Fraud Lessons at a Children’s Hospital

• In Event: Fraud and Governance Failures

Abstract

An embezzlement fraud detailed in County Case 2014-CF-001041 involves an Executive Director of a nonprofit children’s hospital; the announcement stunned the community, as the perpetrator was a well-regarded and trusted employee. Information and documents culled from the Court records and news articles aid in teaching relevant topics suited to nonprofit or fraud accounting courses. The misappropriation of cash of $728,482 over a six-year period resulted in eleven Class 1 and Class 3 felony counts, to which the defendant eventually pleaded guilty. Case details are linked to the fraud triangle model and relevant expenditure cycle controls that might have circumvented the crime; aggravating and mitigating aspects relevant to sentencing guidelines are also presented. Discussion of the circumstances and outcomes of stealing resources intended for seriously sick children may prevent future accounting students from making the front page news in such a detrimental fashion.

Authors

• Carol M Jessup, University of Illinois Springfield

• Carol M Jessup, University of Illinois Springfield