The Triangle

Issue date: 12/7/07 Section: News

Media Credit: MCT Campus

(U-WIRE) MEDFORD, Mass. - The words "fraud" and "embezzlement" bring to mind former Enron CEO Kenneth Lay or Martha Stewart's five-month imprisonment resulting from insider trading charges.

But after former Tufts Director of Student Activities Jodie Nealley was fired and accused of embezzling approximately $300,000 last month, students were exposed to embezzlement within the context of a university setting.

In recent years, cases of fraud and embezzlement have gained greater attention on the national scale, mostly within a corporate setting. But after several colleges experienced fraud last year, the focus on such cases in higher education has increased as well.

Education Manager Allan Bachman of the Association of Certified Fraud Examiners (ACFE), who has experience with internal auditing in higher education, said corruption in colleges and universities can generate an unusually high amount of buzz.

"There is a certain level of trust with higher education institutions, which in turn gives [educational cases of fraud and embezzlement] a little more media attention," he said.

According to the ACFE's 2006 "Report to the Nation," there were 73 cases of fraud in the education industry last year. These cases, which were reported on campuses of varying size and location, accounted for seven percent of all occupational fraud issues in 2006.

One such case occurred at the University of Michigan. In March 2006, three employees - the public media deputy director, a development director and an account executive - were fired on embezzlement allegations. These charges carried the possibility of five years of jail time and a fine of either $10,000 or three times the amount of money embezzled.

Those crimes were discovered through an investigation and full-fledged audit process, which uncovered insufficient documentation, improper reimbursement, lack of adequate authorization and potential increases in bonus payments, all of which totaled upwards of $50,000.

Auburn University also reported two separate cases of embezzlement last year. One case involved Casey Dillard, a former cashier at Auburn's College of Veterinary Medicine's Large Animal Clinic who was accused of embezzling $80,000 from the university over the span of her employment.

In the second case, former professor and adviser/treasurer to the Alpha Tau Omega fraternity, Lloyd Frank Lawing Jr., was convicted of embezzling roughly $940,000 through one of the fraternity's real estate transactions.

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