MS drugs are REALLY expensive and many prescriptions are paid by Medicare or Medicaid, thus the Federal involvement. DOJ issued a press release that they had settled with Serano paying a fine of $40-million, but NO officers were prosecuted. This has upset the MS "community" evidenced by many postings on MS related Facebook pages around the world, especially since Serono was the subject of an earlier prosecution that resulted... Read more →

National Legal & Policy Center Tracks SEIU & Other Union Corruption Cases

We periodically read about union leaders running amok and stealing union funds or committing other transgressions. In 2009 and earlier, many unions like SEIU were found to be affiliated with ACORN. And, here is an organization, the National Legal & Policy Center, that TRACKS union corruption and crimes. Below is a link just to a search on the SEIU union, which is a national union, but they are the union for non-instructional workers at Lake County School Systems. The search report lists the pages and pages of listings of crimes committed by SEIU members across the country. No corporation would have such a track record among their branches or stores, but it seems the SEIU tolerates these antics and doesn't implement stronger policies and procedures to keep the crooks out. I don't have any evidence of wrongdoing in the local SEIU at the Lake County School District, but if I was a Lake County member of SEIU, would I be comfortable providing my support and dues to a national union with the constant problems listed at the link below? (or just go to www.nlpc.org and find the reports and search on SEIU ) http://www.nlpc.org/category/keywords/service-employees-international-union-seiu vj Read more →

Ethnic Based Medicare Fraud Spreading from Miami to rest of US

One of the drains on public funds that reduces funding for local government is Medicare fraud. South Florida is the home of Medicare Fraud, and it extends North. This article below talks about how much of it is now related to "home health care" scams, and is run by ethnic minority groups. So, as illegal aliens increase in Lake County, the chances of various illegal activities increases. (Hey, remember I left Orange County, CA, which had lots of ethnic crime...if they don't have education and legal documentation, they are more likely to resort to crime, and teach it to each other.) Keep that in mind when you patronize a restaurant or construction contractor that clearly is using illegal aliens. The more that are attracted to an area for jobs, the bigger the chance some will bring criminal practices with them. And, if government officials award construction contracts without checking to ensure only US citizens are working on the jobs, complain to them. vj Medicare Fraud 'Rampant' In Miami, Spreads Among Different Ethnic Communities Nationally from KaiserHealthNews.com HERE Dec 07, 2009 "Medicare fraud runs rampant in Miami-Dade" while federal experts examine how the crime spreads among different ethnic communities in different... Read more →

Baltimore Mayor Convicted of Embezzlement

One of the reasons that some elected officials get tied up in financial fraud is a tendency of entitlement after they have won or have been in office awhile. I call this a tendency to confuse social confidence with result oriented competence. A results oriented elected official obtains satisfaction from accomplishments, but a visual image or power oriented official obtains satisfaction from what they get when in office, and sometimes anything goes. So, here, the Baltimore Mayor, Sheila Dixon, was convicted of embezzlement for SOLICITING gift cards from local developers "for the needy" and instead using some of them for her own purchases. So, she only got maybe $1000 but killed her reputation, and faces up to five years in prison. The article doesn't say how the problem was uncovered, but a proper control would be having a fraud, waste and abuse reporting hotline, which Lake County does NOT have. The article briefly mentions that Dixon was also charged with financial disclosure violations, which indicates they have one, and monitor compliance in Baltimore. vjFrom CNN here Baltimore mayor guilty of embezzlement December 2, 2009 10:13 a.m. EST (CNN) -- A jury convicted Baltimore Mayor Sheila Dixon on Tuesday of embezzlement... Read more →

Palm Beach FL County Recovering from String of Corruption Charges

Palm Beach County has been going through a string of corruption investigations since January of this year, and now they are establishing an ethics office AND an Office of Inspector General. I would rather have a beefed up internal audit department. As the article mentions, the IG will be selected by a panel of attorneys and law enforcement people, without any auditors involved. Thus what happens is the focus will be to hire an attorney, probably a former prosecutor, whose focus will be on after the fact investigations, and not prevenention. Attorneys do NOT know how to define internal controls nor are they oriented to spending time to review systems and recommend improvements. Instead, their mode of operations is to use a fraud reporting hotline to get tips, or setup stings, rather than implement preventive or detection programs to prevent corruption from happening. That is what a good internal audit department would do, and that is why that is what they need, not another attorney. Read the article at the link below. vj County corruption fallout: Palm Beach County officials urge ethics office, panel here By JENNIFER SORENTRUE Palm Beach Post Staff Writer Thursday, September 24, 2009 With three former... Read more →

