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NONPROFIT FRAUD: WHAT YOU NEED TO KNOW PART I: THE FRAUD October 2, 2014 Leslie C. Kirsch, CFE Manager, Forensic Accounting Services

2014-10-02 Nonprofit Fraud: Part I - The Fraud

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Page 1: 2014-10-02 Nonprofit Fraud: Part I - The Fraud

NONPROFIT FRAUD: WHAT YOU NEED TO KNOW

PART I: THE FRAUD

October 2, 2014

Leslie C. Kirsch, CFE Manager, Forensic Accounting Services

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OBJECTIVES NONPROFIT FRAUD: THREE-PART SERIES

PART I: THE FRAUD • Why it is important that you are educated in fraud • The magnitude of fraud in nonprofits • The types of frauds in nonprofits • Why does fraud occur in nonprofits • Some important fraud prevention takeaways PART II: THE DETECTION • Who are the fraud perpetrators? • Why do people commit fraud? • How is fraud detected? • What are fraud red flags? • Fraud detection techniques • What do you do when you uncover fraud? PART III: THE PREVENTION • What are the primary factors contributing to fraud in nonprofits? • Detective versus preventative controls • What are the best preventative measures? • The five critical takeaways!

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AGENDA

• Why you need to be educated about fraud

• What you need to know about the impact of fraud

• Common types of fraud in nonprofits

• Case study # 1

• Case study # 2

• More case studies

• Summary – the important takeaways!

• How can Raffa assist you in preventing and detecting fraud

• Resources and suggested reading

• Questions and answers

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WHY YOU NEED TO KNOW ABOUT FRAUD

THE TOP TEN REASONS! 1. Nonprofit organizations are very susceptible to fraud and abuse

2. Don’t count on your outside auditor to uncover the fraud

3. Fraud increases when the “pressure / incentive” increases,

which increases in a poor economy1 and layoffs (fewer employees doing more)

4. You probably have some sort of fraud in your organization going on and you don’t know it

5. A fraud in your organization could bring unwanted outcomes, such as adverse publicity, loss of support, lower employee morale, and disruption of your operations

1 See article, “In Tough Economy, Employee Theft Climbs to Epidemic Proportions, Expert Says,” Statesman.com, November 2011.

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WHY YOU NEED TO KNOW ABOUT FRAUD

THE TOP TEN REASONS! (CONTINUED) 6. The IRS requires you to disclose instances of fraud – Form 990

– more transparent to donors

7. You cannot afford the loss, cost of the investigation, and disruption to your operations

8. Asset (cash ) misappropriations are by far the most prevalent frauds committed against nonprofits and the most important resource

9. The fraud perpetrator is not easily known to the organization. In many cases, the perpetrator is “someone you know and trust”

10. You could find yourself personally liable for damages

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WHY YOU NEED TO KNOW ABOUT FRAUD

NONPROFIT FRAUD IN THE NEWS

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http://tinyurl.com/lp6qmp7

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WHY YOU NEED TO KNOW ABOUT FRAUD

FORM 990 RETURN OF ORGANIZATION EXEMPT FROM INCOME TAX

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WHY YOU NEED TO KNOW ABOUT FRAUD

FORM 990 RETURN OF ORGANIZATION EXEMPT FROM INCOME TAX

Explain (1) the nature of the diversion, (2) amounts or property involved, corrective actions taken to address the matter, and (3) pertinent circumstances. A diversion of assets includes any unauthorized conversion or use of the organization's assets other than for the organization's authorized purposes, including but not limited to embezzlement or theft. Report diversions by the organization's officers, directors, trustees, employees, volunteers, independent contractors, grantees (diverting grant funds), or any other person, even if not associated with the organization other than by the diversion. For this purpose, a diversion is considered significant if it exceeds the lesser of (1) 5% of the organization's gross receipts for its tax year, (2) 5% of the organization's total assets as of the end of its tax year, or (3) $250,000.

