Wise Giving Wednesday: $1.4 Million Embezzler Sentenced
On June 25, 2021, the U.S. Attorney’s Office in the District of Massachusetts announced that a woman was sentenced to six years in prison and to pay restitution for two fraud and embezzlement schemes that resulted in a $1.4 million theft form two nonprofit organizations. Prosecutors did not identify the names of the organizations but media sources reported that one was addressing nutrition in developing countries and the other focused on affordable housing.
The U.S. Attorney’s Office indicated that the first organization had funds stolen over a 4 and a half-year period beginning in August 2013 through the use of unauthorized checks to herself, unauthorized use of the organization’s credit card and accessing the group’s online bank accounts. The funds stolen cumulatively totaled over $1.3 million.
Sadly, while on a pre-trial release for this case, the U.S. Attorney’s Office further indicated that she was hired by another nonprofit. She used her married last name and did not disclose the previous charges to this other organization. She stole funds by diverting checks to herself and opening a Paypal account in the organization’s name. This embezzlement stole $57,000 from this second organization’s accounts.
While such fraud is not commonplace in charitable organizations this story puts a spotlight on the importance of strengthening internal accounting controls over access to organization bank accounts and credit cards. In addition, background checks on newly hired employees can help in identifying questionable circumstances in a candidate’s resume.
In the end, the buck stops with the charity’s governing board. BBB Charity Standard 1 specifically calls for a board of directors that provides adequate oversight of the charity’s operations and its staff. This includes establishing accounting procedures sufficient to safeguard charity finances. For additional detailes about the BBB Standards for Charitable Accountabilty, see this link.
Video of the Week
As part of the Building Trust Video series, BBB Wise Giving Alliance provides a video interview that features Jamie Amelio, founder and CEO, Caring for Cambodia (a BBB Accredited Charity) that seeks to educate a generation of Cambodian children today, to make a difference for Cambodia's tomorrow. CFC reports that it provides education to 6,600 students at 12 preschools, 5 primary schools, 2 junior high schools and 2 senior high schools in Siem Reap, Cambodia. Classrooms are safe, modern and technologically equipped. The organization mentors and professionally trains teaching staff and funds supplies and other tools needed to teach.
Heart of Giving PodcastThis week’s Heart of Giving Podcast features interview with three different individuals who took the initiative to impact the lives of a few people around them. The guests, Gerard Taylor, Ky Howard, and Pamela Diaz, realize that while it might not always be possible to impact others' lives at a massive scale without the support of a big organization, sometimes all it takes is a small act of generosity to make small but significant changes around them.
We are always working with charities to publish or update reports for donors. Visit Give.org or local BBBs to check out any charity before giving. Our recently evaluated charities include:
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