Did clerk pay herself $2 million and no one noticed?

[Herman Munster]

http://www.miami.com/mld/miamiherald/16332102.htm

Alone in the office at night, she wrote check after check to herself from the Broward County labor agency, court records show. Her superiors and colleagues were unaware that Brenda Felder, 41, was already a felon -- convicted of grand theft, one of the charges the former accounts payable clerk now faces as she is accused of stealing more than $2 million. Workforce One's $24 million annual budget comes mainly from local and state government funding. But it wasn't the labor agency's accountants, financial department, outside auditors or even Felder's supervisors who uncovered the scheme, which went on for four years. It was an alert teller at a Davie credit union who finally noticed.

Judge Marc Gold wondered last month, when a subdued but visibly nervous Felder appeared before him in Circuit Court during a bond hearing: ``What business loses $2.4 million and doesn't catch it?'' Details are slowly emerging from Felder's personnel records, court depositions and other records as the government builds its case. The investigation continues. It may have started almost 12 years ago, when Felder checked ''no'' in the box on her job application asking whether she had ever been convicted of a serious offense. In fact, three times a decade before, Felder, then known by her maiden name of Roundtree, pleaded guilty to felonies related to theft, according to Broward County court records from 1985 to 1987. Adjudication was withheld once. Twice, she was convicted.

In the last of those three cases, she pleaded guilty to a first-degree felony charge of grand theft of $100,000 or more. She was sentenced to two years of probation. But when Felder applied for the job in 1994, the labor agency wasn't doing background checks on employees, so her convictions went undetected. Within a year of her hiring, Felder became the accounts payable clerk, responsible for paying vendors and maintaining the books on such payments. Each year, she received stellar employment evaluations. Once, she was given a merit pay increase of 6 percent. Eventually, she asked permission to work at night, saying she needed the flexibility because of her sick mother, according to court records.

In 2002, prosecutors allege, Felder wrote the first check to herself. It continued for four years, they allege, with Felder routinely making out checks to herself from the labor agency, sometimes as often as three or four times a month. Usually the checks were for about $17,000, but they ranged from $12,000 to nearly $20,000. She deposited the checks into the same credit-union account where she received her paychecks, according to the court records. Prosecutors believe that Felder, who has since been charged with three counts of grand theft, money laundering and fraud, wrote at least 119 checks to herself from the labor agency.

[Bunny]

1. How in the HELL does this go unnoticed for four years?????

How did the auditors miss this? It's incredible, in the truest sense of the word.

[Critters2]

8. OT--I love your sig file. nt

[SoCalDem]

2. Which is exactly why this type of check should require TWO signatures

I run two large bowling leagues, and ALL our transactions require TWO signatures (except for deposits).. (each one usually tops out near 100K by the end of the league)

[DaveJ]

4. It because of the class gap

At my bank large personal transactions are treated like any other if they are seen at typical of that account. So when I once deposited an extra large check, I had to wait 3 or 4 weeks for it to clear. If I were a rich guy making deposits like that regularly they would have cleared it the next day.

[tammywammy]

5. I work at a car dealership

All checks (from us) require 2 signatures. Including the $180 for catering this Saturday, 2 signatures.

[Kingshakabobo]

22. I used to work at a car dealership.........

.........Only the owner of this dealer-group was authorized to sign checks.. from 10 cents to ten thousand dollars - he didn't care. It caused a LOT of problems when customers demanded refunds. He owned 8 stores too. I guess he knew the type of criminals he had working for him (not me of course).

[tammywammy]

31. I've heard stories about various dealership, esp in the 80s

Looks of criminals working back then. :)

Here it's the owner, GM (owner's son) and the controller that can sign checks. In a pinch, like when the GM and owner are both out of town, the AP person can sign checks too. But always 2 signatures on each check. There's too much money going through a dealership to let one get by with just one signature.

But it would really suck if only the owner could sign checks! He got stuck in Denver last week, was supposed to be back on Tuesday and didn't get home until Monday afternoon!

[don954]

3. she got 2 mill and didn't haul a$$ into the Caribbean?

boy we got stupid criminals down here....

[sarge43]

6. Or run for a congressional seat on the Repug ticket n/t

[ktowntennesseedem]

10. LOL!!! Good one! -nt

[sarge43]

12. Thank you

She should have put her talents to their proper use.

[Redstone]

7. My question exactly.

Redstone

[TheDebbieDee]

9. I was thinking the same thing...................

Why in the hell would anybody steal that much money and stay on the job?

Hell, I would have hauled ass after only stealing the first couple-hundred thousand dollars. This lady was GREEDY and stoopid!

