In our last blog we talked about the steps that companies can (and should) take to reduce expense fraud. This week, we wanted to highlight some of the most notorious cases of expense fraud that have happened within the past 2 decades.
In 1996, UCLA’s head men’s basketball coach was fired for expense fraud. According to news reports, the coach had instructed two of his players to attend a dinner with a recruit. Unfortunately, this practice is prohibited by the NCAA—and to hide it, Harrick lied on his expense report and said the meals were purchased for assistant coaches’ wives.
In 2014, an employee of the Department of Highways found himself in a world of hot water after it was learned that he was fabricating expense reports. This all began when he started submitting expense reports for “work trips across West Virginia.” When the scheme was uncovered, it was learned that he’d never actually taken those trips. Instead, he was using the money he received from the fake expense reimbursement to rent an apartment. News reports show he’d claimed more than $70,000 in falsified reimbursements before he was caught.
Paul and Sandra Dunham
Also in 2014, the Dunhams pleaded guilty to conspiring to commit wire fraud in connection with a scheme in which they requested reimbursement from their employer for mortgage payments on time shares in Barbados, luxury bedding for their home, a dog sofa and other personal expenses to their employer. According to a US DOJ press release, Between 2002 and 2009, Paul and Sandra Dunham fraudulently charged personal expenses to their corporate credit cards and submitted vouchers to PACE for reimbursement that falsely described the expenditures as business expenses. For example, Paul Dunham represented that $3,007 had been spent on meals during business meetings, when in fact the money was spent on luxury bedding for his upscale North Carolina residence. Sandra Dunham sought reimbursement for $8,397 which she represented as expenses incurred to cancel a vacation due to a business meeting, when these expenses were actually mortgage payments the couple made on two separate time share units the couple had purchased in Barbados. Other personal expenses which were falsely described as business expenditures included personal legal fees, expensive furniture, a domed pet residence and a dog sofa.
As a result of the lengthy scheme, $1 million in actual losses were incurred.