Raising frauds, not funds

This column is the first in a three-part series presenting many scenarios of fraud and abuse in student fundraising activities. We begin our discussion by illustrating the different schemes fraud perpetrators use to obtain funds for personal benefit from public-sector clubs and private-sector teams.

SKIMMING IS THE FRAUD OF CHOICE 

Similar to our discussion in the January/February 2013 column, fraud and abuse in all types of student fundraising activities is usually a case of simple asset misappropriation. In the ACFE’s Fraud Tree, cash schemes (part of asset misappropriations), which involve stealing an entity’s funds, fall into three categories: larceny, fraudulent disbursements and skimming. Cash larceny schemes involve the theft of funds recorded in the entity’s accounting records. In fraudulent disbursement schemes, an individual makes a distribution of entity funds for a dishonest purpose. Skimming, the theft of off-book funds, is usually at the heart of student fundraising losses.

PUBLIC-SECTOR CLUBS

CASE NO. 1: STICKY SOFT DRINK AND CANDY MONEY