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WHAT YOU NEED TO KNOW ABOUT FRAUD

A WORLD WITHOUT DECEPTION

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WHAT YOU NEED TO KNOW ABOUT FRAUD

Go to http://www.acfe.com/rttn.aspx to download the report. Part I: The Fraud* Page 10

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WHAT YOU NEED TO KNOW ABOUT FRAUD ACFE REPORT TO THE NATIONS

SUMMARY OF FINDINGS • Typical organization loses 5% of its annual revenue to fraud (applied to

2013 Gross World Product = $3.7 trillion)

• Median loss is $145,000

• Fraud lasted 18 months before being detected

• 85% are asset misappropriation schemes

• Most likely detected by a tip than any other means

• Small organizations are disproportionately victimized

• Most occupational fraudsters are first-time offenders with clean employment histories. Approximately 95% of occupational fraudsters had never been charged or convicted of a fraud-related offense, and 82% had never been punished or terminated by an employer for fraud-related conduct

• In 92% of cases, the fraudster displayed one or more behavioral red flags that are often associated with fraudulent conduct. – Living beyond their means (44%) – Experiencing financial difficulties (33%) – Unusually close association with vendors or customers (22%) – Excessive control issues (21%)

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WHAT YOU NEED TO KNOW ABOUT FRAUD

ACFE REPORT TO THE NATIONS SUMMARY OF FINDINGS (CONTINUED)

• Perpetrators with higher levels of authority tend to cause much larger losses. The median loss among frauds committed by owners / executives was $500,000, the median loss caused by managers was $130,000, and the median loss caused by employees was $75,000

• The longer a perpetrator has worked for an organization, the higher fraud losses tend to be. Perpetrators with more than 10 years of experience at the victim organization caused a median loss of $220,000. By comparison, the median loss caused by perpetrators who committed fraud in their first year on the job was only $51,000

• 72% of all frauds in the study were committed by individuals working in one of six departments: accounting, operations, sales, executive / upper management, customer service, and purchasing

• More than half of victim organizations do not recover any losses that they suffer due to fraud. 58% of victims had not recovered any of the perpetrator’s takings.

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WHAT YOU NEED TO KNOW ABOUT FRAUD ACFE REPORT TO THE NATIONS

SUMMARY OF FINDINGS (CONTINUED) • Not-for-profit organizations made up the smallest portion of the

ACFE’s dataset, accounting for more slightly more than 10% of reported cases

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WHAT YOU NEED TO KNOW ABOUT FRAUD ACFE REPORT TO THE NATIONS

SUMMARY OF FINDINGS (CONTINUED)

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WHAT YOU NEED TO KNOW ABOUT FRAUD ACFE REPORT TO THE NATIONS

SUMMARY OF FINDINGS (CONTINUED) • Small organizations (those with fewer than 100 employees)

continue to be the most common victims in fraud

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WHAT YOU NEED TO KNOW ABOUT FRAUD ACFE REPORT TO THE NATIONS

SUMMARY OF FINDINGS (CONTINUED)

Part I: The Fraud* Page 16

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WHAT YOU NEED TO KNOW ABOUT FRAUD ACFE REPORT TO THE NATIONS

SUMMARY OF FINDINGS (CONTINUED)

Part I: The Fraud* Page 17

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WHAT YOU NEED TO KNOW ABOUT FRAUD ACFE REPORT TO THE NATIONS

SUMMARY OF FINDINGS (CONTINUED)

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WHAT YOU NEED TO KNOW ABOUT FRAUD

CONCLUSIONS AND RECOMMENDATIONS

• Occupational fraud is a global problem

• Fraud reporting mechanisms (hotlines) are a critical component of an effective fraud prevention and detection system

• Organizations tend to over-rely on audits

• Employee education is the foundation of preventing and detecting fraud

• Surprise audits are an effective, yet underutilized tool

• Small businesses are particularly vulnerable to fraud

• Internal controls alone are insufficient to fully prevent fraud

• Fraudsters exhibit behavioral warning signs of their misdeeds

• Effective fraud prevention measures are critical

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WHAT YOU NEED TO KNOW ABOUT FRAUD

THIS WEEK IN NONPROFIT FRAUD – CASES REPORTED IN LAST SIX MONTHS

• “Detroit-Area Doctor Admits to Providing Medically Unnecessary

Chemotherapy to Patients”

• “Houston Woman Admits to Defrauding Charity of More Than $65,000”

• “Brooklyn Man Must Pay $522,000 in Israeli Charities Scam”

• “Judge Sets Sentencing Date for Myrtle Beach Area Ponzi Scheme Preacher”

• “Indianapolis Church, Swindled Out of $400,000, Faces Uncertain Future”

• “Oxfam Anti-Fraud Boss Jailed for Stealing £65,000 From the Charity”

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WHAT YOU NEED TO KNOW ABOUT FRAUD

NONPROFIT FRAUD

• Why nonprofits face a disproportionate level of fraud: – Lack of internal controls / segregation of duties

– Lack of tone at the top / oversight – “volunteers” vs. “the store owner”

– Lack of hiring – due diligence

– Lack of anti-fraud programs

– Too much reliance on audits to catch fraud

– More “mission” driven versus “profit” driven

– Greater culture of “trust”

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WHAT YOU NEED TO KNOW ABOUT FRAUD THE SIZE OF THE NONPROFIT SECTOR2

• As of June 2014, 1,429,801 tax-exempt organizations:

– 966,599 public charities – 96,584 private foundations – 366,618 other types of organizations (e.g., chambers of commerce, fraternal

organizations, and civic leagues)

• Nonprofits’ share of the U.S. GDP was 5.5% in 2012

• In 2012 (the most recent date in which these figures were aggregated), public charities accounted for: – $1.65 trillion in revenue

• Of the revenue, 21% came from contributions, gifts, and government grants; 73% came from program services revenues, which include government fees and contracts; and 6% came from “other” sources, including dues, rental income, special event income, and gains or losses from goods sold.

• In 2012, private charitable contributions, which include giving to public charities and religious congregations, totaled $316.2 billion

2 National Center for Charitable Statistics, “Quick Facts about Nonprofits,” http://nccs.urban.org/statistics/quickfacts.cfm.

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WHAT YOU NEED TO KNOW ABOUT FRAUD

THE MOST IMPORTANT POINT YOU WILL TAKE AWAY FROM THIS SEMINAR SERIES!

• TRUST IS NOT AN INTERNAL CONTROL!

• Design your systems and procedures so you do not have to rely

on trust as a control!

• Any person is capable of committing fraud!

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FAMOUS QUOTES

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FAMOUS QUOTES

“Trust, but verify.”

• 40th President of the United States Ronald W. Reagan (1911-2004)

“Verify, then verify some more.” • Senior Partner, Raffa, P.C., Lawrence J. Hoffman, CPA/CFF, CVA,

CFE (1954-?)

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MY BOOK!

EXPECTED RELEASE THIS SUMMER!

STAY TUNED!

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WHAT YOU NEED TO KNOW ABOUT FRAUD

THE FIVE MOST IMPORTANT TAKEAWAYS 1. Trust is not an internal control!

– Establish, to the extent possible, controls and procedures that eliminate the element of trust

– Always segregate the custody of the asset with the recordkeeping for the asset

2. Set the tone from the top! – “If you are stealing, your employees are stealing!” – E.g., office supplies, expense reports, etc.

3. Know your employees! – Background investigations and public records checks before hiring – Meet and establish a baseline relationship

4. Institute a fraud policy – No tolerance – Will prosecute

5. Establish a hotline for tips – Number one method for detecting fraud! – Can outsource

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TYPES OF FRAUD

THREE BROAD CATEGORIES OF FRAUD

• Financial statement fraud • Corruption • Misappropriation of assets

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TYPES OF FRAUD

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TYPES OF FRAUD

FINANCIAL STATEMENT FRAUD • Fraudulent financial reporting (“cooking the books”). Intentional

misstatement or omissions of amounts or disclosers in financial statements designed to deceive financial users when the effect causes the financial statements not to be presented, in all material respects, in conformity with GAAP – Examples:

• Falsification of accounting records • Omissions of transactions or disclosures

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TYPES OF FRAUD

CORRUPTION • Schemes that involve the employee’s use of his or her influence

in business transactions in a way that violates their duty to the employer and obtains benefit for themselves or others: – Conflicts of interest – Bribery – Illegal gratuities – Economic extortion

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TYPES OF FRAUD

MISAPPROPRIATION OF ASSETS

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TYPES OF FRAUD

MISAPPROPRIATION OF ASSETS • The theft of an entity’s assets where the effect of the theft causes

the financial statements not to be presented in conformity with GAAP (sometimes referred to as “defalcation”)

• Misappropriation of assets can be accomplished in various ways, including: – Embezzling – Stealing assets – Causing an entity to pay for goods or services that have not been

received or causing an entity to overpay for goods or services actually received

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TYPES OF FRAUD

MISAPPROPRIATION OF ASSETS • Revenue and cash receipts (collections) schemes:

– Cash skimming / unrecorded sales / contributions – Cash larceny – Lapping schemes – Write-off of accounts receivable – Unauthorized credits – Check tampering (stolen, altered)

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TYPES OF FRAUD

PURCHASING AND CASH DISBURSEMENT SCHEMES • Fictitious invoices and vendors (shell company)

