The tragedy of fraud

I have discussed this fraud at a local church here and here.  The very short version of the story is a bookkeeper accepted a plea bargain to one felony charge of theft.  The plea agreement reportedly calls for 9 months in jail and $25,000 restitution. 

Fraud has the potential to wreak havoc on a ministry.  If you haven’t thought about the collateral damage from a fraud incident, ponder with me some of the ways that this has turned into a tragedy.

The bookkeeper – He is going to jail.  No matter how well deserved that may be, it is still a tragedy.  He is now a felon.  His future employment prospects are bleak.  He is reportedly age 48.  He will have a difficult time providing for his family for the two decades until he hits retirement age.  How will he feed his family?  He has tarnished his own name, his family name, all people of faith, and the cause of Christ.  His actions will probably bring ridicule on other people who convert from a different faith to Christianity.  There are multiple tragedies here.

His family – They obviously have been devastated.  Again, I know nothing of the case other than what is on the internet, but his wife almost certainly knew nothing of what was going on and his children were certainly unaware.  Picture if you can the conversation when the husband had to tell his wife what he had done, the tears streaming from her face when he said he got caught and the police will be here soon.  I cannot imagine the devastation the kids felt when daddy told them that he was in trouble.  Now imagine their horror to know that daddy admitted everything in court (they don’t understand stuff like nolo contendere, and that an admission now prevents the very high risk of many long years in jail, and a no contest plea can’t be used against him in a civil trial).   Then imagine the cruel things that could be said on the school playground in the future. 

The shock to his family that I have described here is what I wish all fraudsters could see in their future – maybe it might change their calculations in the fraud triangle.  Here’s what I’d like to say — forget about all the other consequences that are headed your way — how will you tell your little girl that her hero is going to jail?

Now think about the implications for the church.

Members of the congregation – The people sitting in the pew have been hurt deeply.  There is probably a wide range of emotions, all of them harshly negative.  It was their hard-earned money they sacrificially gave to the church that was stolen.  Will they think twice before sacrificially giving again?  Without having talked to anyone at the church, I can guess that their anger (which is perfectly justified) is venting at the bookkeeper, the church leadership, and even the pastor.

Church leadership and the Pastor – They are most likely bearing the brunt of the anger and have to take all the public attention.  They have to keep the ministry moving even as they themselves are feeling betrayed.  They have poured tremendous effort into dealing with the fraud situation that could have otherwise been focused on helping people, starting new programs, and generally improving the world for Christ.  Instead, they have been terribly sidetracked.  I am sad for the ministry impact that could have been.

I do not wish to imply through my comments on internal controls the slightest suggestion that any of this is the fault of the leadership.  Please understand this:  the responsibility for the fraud rests squarely on the shoulder of the fraudster.  I do not know what method was used for the fraud.  That it totaled the alleged amount over several years suggests to me that it was a subtle, clever scheme.  Whether internal controls could have prevented it, I do not know.  Let me be very clear: regardless of whether the internal controls were loosey-goosey or rock solid, the leadership and pastor are victims of the fraud.

The ministry of this particular church – Even though the size of the involved church is in the megachurch range, losing an alleged $750,000 over several years is a big drain.  Imagine the extra pressure on budgeting and staffing created by that missing money.  Picture the number of staff that either were let go or could not be hired because of missing around $250k or so per year in the budget.  Then imagine the lost impact on the community and the mission of the church from that lost staffing. 

All of this makes me very sad.  It breaks my heart to see the impact on the individual, the family, the church leadership, the church members, and the kingdom of God.  At the moment, I see nothing good from this situation.  I see tragedy all around.

Please pray.  For everyone affected.  Then double-check the internal controls at your church.  Please.

One Response to The tragedy of fraud

  1. […] discussed the tragedy of fraud.  The ripple effects of the massive Madoff fraud have been spreading.  The ripples include a lost […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: