First sentencing in college admissions scandal

July 9, 2019, 7:00 am

Image courtesy of Adobe Stock.

A sentence has been handed down in the first of the college admission scandal cases to reach a judge. The former sailing coach at Stanford received:

  • $10,000 fine
  • 1 day in jail, already served
  • 6 months house detention
  • 2 years supervised release, i.e. probation

Prosecutors recommended 13 months in prison.

Several articles pointed out this person is the lease culpable of those lined up for sentencing. He did not receive any money directly.

If I read the articles correctly, the only student admitted as part of this scheme was not actually an athlete and has since been expelled.  No other students were admitted.

One key point of detention is an assessment of what type of crime is present.

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Intro and update to college admissions scandal

July 2, 2019, 9:17 am

Lots of things going on behind closed doors that have drawn the focused attention of the U.S. Attorney in Boston. Image courtesy of Adobe Stock.

The pretend-to-be-an-athlete-in-a-sport-you-have-never-even-played scandal in higher education is one of many issues I have not focused on over the last year or more.

Family issues have pulled me away from blogging. Hope to start getting caught up on the massive changes taking place around us. I’ll begin with the college admissions disaster.

Brief background:

A large number of parents were paying Mr. William “Rick” Singer to help their children get into colleges where their kids wouldn’t otherwise gain admission.

More background:

The schemes, according to a long string of articles covered in most newspapers which I won’t link, included techniques such as:

  • Creating fake profile of the student being a competitive athlete when the student had not even played the sport.
  • Paying to have another person take your SAT or ACT tests.
  • Hiring a proctor to oversee extra-testing time and then correcting answers.

Flow of cash was complicated, as expected. Most of the dollars went to a non-profit foundation set up by Mr. Singer. He then distributed portions of the money to college sports coaches, proctors, and other participants. Some of the payments went directly from the parents to the colleges.

Oh, by making those payments to a charity, the payments became tax deductible. So there is also a tax fraud angle for all the involved parents to ponder. You can easily guess someone from IRS Criminal Investigations is involved in each of the cases.

Current status:

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The story on Silk Road, an on-line drug bazaar, shows the power of rationalization and self-deception

September 26, 2017, 4:24 pm

Cover of “American Kingpin” from Amazon. Used under fair use.

The sad tale of Ross Ulbricht and his on-line drug bazaar called Silk Road is a good study of the outer limits of how far rationalization can carry a person.

It is also a frightening illustration of Jeremiah 17:9. From the New International Version, ponder:

The heart is deceitful above all thing and beyond cure. Who can understand it?

Considering the tale of Silk Road is useful for accountants wanting to learn about the outer fringe of the internet and he investigative power of the federal government, believers who would like an illustration of the frightening level of deceit that lives in the human heart, and anyone else wanting to learn more about the dark worlds that normal people will never see.

My posts are gathered into two collections on my other blog, Outrun Change:

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Another scam to beware: phishing for W-2 info

February 7, 2017, 7:26 am
Image courtesy of Adobe Stock.

Image courtesy of Adobe Stock.

Ok, so you know it is a scam if you get a call from “the IRS” saying you have to pay your tax bill right this instant because the local cops are on the way to arrest you.

If you get one of those calls, hang up. Don’t even talk.

Here’s the newest phishing scam now starting to hit charities.

Kelly Phillips Erb explains the new scheme: IRS Issues Urgent Alert as W-2 Phishing Scam Spreads During Tax Season.

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After reading about the mess World Vision is in, ask yourself what you are doing to prevent a similar disaster from disrupting your programs.

August 10, 2016, 7:00 am
Question this manager is pondering: Do we have good enough controls to prevent this from happening in our field programs? Image courtesy of Adobe Stock.

Question this manager is pondering: Are our controls good enough to prevent something like this from happening in our field programs?
Image courtesy of Adobe Stock.

A few articles to follow up on the accusations a World Vision manager allegedly routed aid money to a terrorist organization.

  • Looks like the situation with the Gaza branch of World Vision could turn into an accounting argument.
  • Response from World Vision.
  • Other aid workers charged.
  • Finally, more questions for managers and finance teams to ponder.

