A 56-year-old women, of Meridian, Idaho, was sentenced to 41 months in prison for wire fraud and money laundering. She was also ordered to pay restitution in the amount of $1,792,207.59 and must also serve three years of supervised release.
The Meridian woman was employed as the Secretary-Treasurer of the Black Canyon Irrigation District (BCID) from approximately January 2014 through July 2022. As the BCID Secretary-Treasurer, she had access to, and signature authority over, BCID’s bank accounts, including the BCID’s savings account and a Local Government Investment Pool (LGIP) account administered by the Idaho State Treasurer. In her role she also handled fee collecting, bill payments, management of the investment accounts and maintained the BCID’s QuickBooks database and ledgers.
Beginning in May 2019 and continuing to July 2022, the former Secretary-Treasurer knowingly devised a scheme to defraud the BCID of more than $1.7M through the use of an elaborate series of transfers between the BCID’s various financial accounts and also by opening a second LGIP account with the Idaho State Treasurer without the knowledge or authorization of the BCID or its Board of Directors.
To conceal the embezzlement, the 56-year-old made false entries in the BCID internal accounting records and created fictitious invoices to make it appear that the funds she had stolen were used to pay the BCID expenses when, in fact, she used the funds for her personal use and benefit.
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Prevent This From Happening TO YOU!
There are best practices that companies can employ which can help reduce the risk of internal fraud, particularly in the accounting department. A few are listed below:
- Implement strong internal controls: establish clear policies and procedures for financial transactions and ensure they are followed consistently. This includes segregation of duties, where different individuals are responsible for different aspects of financial activities, to prevent any single person from having to much control or opportunity for fraud.
- Regularly review financial records: Conduct periodic internal audits and review of financial records to identify any irregularities or discrepancies. This can help prevent fraudulent activities early on and prevent further losses.
- Conduct periodic external audits: Engage external auditors to conduct independent reviews of the organization’s financial records and internal controls. This can provide an objective assessment of the effectiveness of internal controls and identify areas for improvement.
- Monitor and analyze financial data: Utilize data analytics tools to monitor financial transactions and identify any unusual patterns or anomalies that may indicate fraudulent activities.
Source: journalofaccountancy.com, smallbusiness.chron.com
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