Friday, January 4, 2013

WAC Embezzlement: 'Still No Arrests'

In a September 26, 2012 post, ASOC member Beverly Hueter wrote a prescient comment regarding the lock-out:

"... I also think that as we continue to agitate for more and better information about how this whole debacle went down, we will find that the bigger problem lies with those that hold S.R. under their thumb. It looks to me like this whole WAC umbrella structure needs to be scrutinized under a very high-powered microscope. Anyone know a good investigative reporter?"

The next month, as was reported by the AJC, the embezzler of $1.5 million left WAC ... in November the fraud was discovered and the embezzler confessed. 

In December 21, 2012, the AJC attempted to update its story, and got nowhere. 

I scrolled through the comments section on the Dec. 21 story to find this one:

Let's look at their latest Form 990. It was prepared by Sallie P Lawrence, who claims to be a paid preparer, but she lists her address and firm as the Woodruff Arts Center (WAC) itself. She does not identify herself as a CPA nor does she list her PTIN number. WAC paid $228,250 for accounting services during the year. The Form 990 is 136 pages, with the first 46 being readable, and the last 90 pages being the Schedule O printed one line per page (unreadable). For expenses, the third largest is simply "Other" for $11.5 million. The two highest paid employees made $744k and $581k. If WAC had hired a CPA firm to conduct an audit and prepare the taxes, rather than doing the taxes with an employee, the CPA firm likely would have confirmed the invoices from the largest vendors, and discovered that there was no one available at the fraudster to confirm. The fraud should have been detected. But perhaps the fraud is larger, and involves the $11.5m Other as well as the outsized salaries (outsized for an organization in the red).

And this one:

"Woodruff would have been better advised to get the prosecution arranged before airing their dirty laundry in public and broadcasting that they aren't responsible stewards of their patron's contributions. I wonder why they went to the US Attorney rather than the Fulton County District Attorney. Perhaps they thought they could get special treatment. Relevant charges under Georgia Law are theft by taking and forgery in the 1st degree.  I will think again before ever contributing to the Woodruff or any of their organizations."

So ... if I were going to perpetrate a successful fraud, I'd need to find another negligent arts institution with a big sloppy budget, overpaid management, which doesn't contract an outside accounting firm.  Is there another one?

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