• Check tampering – Forged maker (check signer) – Forged endorsement – Altered payee

• Bank wire transfers

Part I: The Fraud* Page 35

From “Disputed Handwriting” by Jerome B. Lavay

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TYPES OF FRAUD

PAYROLL AND EMPLOYEE EXPENSE REPORTING SCHEMES

• Payroll schemes – Ghost employees – Falsified hours and wages – Overtime abuses

• Expense reimbursement schemes – Mischaracterized expenses – Overstated expenses (altered receipts) – Fictitious expenses (bogus receipts) – Multiple reimbursements

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TYPES OF FRAUD

NONCASH ASSET MISAPPROPRIATIONS • Misuse of assets for personal use

• Inventory

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CASE STUDY # 1

The Washington Post, Wednesday, June 3, 2009.

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CASE STUDY # 1

WHAT WENT WRONG? • Position of perpetrator: Controller

• Length of time employed: 3 years, 11 months

• Length of time fraud lasted: 3 years, 6 months

• Schemes involved in fraud: – Fraudulent checks and wire transfers – Used electronic signatures and signature stamps – Falsified accounting of transactions in books and records – Provided forged documents, including bank statements, to independent

auditors

• How was the fraud discovered?: Executive Director found checks written to perpetrator and an unknown bank account statement in his office after he was terminated for poor performance

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CASE STUDY # 1

HOW MUCH DID IT COST? • Organization’s annual budget: $2.7 million

• Total fraud loss to the organization: $425,558 (fidelity bond was only $30,000 with $5,000 deduction)

• Other losses to the organization: Disruption to operations and legal and forensic consulting fees

• Where did all the money go?: New 2006 BMW 325i car, furniture, vacations

• What happened to the perpetrator?: – Criminal prosecution – Conviction – 41 months in Allenwood, a low-security correctional institution in White Deer,

PA – Ordered to pay restitution of $470,990.59

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CASE STUDY # 1

LESSONS LEARNED • Lack of segregation of duties – a “one-man show”!

– Segregate the custody of the asset with the recordkeeping!

• Lack of oversight controls and financial reviews, including review of financial statements, reconciliations

• Use of signature stamp

• Inadequate fidelity bond coverage

• Too much trust and not enough verification!

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CASE STUDY # 2

ORGANIZATION CURRENTLY UNDISCLOSED

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CASE STUDY # 2

WHAT WENT WRONG? • Position of perpetrator: Director of Information Technology

• Length of time employed: 7 years, 7 months – voluntarily left employment and left country

• Length of time fraud lasted: 7 years, 5 months

• Schemes involved in fraud: – Billing scheme – shell company – billed for IT equipment that was never

received by the organization or was received, but the price was inflated

• How was the fraud discovered?: – Whistleblower – person who replaced perpetrator notices discrepancies and

anomalies in past IT inventory and procedures

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CASE STUDY # 2

HOW MUCH DID IT COST? • Total fraud loss to the organization: $3.5 million ($1.3 million

recovered from insurance)

• Other losses to the organization: Disruption to operations and forensic consulting fees and unwanted negative publicity

• Where did all the money go?: Amusement park in foreign country

• What happened to the perpetrator?: Fled the country

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CASE STUDY # 2

LESSONS LEARNED • Lack of internal controls / segregation of duties

– No separation of custody of asset with recordkeeping

• Lack of a packing and receiving reports match

• One person controlled the procurement, receipt, and deployment of the assets

• Lack of inventory controls – “The wolf watching over the hen house”

• Too much trust and not enough verification!

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MORE CASE STUDIES

The Washington Post, May 31, 1997.

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MORE CASE STUDIES

The Washington Post, August 17, 2011.

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MORE CASE STUDIES

The Blog of Legal Times, September 26, 2012.

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MORE CASE STUDIES

The Washington Post, May 1, 2010.

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MORE CASE STUDIES

The Associated Press, January 14, 2013.

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MORE CASE STUDIES

The Washington Post, November 25, 2013.

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WHAT YOU NEED TO KNOW ABOUT FRAUD

THE FIVE MOST IMPORTANT TAKEAWAYS – AGAIN! 1. Trust is not an internal control!

– Establish, to the extent possible, controls and procedures that eliminate the element of trust

– Always segregate the custody of the asset with the recordkeeping for the asset

2. Set the tone from the top! – “If you are stealing, your employees are stealing!” – E.g., office supplies, expense reports, etc.

