A former finance executive with the Pierce County Housing Authority (PCHA) was sentenced to 4 years and 2 months in prison for embezzling nearly $7 Million of public funds, according to Acting U.S. Attorney Tessa M. Gorman.
According to court documents, in Januaury 2021 the former executive pleaded guilty to embezzling charges, admitting that between March 2016 and July 2019 she made multiple unauthorized payments of public money to her personal accounts. She initiated wire transfers for as much as $500,000 from Pierce County Housing Authority bank accounts to her own bank accounts, stealing a total of $6.9M. One of the transfers was in connection with the purchase of land in Oklahoma. She also created and submitted fake invoices that appeared to be from an outside vendor to PCHA. PCHA paid the invoices and the money was later transferred to her personal account. The PCHA provides affordable housing for thousands of low-income residents in Pierce County.
The former director also used the money for improvements to her home, improvements to the property she purchased in Oklahoma and to charter a private jet. She purchased two vehicles and diverted large amounts of money for gambling and internet gaming. The Washington State Auditor’s office uncovered the financial irregularities in 2019.
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Prevent This From Happening To YOU!
The best defenses against employee fraud include solid internal procedures/controls and training your team members to recognize the signs of suspicious activity that may be occurring within your organization. Below are a few techniques to help with the prevention of employee fraud:
- Internal Controls. Strong internal controls reduce the opportunity to commit fraud and serve as a deterrent.
- Review and approval – segregate duties with respect to financial transactions
- Access Controls – limit employee access to systems and information to necessary users
- Mandatory vacation
- Positive Pay
- Employee Training. Periodic training on code of conduct, employee responsibilities, and the company whistleblower process deters fraud and educates employees on how to report suspicious activity.
- Internal Audit. Performing regular assessments of key processes, risk management, and high-risk areas allows the organization to continuously improve and enhance controls to minimize risk on an ongoing basis.
- Policies and Procedures. Clearly defined policies and procedures are critical to preventing and deterring fraud.
- Employee Evaluations. Performing regular assessments of employee performance, job satisfaction and overall well-being provides useful insight to identifying potential fraud perpetrators.
Click here for more information on these Fraud Prevention Techniques.
For more information from the Association of Certified Fraud Examiners (ACFE) click here.
Make Sure Your Clients Take a Proactive Approach To Protecting Their Business Should a Loss Occur
Make sure your clients have crime insurance. Take the steps to ensure that your clients are covered by calling one of the Berkley Crime team members listed below.
Sincerely,
Michael Beranek
Berkley Crime
Experts focused on your protection. We deliver.
| National Practice Leader Michael Beranek (646) 522-7362 [email protected] | East Regional Manager/Commercial Crime Product Leader Matt McNamara (212) 497-3707 [email protected] |
| Financial Institution Product Leader Patricia Logan (212) 497-3708 [email protected] | West Regional Manager George Pierce (917) 747-1141 [email protected] |