It’s beginning to look like Christmas year-round for people committing fraud under the banner of serving non-profit organizations.
That’s their goal, at least.
Their objective is to benefit financially – and illegally, immorally, or unethically – from the generosity of individuals and organizations that contribute to a cause believing that it’s legitimate and actually helps people.
Beginning Jan. 7, a five-part series will appear in this space once-weekly on non-profit fraud. We’ll cover types of fraud; misappropriation schemes; fraudulent fundraising practices; fraudulent financial reporting; and the types of questions you ask to ensure you’re not lining the pockets of someone whose only interest in raising money is for personal use.
Non-profits are a fertile field for fraud because they are grounded in good intentions and trust. All you need to shatter those bonds of trust is for a single individual to take advantage of the opportunities for dishonesty that all-too-often present themselves.
Here are some examples:
- A Nov. 25, 2013 announcement from the FBI’s Washington Field Office: Former Employee Pleads Guilty to Embezzling More Than $5.1 Million from Non-Profit; Money Stolen Over Eight-Year Period; Non-Profit Alerted Authorities Upon Discovery of the Scheme
- The Washington Post: Md. woman accused of stealing millions from D.C. nonprofit group
- Another Washington Post article: Inside the hidden world of thefts, scams and phantom purchases at the nation’s nonprofits
- The New York Times: Bronx Councilman Is Convicted of Fraud and Loses Seat
- The New York Daily News: Charity boss Seibert Phillips admits stealing $600G from organization to help mentally disabled, gets 5 years' probation
- The Nashville City Paper: Hendersonville couple accused of stealing $730K from nonprofit
The internet has a brutally large number of stories just like these, from all over the United States.
This blog series’ purpose is to give you the knowledge tools that will help you spot, avoid, or uncover evidence of non-profit fraud. The series will appear each Tuesday for five weeks. Our regular accounting-related blog items will be posted on Thursdays.
These are the topics we’ll discuss generally in the Jan. 7 edition and why they are the fraud danger areas:
- Misstatement of contributions and revenue
- Expense misreporting
- Related party transactions
- Employee embezzlement
- Travel and entertainment
Fraud is a multiple-faceted violation. Money is stolen, certainly. There’s also a violation of faith and confidence that can be hard to overcome, and impossible to forget.
Please look for our blog series on non-profits and fraud beginning Jan. 7.
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