3. Know your employees! – Background investigations and public records checks before hiring – Meet and establish a baseline relationship

4. Institute a fraud policy – No tolerance – Will prosecute

5. Establish a hotline for tips – Number one method for detecting fraud! – Can outsource

Part I: The Fraud* Page 52

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HOW CAN RAFFA ASSIST YOU IN PREVENTING AND DETECTING FRAUD?

HOW WE EMPOWER YOU • We identify and assist you in mitigating fraud risk by performing

a fraud risk assessment

• We perform fraud investigations if you are, or suspect you are, a victim of fraud

• We provide litigation support, expert testimony and forensic accounting services in business disputes, financial due diligence, bankruptcies, arbitrations and mediations

• We analyze, investigate and interpret complex transactions to provide an understandable, well-researched and unbiased valuation of your business or organization

• We have expertise in restructuring and turnaround management for underperforming and distressed organizations

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HOW CAN RAFFA ASSIST YOU IN PREVENTING AND DETECTING FRAUD?

A resource for the nonprofit community to help organizations effectively manage risk and better ensure the

prevention and detection of fraud.

VISIT US AT WWW.RAFFA.COM/FRAUD

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HOW CAN RAFFA ASSIST YOU IN PREVENTING AND DETECTING FRAUD?

OUR WEEKLY NEWSLETTER

OU

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SOME AREAS WE WILL BE GOING OVER IN OUR OTHER PRESENTATIONS

PART II: THE DETECTION – NOVEMBER 6, 2014, 12-2 P.M. • Who are these people that commit fraud? • Why do they commit fraud? • How are most frauds really detected? • Specific things you should have in place to help detect fraud • What should you do when you uncover fraud? PART III: THE PREVENTION – DECEMBER 4, 2014, 12-2 P.M. • What are the primary factors contributing to fraud in nonprofits? • Detective versus preventative measures and controls • The best preventative controls and practices • The critical takeaways and how to implement them

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RESOURCES AND SUGGESTED READING

• 2012 Report to the Nations on Occupational Fraud and Abuse, Association of Certified Fraud Examiners, http://www.acfe.com/rttn.aspx

• Managing the Business Risk of Fraud: A Practical Guide; AICPA, ITA, and ACFE; https://na.theiia.org/standards-guidance/Public%20Documents/fraud%20paper.pdf

• The CPA’s Handbook of Fraud and Commercial Crime Prevention, AICPA

• “The American Fraud Report,” www.jpsimsconsulting.com

• “Fraud Talk” Blog, fraudtalk.blogspot.com

• “American Greed” series, CNBC on Wednesdays at 9 p.m.

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QUESTIONS AND ANSWERS

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BIOGRAPHY

• 35 years of consulting, audit, accounting and tax experience in the public and private

sectors.

• Started career with a Big-Four international accounting firm in Washington, DC.

• Founded a regional certified public accounting and consulting firm in 1982 and grew it to on of the Washington, DC’s largest firms in seven years. Merged his practice with Raffa P.C. in 2008.

• Managed and conducted audit and accounting engagements ranging from small privately held to large publicly held businesses in various industries, including multi-national businesses, nonprofit organizations, and governmental entities and agencies.

• Performed economic and financial analysis, including projections and forecasts, in support of litigation and claims for lost earnings and profits, business interruption, shareholder disputes, patent and trademark infringements, bankruptcy and restructuring, and structural settlements; assistance with interrogatories, document requests and depositions; and serving as an expert and consulting witness.

• Performed and supervised business valuations for both public and closely held companies in a variety of industries, individuals and estates, family limited partnerships and limited liability companies, including valuations for business combinations (SFAS 141R), mergers, acquisitions, and divestitures, estate and gift taxes, marital dissolution proceedings, buy-sell agreements, intangible assets and intellectual property, purchase price allocations, goodwill (SFAS 142) and long-lived asset (SFAS 144) impairment, fair value accounting (SFAS 157), cheap stock (IRC 409A), stock-based compensation (SFAS 123R), phantom stock and employee stock ownership plans.

• Conducted and led teams of forensic accountants on fraud audits and investigations, including fraudulent financial statements, misappropriations of assets and embezzlements; money laundering, kickbacks, bribery and conflicts of interest; insurance claims; bankruptcy; financial institutions and loan fraud. Also has conducted fraud risk assessments, anti-fraud programs, and fraud training and education.