A number of public comments on twitter are claiming the total budget for the Gaza branch is only $2.2M a year.

Some people making this comment usually continue the discussion by calling into question the entire set of accusations from the Israeli government because the current claim is the manager diverted approximately $7 million a year.

This position implies that accusations of diverting $7M a year when the budget is only $2.2M means the accusations are untrue.

8/8 – AP, The Big Story – World Vision: Israeli charges based on “huge gap” in numbers – Article points out the intelligence agency accuses the program manager of diverting food, agricultural equipment, and medical supplies in addition to currency. That means there was in-kind material as well as heavy equipment.

The accounting argument appears towards the end of the article. A Foreign Ministry representative is guessing that the stated budget does not include in-in-kind donations.

A World Vision representative in Germany says the budget of $22.2M for the Gaza office over the last decade does include in-kind materials.

So, we may wind up with this being an accounting issue in addition to a loaded political issue on top of an alleged defalcation issue carrying over into alleged terrorism funding issue.

8/9 – Al Jazeera – Christian charity ‘top of Israel’s target list’ – It will help you filter news you hear about the manager of the Gaza office if you keep in mind the visible political agenda you will see in much reporting.

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Initial reaction to alleged diversion of World Vision funds

August 8, 2016, 7:00 am
Image courtesy of Adobe Stock.

How can you tell who is really behind the mask, and what is he doing inside your organization? Image courtesy of Adobe Stock.

Last week, the Israeli intelligence service accused a World Vision manager of diverting resources to Hamas. The allegation is he diverted about 60% of the annual funds flowing through the Gaza office, with the amount diverted allegedly around $7M a year.

Some initial reactions are surfacing from donors. Also, some context for magnitude of the alleged amount. Finally, some questions to ponder for leaders of charities and those of us who audit NPOs.

8/4 – World Vision – Statement on World Vision Staff Arrest – Full statement from World Vision. Doesn’t say a lot because they don’t yet know a lot. I’m sure there will be more comments as the situation develops.

8/5 – Reuters at Business Insider – Australia suspends World Vision funding over allegations its Gaza representative funneled millions to Hamas – The Australian government has provided about $4.4 million over the last three years to World Vision for use in helping people living in Gaza and West Bank. The aid has been suspended over the allegations.

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How do you keep one person from diverting funds and causing a front-page fiasco for your charity? World Vision illustration.

August 5, 2016, 5:35 pm
Image courtesy of Adobe Stock.

Image courtesy of Adobe Stock.

How do you keep one person from creating a public relations fiasco or, even worse, damaging the reputation of your entire organization? How do you keep a manager from illegally diverting a huge amount of resources?

What controls and procedures do you have in place to prevent something like this in your organization?

Let’s start with a FBI agent who pled guilty to charges of passing sensitive and classified information to a Chinese government official and businesses in China.

8/1 – ABC News – FBI Employee Arrested for Allegedly Acting as Secret Chinese Agent – According to the story, we can drop the word ‘allegedly.’ This week he entered a guilty plea to one felony charge. The government claims he was gathering sensitive and classified material based on instructions from his handler.

He was born in China and was naturalized in 1985 at age 16.

So, the FBI with all its investigative powers and intentional counter-intelligence operations was not able to prevent this man from being an agent of the Chinese government.

So what chance does a nonprofit charity have of filtering out people who want to do bad stuff? That is something to consider as we grieve the following story.

This week the story broke that a manager of the Gaza office of World Vision allegedly diverted a lot of money to Hamas for use in terrorist activities. At this point the story consists of allegations, but allegations from the Israeli security service after a few weeks of interrogation are extremely serious.

8/4 – Hareetz – Top Official in Christian Aid Group Charged With Funneling Funds to Hamas – The security service, Shin Bet, arrested the director of the Gaza branch office on June 16. He was indicted Thursday.

Shin Bet accuses the manager of joining an armed wing of Hamas in 2004 and being sent to infiltrate a western aid organization a year later.

In 2005 he was hired by World Vision and in 2010 was promoted to director of the Gaza branch.

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