New York Audit Finds Dead Still Collecting Medicaid Payments

This case illustrates how, even at the State level, fraud continues to occur because government officials do NOT implement sound enough business controls to prevent fraud. In this case, New York State Medicaid auditors found 417 dead people and 912 prison inmates still receiving Medicaid payments even though neither group is supposed to get them. Officials said 296 of the death cases have been closed and $1.7million recovered from providers, like nursing homes. Thus, it seems that nursing homes can continue to bill for medicaid for dead patients, and prisons apparently have no downside in failing to report new prison inmates to the Medicaid system so they can be dropped from the rolls. In my 18 years of government and corporate audit experience, the biggest problem was always that some bureaucrat was not following procedure or using professional level control procedures to prevent such improper payments. In this case, the nursery homes should be fined twice the overpayments, and the prisons should be billed for the overpayments since neither group followed procedures to minimize the fraudulent payments. Tough love is needed in government. Favorite Quote from the article at the link below: Okay, maybe you're dead or in prison, but... Read more →

Hawaiian Grass Roots Group to Hire Corruption Investigation Reporter

It is sometimes interesting to use the search term "corruption" in a database or website and see what comes up. Doing so in the national employment database www.PrimeCB.com (run by CareerBuilder), I found the following ad for an investigative reporter to research corruption and government management issues in Hawaii for the Grassroot Institute of Hawaii. The purpose of the Grassroot Institute of Hawaii is to improve the relationship between the government and the people with the objective of improving the effectiveness of the government, the business climate and in some cases, tradition, to foster an atmosphere in Hawaii that results in maximum personal freedom for every individual. We recognize that personal freedom comes with the price of personal responsibility, accountability and respect for others. We believe each person must be free to succeed or fail in building wealth and in relationships with others. Mission The mission of the Grassroot Institute of Hawaii is to promote individual liberty, the free market and limited accountable government. Through research papers, policy briefings, commentaries and conferences, the Institute seeks to educate and inform Hawaii's policymakers, news media and the general public. Grassroot Institute is a member of the State Policy Network, Townhall.com, Americans for... Read more →

New Report Says NonProfit organizations Lose $40-billion from Fraud

I have been saying that government agencies, and other institutions, like non-profit charities, have avoided businesslike controls that would help identify fraud or corruption. Well, here is a report using data from the Association of Fraud Examiners, that says the amount lost from fraud in non-profits is huge - like $40-billion out of the $300-billion per year given to non-profit organizations. The article also describes a new IRS question on non-profit tax filing forms for 2008 that requires them to disclose instances of fraud and embezzlement. Favorite quote: But what is getting the attention of nonprofit leaders is the report’s estimate of the overall cost, which the authors put at $40 billion for 2006, or some 13 percent of the roughly $300 billion given to charity that year. “It’s a surprisingly large number,” said Paul C. Light, a professor of public service at New York University who does surveys of public confidence in charities. “We really need to take a good hard look at what’s going on in these organizations.” vj ===================================================== from NY Times at: http://www.nytimes.com/2008/03/29/us/29fraud.html?_r=2&pagewanted=1&WT.mc_id=GN-P-E-FB-WI-TXT-ME1-X-X-0000-NA&WT.mc_ev=click&oref=slogin March 29, 2008 Report Sketches Crime Costing Billions: Theft From Charities By STEPHANIE STROM The volunteer treasurer of the Madison County Humane Society... Read more →

Arizona County Manager Convicted of $630,000 Fraud

This conviction happened in Pinal County, Arizona in March, 2007 for fraud and embezzlement that started in 2000. It seems the County manager used his authority starting in 2000 to take County fee payment checks and deposit them in a separate bank account he established, and spent the funds on himself. He used his authority to intimidate staff and ignored requests to close the bogus account. He has to pay the funds back and may be spending up to 51 YEARS in prison. Read the story for more... this guy was clearly a real con artist who thought he wouldn't be caught. A good quote was from the attorney hired to investigate the fraud: He said the case should send a message "to every government official: If they misuse public funds, they will be prosecuted." vj (Note: There was no mention of internal or external auditors - the case was discovered and expanded when the Sherrif's department investigated the County Manager's mis-use of $21,000 of county funds to buy personal firearms.) ================================================ Here is a year end overview of the case, followed by an original article from March, 2007 with more details. Pinal (Arizona) County manager is sentenced In March,... Read more →

