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In 2003, I was fortunate enough to be one of a handful of project managers charged with investigating, documenting, and quantifying the largest fraud in the history of the planet, WorldCom. Eventually the fraud reached 10 or 12 Billion dollars, and the CEO was put away for 20+ years.
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A state audit released today claims the pastor of a Central City church known for its drug addiction programs misspent or wasted at least $160,000 in relief grants after Hurricane Katrina.
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Until a few weeks ago, Greg Mortenson was known—and widely admired—as the best-selling author of Three Cups of Tea and the founder of a charity, the Central Asia Institute, that seeks to construct schools in conflict-torn areas of Afghanistan and Pakistan.
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Hassan Nemazee pleaded guilty to leading a nearly $300-million fraud. He donated $1.1-million to charities that have now been asked to return the money.
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What should you do when a trusted employee takes the equivalent of 15 percent of your organization’s annual budget?
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Additional Resources and Links
Gerard M. Zack, Fraud and Abuse in Nonprofit Organizations: A Guide to Prevention and Detection (New York: John Wiley & Sons, 2003)
Andrew S. Lang and Tammy S. Ricciardelle, Preventing Fraud: How to Safeguard Your Organization (BoardSource E-Book series, 2001)
Edward J. McMillan, Policies and Procedures to Prevent Fraud and Embezzlement (New Jersey: John Wiley & Sons, 2006)
Peggy M. Jackson, Nonprofit Risk Management & Contingency Planning (New Jersey: John Wiley & Sons, 2006)
Association of Certified Fraud Examiners -- www.acfe.com
International Fraud Awareness Week -- www.fraudweek.com