LAWRENCE J. HOFFMAN, CPA/CFF, CVA, CFE

SENIOR PARTNER RAFFA, P.C. 1899 L STREET, NW WASHINGTON, DC 20036 TEL. 202-822-5408 FAX 202-822-0669 [email protected]

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BIOGRAPHY

• Assisted companies and nonprofits with restructuring and turnaround situations, including

recapitalizations, reorganizations and liquidations. Advised entities on Chapters 11 and 7, bankruptcy filings and proceedings and non-judicial workouts. Developed and administered crisis management plans, cash flows, liquidation and turnaround analysis, debt restructuring and creditor negotiations, and turnaround plans.

• Formulated strategic short- and long-term business and financial planning for various business organizations and served as interim “C” level positions, including for a major North American sports league, European and U.S. aircraft manufacturer, aviation charter airline and travel company, and a multi-chain quick service food chain.

• Formulated syndication strategies and prepared business plans and private placement offerings, including financial forecasts, market research and analysis, due diligence, securities pricing and structuring for various public and private securities offerings, including SEC filing.

• Founded and developed a regional NASD licensed broker dealer investment banking firm. Placed over $150 million in debt and equity and represented over $200 million in merger and acquisition transactions.

• Founded and developed two private equity funds in excess of $10 million, including investments in early stage and mature emerging companies in the form of debt and equity. Portfolio investments included aviation, food and hospitality, software and technology, telecommunications, sports and entertainment, banking and financial institutions, healthcare, and wholesale and retail.

• Co-founded and managed various real estate acquisition, ownership, and operating entities, including commercial office buildings, shopping centers, flex warehouses, residential housing and developed land.

• Performed tax and financial consulting services for individuals and closely held businesses.

• Instructor in audit, accounting, finance, and forensic accounting.

LAWRENCE J. HOFFMAN, CPA/CFF, CVA, CFE

SENIOR PARTNER

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BIOGRAPHY

LAWRENCE J. HOFFMAN, CPA/CFF, CVA, CFE

SENIOR PARTNER

EDUCATION & CERTIFICATIONS • Bachelor of Science, Accounting – Mount St. Mary’s University • Certified Public Accountant (CPA) • Certified Fraud Examiner (CFE) • Certified in Financial Forensics (CFF) • Certified Valuation Analyst (CVA) • Private Investigator (PI), Virginia • Series 7 General Securities Representative (not active) • Series 24 General Securities Principal (not active) • Series 63 Uniform Securities Agent (not active)

PROFESSIONAL ASSOCIATIONS & AFFILIATIONS • American Institute of Certified Public Accountants, Member • Virginia Society of Certified Public Accountants • Association of Certified Fraud Examiners • National Association of Certified Valuation Analysts • Institute of Business Appraisers

PERSONAL INTERESTS • Private pilot with instrument, multi-engine, high performance complex and aircraft ratings • Golf and fishing • Reading and politics

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BIOGRAPHY

• 9 years of fraud investigation and financial audit experience • Started career with U.S. Government Accountability Office’s Forensic Audits and

Special Investigations Unit • Led as many as 3 concurrent forensic audits and investigations on a variety of

topics, including: Federal contractor/grantee eligibility fraud and integrity issues; federal tax collection program integrity; abuse of government purchase cards, travel cards, and premium class travel privileges; employment of sex offenders and child abusers at schools and child care facilities; passport application fraud; manufacture and marketing of herbal dietary supplements

• Planned, developed, and completed audit and investigative objectives, scope, and methodology

• Designed innovative analytical strategies and investigative techniques to identify fraud indicators in complex datasets, using software packages like IDEA and SAS

• Identified, investigated, and ultimately referred hundreds of cases of potential fraud, waste, and abuse to federal authorities for administrative action

• Led multiple undercover operations of varying complexity and political sensitivity • Drafted numerous congressional testimonies and publicly available audit reports

(see co-authorship experience below) • Designed and implemented internal quality assurance policies and procedures • Bachelor of Science, Accounting – University of Maryland, College Park • Bachelor of Science, Finance – University of Maryland, College Park • Designated as a Certified Fraud Examiner (CFE) by the Association of Certified

Fraud Examiners • Certified as a SAS Base Programmer by the SAS Institute

Leslie C Kirsch, CFE

Manager RAFFA, P.C. 1899 L STREET, NW WASHINGTON, DC 20036 TEL. 202-955-7204 FAX 202-822-0669 [email protected]

Part I: The Fraud* Page 62