Greed and the Perfect Audit
As the chief financial officer in the K-12 school district with close to thirty-five thousand students, his salary was one of the highest in the district. He’d been with the district twenty-five years.
For twenty-four years, the school district’s independent auditors gave the school district high marks for their excellent financial practices. As would be expected, the superintendent proudly spoke to the school board about this incredible achievement.
Least Scrutinized Funds
After the joint state and federal investigation, it was determined the chief financial officer had been stealing from the district for at least sixteen of the twenty-four perfect audit years. The auditors did nothing wrong. When conducting audits, typically, auditors don’t follow every penny in and out. Clearly, the former CFO understood where there would be less scrutiny.
One month after the superintendent announced the positive audit results for the 24th successive year—the district fired the CFO due to the FBI investigation. Two months after the CFO’s firing, the superintendent resigned.
Sentence and Payback
Because he had embezzled money from federal and state sources and brokered kickbacks for awarding insurance contracts to specific companies, he faced charges in both jurisdictions.
The former financial officer pleaded guilty to numerous charges of embezzling public funds, forgery, breach of trust, charges of public corruption.
In federal court, the judge sentenced him to 5 years. The state judge sentenced him to eleven years, concurrent with the federal sentence.
The state judge also ordered the defendant to pay more than $1.3 million in restitution to the school district. To guarantee the restitution is paid, the judge signed a Notice of Lien against his state retirement benefits—the school district will be paid what they are due before he can receive any benefits.
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Source: U.S. Department of Justice, South Carolina Attorney General, The Charleston Post and Courier, The Berkeley Observer