South Carolina School District Employee Benefits data STOLEN by Internet Hackers

A South Carolina School District's computer system was hacked and personal data including social security numbers of "hundreds" of district employees was STOLEN by the hackers who installed some "malicious software" on a computer in the employee benefits department. The incident was NOT discovered by the District staff, but by Federal investigators monitoring suspicious traffic on the internet. Additionally, the SAME school district was found in 2006 to be selling many older student computers without wiping the hard drives clean, and buyers reported finding personal employee and student data on them. That problem resulted in the District being sued and settling out of court. (See the second article below.) THEN, see the THIRD article below that further discusses this recent event and says the IT department earlier used an internet student portal where a parent reported she could see student info of other students, and the portal was shut down for two weeks until security was "beefed up". There are no details how the "malicious" program was installed on a benefits department computer, but clearly either anti-virus software was not working, or an employee somehow installed the program, probably without knowing it. One way is to use a memory card... Read more →

Judge Rules that Student Viewers of Gore's Movie must be warned of Inaccuracies

This is an article about a British judge who ruled that Al Gore's movie "Inconvenient Truth" was riddled with so many factual errors that students could not be forced to watch it in class without being warned about all the factual inaccuracies. Thus, the movie seems to be political fraud - skewing data and biasing results to make an unsubstantiated point. Ok, so this is from Fox News, but the writer is a specialist in uncovering junk science, and writes a good description of the inaccuracies. However, you would expect a response from the liberal Washington Post, and I have also included that below the first article. Decide for yourself, as Fox News says... vj ================================================================ from: http://www.foxnews.com/story/0,2933,303525,00.html Junk Science: Hey Al Gore, We Want a Refund! Friday, October 19, 2007 By Steven Milloy A British judge ruled on the eve of Al Gore co-winning the Nobel Peace Prize that students forced to watch "An Inconvenient Truth" must be warned of the film’s factual errors. But would there be any science at all left in Gore’s "truth" if these errors and their progeny were excised? Minutes of non-science filler dominate the opening sequence — images of the Gore farm, Earth... Read more →

Florida Labeled as Center for Billions in Federal Medicare & Health Care Fraud

Well, it seems that Florida State's southern area is a hotbed of fraud where many clinics are filing fraudulent medicare claims for HIV and other treatments. Similar to car insurance or health insurance fraud, the fraudsters pay "clients" to file bogus medicare claims, and many of the "clients" are said to be illegal immigrants. Thus another cost of illegal immigration to the taxpayer is the willingness of these groups to participate in health insurance fraud to earn incomes. Barely mentioned was a reference to another type of fraud for wheelchairs and scooters for invalids: In March, federal inspectors found dozens of wheelchair and electric scooter suppliers in Florida that ran afoul of federal rules, including phantom operations that billed the government but had no bricks-and-mortar locations. A major problem with government is that politicians pass laws for social or spending programs without enough funding for proper business and anti-fraud controls or monitoring. This needs to be changed. Maybe we need an independent review group with tough powers to prevent the rollout of any spending program until adequate procedures, controls and monitoring systems are in place to prevent fraud. Below are two articles AND the full Federal Dept. of Health &... Read more →

Florida Sheriff Resigns in $80,000 Corruption Probe

The two articles below describe the resignation of the Broward County Sheriff due to corruption. He took bribes or kickbacks of about $80,000 from vendors. It seems to be a trend in government corruption that much of the problem comes from weak purchasing controls. If they had a waste, fraud & abuse hotline, one of the vendors might have reported him. There was no details whether any internal audit agency had oversight of the Sheriff's department. vj from http://ap.google.com/article/ALeqM5gVyBagYR9KasIAU2YkX1TAr2Q_Aw Fla. Sheriff Resigns in Corruption Probe By CURT ANDERSON – 16 hours ago FORT LAUDERDALE, Fla. (AP) — Broward County Sheriff Ken Jenne resigned Tuesday after agreeing to plead guilty to federal tax evasion and mail fraud charges after a corruption investigation uncovered crimes in his outside business dealings, federal prosecutors said. The plea deal came as Jenne faced a possible grand jury indictment on more serious money-laundering charges, and it likely will mean at least a year in prison for the longtime force in state Democratic politics. Under the agreement signed Friday, Jenne will plead guilty to three counts of tax evasion and one count of mail fraud conspiracy, U.S. Attorney R. Alexander Acosta said. "Ken Jenne has been a... Read more →

