God's money is now my money

Houses of worship are havens from fraud, right? Wrong. The author describes how church workers’ erroneous thinking leaves them particularly vulnerable to fraud and what congregations can do to deter and prevent fraudsters’ attacks.

The telephone rings, and a pastor tells me that his church’s building fund of $180,000 has no balance. I ask him if the church offerings weren’t meeting the budget, and he says that he believes that they were. It seems that the previous long-time volunteer treasurer had stepped down, and then a new member of the church decided to fill the spot. The relieved pastor was grateful. However, after several months, the building fund began to dwindle. The new treasurer said that she had to transfer monies from the building fund to the operating fund.

My investigation revealed a simple scheme. The new treasurer was drawing checks from the building fund made payable to an out-of-state limited liability company. The payee on the checks was a shell construction company, and the treasurer was reverting funds via online banking back to another local bank account. Apparently, the new treasurer had a gambling problem. The church didn’t conduct a background check with the treasurer’s prior church, at which he’d committed the same scheme. The prior church had decided not to prosecute because of its embarrassment.