[brer cat]

11. Was she also reconciling the bank account?

I've worked in accounting for decades and this is beyond belief. I would have caught the first month doing bank reconcil. Not to mention auditors. Where were the grown ups?

[MissB]

18. Exactly. At the very least, someone should have been

reviewing the monthly reports. I cannot believe that no one caught this (except for the bank teller, who really doesn't count).

[Lipton64]

13. Looks like she was either paying off certain elements of the company....

or else they have one incredibly stupid and incompetent management team....

[TahitiNut]

30. It's hard to imagine that degree of abysmal incompetence w/o some corruption.

That agency clearly lacked even the most primitive management controls. There's no way it survived even a basic control review audit. The auditor probably alerted the Board that it was 'unauditiable' and the Board ignored it.

Heads should roll and civil litigation should be initiated against the CEO and members of the Board.

[lies and propaganda]

14. I couldnt even get to Broward County before I was laughing

Florida is ran like such a joke.

[TahitiNut]

15. That indicates the absence of the most fundamental GAAP/GAAS controls.

Accounts Payable is a function that's necessarily separate from Receiving and Purchasing. Absolutely no payment of any kind should be made from Accounts Payable without the corresponding verification that the expenditure matches either a received service or good or an approved recipient of funding for entitlements spending. In the latter case, a case officer or advocate must exist to provide the control balance.

This isn't advanced or complicated. It's the most fundamental of management controls: separation of duties.

Management controls can never reliably protect against collusion, but basic controls should ALWAYS protect against embezzlement by a single individual.

Someone besides Ms. Felder should have their ass in a sling, for sure. Whomever failed to ensure the basic management controls were in place and operational should be prosecuted for complicity, imho. It's just that bad. On top of that, even, the person charged with performing audits of that organization should lose both his job and his license if this critical manaagement cotrol hole wasn't reported. Yes, it's just that bad. Even I, who only functioned as an internal auditor for less than 6 years would never miss that hole. It's so basic that it's unforgivable.

[Nickster]

16. Someone had to audit their books and give a clean bill of health to their books.

Obviously someone just collected a check for auditing and didn't bother to do the most basic audit work.

[TahitiNut]

17. If they didn't report it, they should lose their license and bear a financial liability.

It's misfeasance beyond imagining, IF they didn't report it. It's entirely possible, however, that they DID report it and the report was ignored. In that case, heads should roll. BIG TIME. Really ... this one's at the kindergarten level of management control and organization. (Enron, otoh, was at least high school.)

[Nickster]

23. I'd be curious to see their audit reports. It's entirely possible that the auditor issued

a "no-opinion" report, but then the auditor wouldn't likely stay around for several years issuing no-opinions. That means there would be letters to management from the auditor stating why he couldn't issue a clean opinion along with his/her recommendations on corrections. I can't imagine an ethical auditor issuing letters to the management, being ignored, and continuing on with the engagement. I'm just going to guess that the auditor gave the clean bill of health.

[TahitiNut]

24. The WORST rating an auditor can give is "unauditable" or "no opinion."

Such ratings mean that the state of the records ("audit trails") and internal controls are such that there's no reasonable assurance that an audit can even be performed reliably. Such ratings signal the high potential for a cash hemorrhage. (The actuality often can't be determined.)

In my years as an audit principal and manager at two Fortune 50 corporations, we only issued one "unauditable" rating out of many dozens of audits in which I participated. It was a depth charge - since executive management, no matter how dense and corrupt otherwise, knew damned well that was serious stuff. Both companies were traded on the NYSE and the NYSE has some rules about internal controls and internal audit functions that they actually give a damn about.

When such ratings become banal, it's catastrophic.


It's worth noting that background checks and a diligent recruitment and hiring process is another fundamental management control. Since no management control can protect against collusion, some degree of reliance on employee intergrity is essential - and vacations should be REQUIRED.

Since it's clear that they even failed in this regard, I put the blame in the lap of executive management ... whomever bears the executive authority over this agency. It's unforgivable.

[Tansy_Gold]

27. Executive authority? State agency? Florida?

Um, would that be Jeb Bush?

Just askin'.

:evilgrin:


TG

[TahitiNut]

28. "Workforce One Chief Executive Officer Mason Jackson" (declined to comment)

He's the guy whose ass SHOULD be grass. It's the administrative agency of the Broward Workforce Development Board.