Feds: Harvey Park District (Chicago area) officials misused $144,000 in government funds

This article below is about three officials, including the President and two Directors, in a Chicago area Park District (i.e. like Parks & Recreation) that siphoned off $144,000 in district funds using district credit cards plus instructing a vendor to provide kickbacks. There were no details about why they were able to do so, or the quality of the District accounting controls or audit functions. vj Date posted online: Friday, August 31, 2007 from: http://www.thetimesonline.com/articles/2007/08/31/news/top_news/docba312002de2d415a862573480001e6db.prt Feds: Harvey Park District (Chicago area) officials misused money 3 park leaders accused of using taxpayer money for personal expenses BY CHRIS KELLER and LAURI HARVEY KEAGLE The Times CHICAGO | Three Harvey Park District officials Thursday pleaded not guilty in federal court, hours after the FBI arrested them at their south suburban homes on charges of using $144,000 of taxpayer money to pay for personal expenses. Park District President Julius Patterson, 51, of Harvey; Park District Director Kendall Parrott, 48, of Markham; and Park District Assistant Director Linda Hudson, 47, of Harvey, entered the pleas before U.S. District Judge Charles Norgle at the Dirksen Federal Building in Chicago. (Read the indictment.) Each are charged with three counts of wire fraud and one count of... Read more →

Detroit Area School District Manager Caught in $200,000 Fraud

So this purchasing manager in a Detroit area school district purchased goods for the district at inflated prices from a company he had an ownership interest. Then, at the end of the article, they talk about an earlier incident where school principal in the same district siphoned off $400,000 through the day care program for the district, and was sent to prison. In addition, they mention: " Deldin said Chippewa Valley has implemented a number of new measures to reduce the district's exposure to theft including a fraud telephone hotline that employees or parents can report suspicious activity; the hiring of an independent auditor to regularly review accounting procedures; and performing credit checks on all new administrators." Lake County doesn't currently have an internal auditor, but is in the process of hiring one. Also, Lake County does NOT have a hotline for people to report suspected fraud. Neither does the State of FL Education Dept. Kinda makes you start to believe in better accounting controls and procedures, doesn't it? vj Ex-school official charged with fraud Chippewa Valley administrator accused of buying furniture for district at inflated prices By Mitch Hotts Macomb Daily Staff Writer Two years ago, James Edward Tague... Read more →

Miami-Dade School District $100-million Fraud in 2004

Here is another article on a large fraud hitting a school district - in this case Florida's Miami Dade school district. I will keep posting examples here until I see more support for the internal audit and other management control procedures at the Lake County (FL) School District. This article is from 2004, so I will locate follow up information and post it after this article as I find it. vj =================================================================== Commentary from the Reason Foundation School Reform News June 1, 2004 $100 Million Fraud in Miami-Dade Schools By Lisa Snell Corruption and mismanagement have cost taxpayers more than $100 million, according to a forensic audit of the Miami-Dade County (Florida) School Board conducted at the request of a state oversight board. Independent auditors from Lewis B. Freeman & Partners, who produced the report, recommended the appointment of a special prosecutor and statewide grand jury to investigate the Miami-Dade school district's multibillion-dollar Facilities Construction Department, alleging massive disorganization and waste as well as "probable malfeasance, misfeasance, and potential for fraud." District officials dispute the April 28 Forensic Audit Report and argue the auditors provided no evidence to substantiate their claims. The Freeman auditors respond that the district has refused... Read more →

Another School District Caught Improperly Spending Federal E-rate Funds

We posted an earlier news article about a School District improperly spending federal "e-rate" technology funds, and here is another one: Pomona ( Calif.) Schools Misspend Computer Dollars. The Pomona Unified School District has misspent at least $2.4 million from a taxpayer-funded program to connect schools in low-income areas to the Internet. Despite federal guidelines prohibiting spending e-rate funds for personal lap top computers for teachers, the district purchased 460 such computers. The district purchased 48 servers for Marshall Middle School. Curtis Lee, director of technology for the Walnut Valley Unified School District said, "There's no reason for a middle school to have 48 servers. In a typical school, you may need one to five servers." In addition, invoices showed that Pomona Unified paid hundreds of dollars more than the retail price for the computers. (Inland Valley Daily Bulletin, July 22, 2005.) Read more →

Chicago School District spends $18-million with minority owned enterprise that WASN"T one.

