Relief Association Investigation Presentation

May 6, 2010

What is a Relief (Benevolent) Association?

Does Good Things

Type of Non Profit Association

Emergency Response Workers (Police & Fire)

Type of Benefits

Retirement BenefitsHealthcare Benefits (Extends to Family)Specific Acts of Kindness Gas to Get Home Funeral Expenses Kid’s TuitionCredit Union

Sources of Funding

• Jurisdictional Contributions (City, County)• Payroll Withholdings• Sale of Merchandise (Organizational

Store)• Donations• Tickets sold for community events (public

relations functions)

Accounts of This Relief Association

• Pension Fund managed by a Third Party Administrator watched over by a Pension Fund Consultant

• Health Care Fund managed by a Third Party Administrator watched over by a Health Care Fund Consultant

• Store Account • General Operating Account• Credit Union Account for special benevolence• Bible Fund Credit Union Account

Membership

All on duty personnel

All personnel on leave from duty

All personnel retired

Governance

Small Core Staff that is augmented by outside capabilities

Board of Directors (Trustees)

Two key officers elected by the membership

President

Vice President

Staff has little contact with Board but daily contact with President & Vice President

Composition of Board of Directors

President

Vice President

One trustee from each duty station

Two individuals from headquarters

Three representatives of pensioneers

Compensation

Board of Trustees are relieved of the need to pay dues (withholding) while on the board and are given time to perform board duties

President and Vice President are reimbursed for all expenses incurred transaction organizational business as approved by the Board

Compensation Contintued

President and Vice President are given the use of an automobile to transact organizational business

Only the President is a paid in service position and is relieved from any duties associated with the responding to emergencies. Vice President is not relieved from ongoing duties

Suspect

Elected Vice President in 2005

Elected President in 2007

Very popular person in an atmosphere of brotherhood/sisterhood and trust

Duties of President

Public Relations

Ceremonial

Touchy/Feely

Getting The Job

Proposal (CD File #1)

Ferreting out wrong doing on the part of

one individual

“Hot potato” nature of inquiry

Proposal

Work Plan Step II is Collecting the Information. (Starting at this point tonight) Work with General Counsel Identify Other Individuals (Other

Thieves) Interview of Board Members

Remainder of Proposal

Background Investigation

Analyzing and Drawing Conclusions

Reporting

Letter of Engagement (#2)

From Outside General Counsel

Background InvestigationAn analysis of cash and inventory diverted

to the inappropriate use of the individual from 2004 to 2007. Dollar Amount

Suspicious Activity (information that suggests intent to deceive, relations to other individuals—collusion

Intent to Deceive

In order to prove fraud, you have to prove “intent.”

Otherwise, it rests at the level of incompetence or negligence

Bob Henderson Report #3

Reimbursement of President’s and Vice President’s Expenses

Process of approval

Board Meetings/Committee Meetings (3-5 signatures)

Client Investigations

Bob Henderson Report

Invoice Referred to

Looked at some of the data themselves and even talked to him themselves. Some of his responses in the exhibits

Document Examination

Policies, Procedures, and Definitions (#8)

Document Archeology #4 All are relevant: Much of the documents reviewed

have been left out

Like a normal document production mixed up duplicates very hard to read

George Walsh Payment

Check Request signed by suspect and accounting clerk

Where it is going: vendor in Arizona

Purpose or Reason: LDMA Plot Transfer

Return to John

Amount

What is LDMA?

Lost Dutchman Mining Association

Louisiana Direct Marketing Association

“Hope for Us All”

Other #3: Page 5

Requestors Initials

Cash Request

$18,000.

Per Past Practice

Give to John

Home Depot Account

Addition 3: page 11

Invoice on Upper Left

$96.54

For What?

Bible Fund Account

Journal Entries (CD 4: page 4)

$300 Debit

Page 6: Check to LDMA for $300

Jiffy Lube and Cook Tire

CD #4; Page 72 Jiffy LubeDate is: 1/25/05Vehicle Type: ToyotaMileage on Vehicle 50,487

CD #4: Page 73 Cook TireDate is 3/2/05Vehicle Type ToyotaMileage:132K

Southwest Airlines

CD #4: Page 92

Southwest Airlines Receipt and Itinerary

Passenger?

Lots of Phone Records

Added Exhibits File 2: Page 5Things of Note: Unpaid Balance Number of Phones Minutes Used on Phones Notations by phone Call Pattern (# per day/ what days?) Numbers Called

Questions to Answer

How much did the suspect misappropriate to himself?

Was it intentional? Reasons for Conclusions?

Did he have any accomplices or suspect

relationships with others?

What other evaluations would you perform had you the data?