The members of the Broward Workforce Development Board are ...
Terri Castellano, Chair
Ralph Parilla, Vice Chair & Chair, Organizational Resources
Sharlyn Lauby, Secretary/Treasurer
Michael Carn, Past Chair; Chair High Skill/High Wage
Gary Arenson, Chair, Employer Services Committee
Bill Armstrong, Member
Josie Bacallao, Member
Dr. Larry A. Calderon, Member
Kristen Cavallini-Soothill, Member
Ben Chen, Vice Chair, Legislative Affairs
Joseph Cobo, Member
Kevin Cregan, Chair, Business Results Committee
Doug Everett, Member
Manny Fernandez, Member
Abraham Fischler, Chair, Youth Council & Vice Chair Legislative Committee
Nadine Floyd, Member
Donald T. Glenn, Jr., Member
Henry Graham, Member
Arline Hampton, Member
John Harris, Member
Frank Horkey, Member
Mark Jones, Member
Francois Leconte, Member
Robert Legg, Sr., Member
John Miracola, Member
Jack Moss, Member
Fredrick Murry, Chair, Better Jobs/Better Wages Committee
Mayor Frank Ortis, Co-Vice Chair, Legislative Affairs
Shirley Paremore, Member
Linda S. Quick, Member
Roy Rogers, Member
Mel Rothberg, Member
Pamela Sands, Member
Maria Sanjuan, Member
Lynn Shatas, Member
Cynthia Sheppard, Member
Chris Smith, Member
Ivonne Socorro, Member
John Somers, Member
Joy Stephens, Member
James "JT" Tarlton, Member
Norman Taylor, Member
Marjorie Walters, Chair, Participant Advisory Committee
Mary Watford, Member
Doug Weber, Member
Carol Webster, Member
Robert White, Member

http://www.wf1broward.com/Board_Membership_English.htm


Every one of these people is supposedly a responsible community leader or business person and yet not a fucking one of them has exercised the necessary oversight of the agency's management controls. That's fucking abominable. I wouldn't give 2 cents for Mason Jackson's future career prospects ... but these people CERTAINLY bear some repsonsibility as well.

I'd be willing to bet many if not most of these people are up to their ears in graft and payola.

[TahitiNut]

29. Bad news. It looks like Mason Jackson is a Democrat.

$200 to Maria Cantwell in 2005

http://www.opensecrets.org/indivs/search.asp?NumOfThou=0&txtName=Jackson%2C+Mason&txtState=FL&txtZip=&txtEmploy=&txtCand=&txt2006=Y&txt2004=Y&txt2002=Y&Order=N

(Oh well. A Florida Democrat is like a northeastern Republican.) :shrug:

[Tansy_Gold]

20. What you said!

I've had the great good fortune to work for not one, not two, but THREE employers who had other employees stealing from them. And in each case, I told my superiors (?) ahead of time not only that it WOULD HAPPEN, but I told them how it would happen and who would do it. When there's a breakdown in the normal checks and balances, you've got a fertile field for corruption to grow.

This is why I am always utterly astonished at the reports of wide-spread fraud and corruption in government spending. As nitpicky as the IRS is when it comes to collecting our money, where in hell are all the accountants and auditors when the spending is going on? What IMBECILE came up with the idea of giving government employees credit cards and then not going over the statements every month?

Corruption (party of the first part) + stupidity (party of the second part) = (now, where's the emoticon for sand down a rat-hole?)


Tansy Gold

[TahitiNut]

25. I've met several people in my career who had an innate sense for organizational controls.

One, a good friend now, was what I thought of as a "human dowsing rod" from an audit and control perspective. She had this uncanny sense of where the messes were ... and where people were engaged in shenanigans. It wouldn't take her more than a couple of weeks in an organization to get her "gut feeling" ... and it was like magic. Without any college, she was reticent about saying much unless I teased and taunted her. It was only when she got her "high dudgeon" on that she'd spill the goods. She has a talent - and a deep-seated integrity. I think it's her core integrity that's a large part of her talent - and her "people skills."

[Catchawave]

19. Aren't banks/CU's supposed to report large

deposits to the IRS ? Also, in this day and age of drug trafficking and terrorist funding....scary.

[tammywammy]

21. Does that apply to checks?

I'm pretty sure it only applies to cash above $10K.

As far as I know, there's no extra paperwork required for a check. We take in checks for over $20K with no extra paperwork, but any cash amount above $10K there's an extra form that has to be filled out.

[Catchawave]

26. I inherited 43k when my mom died

Had to show Bank of America some forms with the estate check. I wish I could remember exactly, but it could have been her death certificate which would have matched the info on the check from her estate? I was especially concerned about inheritance taxes, and I know one form showed they were paid.

Guess that's why I found this story so bizzarro, no checks and balances?