This is another example of fraud affecting a school district - this one is in that pillar of honesty, Chicago. These examples are posted here to educate readers and encourage staff and elected officials of the Florida Lake County School District to support and implement fiscal and audit controls to prevent possible fraud. In this example, a landscaping firm used a minority owned front firm to obtain over $18-million in business from a school district when the main firm was NOT minority owned. A way to prevent this is to implement strong due diligence processes to ensure all qualifications of a vendor are confirmed (which was apparently never done - possibly because the firm donated funds to politicians). But, after all, this was in Chicago! Notice that the issue was investigated after the District Inspector General received a "tip". This could have been from a formal fraud reporting hotline, which Lake County School District does not have. (Fraud reporting hotlines as a detection and prevention technique are a future subject). I would hate to be a politician that accepted donations from the Landscaping firm. vj Dated Sept. 28, 2006 and from http://www.chicagotribune.com/business/content/education/chi-0609280281sep28,1,6173068.story?coll=chi-education-hed&ctrack=1&cset=true Contract fraud alleged Minority firm a front, school... Read more →

South Carolina School District Technology Instructor Convicted of Federal Mail & Wire Fraud of $468,000

Here is another example of fraud committed by a non-Florida school district staffer. Each of these actual fraud examples are posted here as a "lessons learned" to educate staff and elected officials in the Lake County, FL School District. This is the type of fraud that could occur in the Florida Lake County School District if there is not a strong management and board oversight and internal audit department. Previous news articles indicate a hesitation by elected officials to allow or support full implementation of a strong internal audit and other controls designed to prevent fraud and improve resource management in the District. In this case, the article is a press release from the US Dept. of Justice because the fraudster committed federal mail and wire fraud from her staff position in a South Carolina School District. Notice that she was able to approve sole source contracts without competitive bidding and got more than $468,000. Again, we see that a favorite method of committing fraud is through the contract or procurement process. Also notice that the article says that "11 individuals and 10 companies have been charged as part of the Antitrust Division's ongoing investigation into fraud and anti-competitive conduct... Read more →

Wake County, NC School District $3.8 million Fraud

Below are three of several articles on the conviction and methods related to a $3.8-million school district fraud in Wake County, NC - home of the famous Wake Forest University. Several people went to jail, and they finally created an internal audit department. Notice that another "unexpected consequence" is that the evidence of poor management by the elected officials may result in an upcoming school bond issue being turned down by the voters. Can you guess how the reputation of elected officials was affected by the fraud? I changed certain statements to red, italic so they were not missed. The third article, from March, 2006, describes some specifics of how the fraud took place, quoting a report from a consultant. It said that many fake invoices under $2500 were submitted because they only required one signature. One thing that internal audit departments do to find these situations is do a computerized accounts payable aging report that would show all payments by vendor with a grand total. This would clearly have shown a huge string of small payments to one vendor - but apparently neither the existing finance staff or one internal auditor knew of that technique and did not do... Read more →

Example of $4-million School District Fraud

One of the main ways to educate elected officials and staff on the importance of fiscal controls and internal audit functions is to distribute examples of frauds and fiscal mistakes made by similar agencies. Many times I hear the statement "That can't happen here - we only hire nice people..." which usually means to me they don't manage well. Below is one example where a school district administrator siphoned out $4-million and the School Superintendant took $2-million. ( I assume LI means Long Island, New York). Notice that they mention there had not been any school audits or oversight in two decades. ======================================== from: http://www.topix.net/content/ap/2366847874225308963920874229663080400726 LI administrator sentenced in $11 million school district scam The Associated Press By FRANK ELTMAN September 19, 2006 While the crimes committed here may not have been 'violent A former school administrator was sentenced Tuesday to up to nine years in prison for stealing more than $4 million from her district treasury for cars, vacation homes and ATM withdrawals in a scandal that eventually uncovered $11.2 million in missing funds. State Comptroller Alan Hevesi has referred to the Roslyn school district case as the 'most extraordinary theft' from a school system 'in American history.' His... Read more →