Case In Point: Lessons for the proactive manager
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Case In Point: Lessons for the proactive manager
Volume 14 Number 03 | March 2022
Quotable .....
Doing the right thing is never the wrong thing -- Ted Lasso

This month we continue our review of the events of 2021 with a focus on the Fraud & Ethics Category. This category has historically been dominated by occupational fraud – situations where employees use their position to commit misappropriation. Good old fashioned occupational fraud still led the way last year, but we have seen a great deal more diversity in this category than in many prior years.

  1. Occupational Fraud (1st)
  2. Grant Fraud (2nd)
  3. Bribery (3rd)
  4. Foreign Conflicts of Interest
  5. Wire Fraud
  6. Visa Fraud
  7. Billing Fraud
  8. Theft of Property
  9. Identity Theft
  10. Ethical Use of Funds

I recently spoke at an event for the Association of College and University Auditors on the topic of ethics, and we discussed many of the events linked in Case in Point over the past year. During this session, I briefly referenced the fraud triangle, which breaks out the three elements usually present when someone commits fraud. In my talk I covered some things about the fraud triangle that I'd like to share with you this month.

Pressure – Historically, the biggest pressure has been financial pressure (generally debt). We have seen a trend the past few years of simply wanting to live at a higher level than a person can afford. The logical explanation many have had for this twist is the impact of social media and a culture of comparison. However, we are in unprecedented times where we are coming out of a pandemic that has had a financial impact for many. Now add to that the fact that we are now seeing record inflation, and I believe many of our employees will face pressures that have not been seen in history.

Opportunity – Over the past two years virtually every institution moved to some type of remote operation. With these changes, some normal controls were inevitably lost. I predict that there are frauds currently occurring that will be discovered over the next few years in which someone took advantage of weakened controls from the pandemic.

Rationalization – In chaos it's often easier for people to rationalize short cuts in ethical behavior. For institutions that had furloughs or pay cuts, it would be easy for an employee to rationalize misbehavior. Add to the mix the post-pandemic fear that many seem obsessed with, and a dash of economic upheaval, and I believe some people will inevitably rationalize behaviors that we will not like.

With all of those factors, the current environment places all organizations in a very vulnerable place for an increase in fraud and ethical short cuts. Therefore, I believe both auditors and institutional leaders must pay very close attention to controls now more than ever. Sometimes simple things like asking a few basic questions if things seem “off” can be very effective in helping ensure good oversight.

As always, there are a multitude of risks facing our industry, and we again invite you to review this month's events with a view toward proactively managing risk in your sphere of influence. We welcome your comments and suggestions.

M. Kevin Robinson, CIA, CFE
Associate Vice President
Office of Audit, Compliance & Privacy
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Information Security & Technology Events

Mar 14: Data Breach: An email hack involving nearly 500,000 email addresses in a Brown University database took place over the weekend. This marks the latest incident at the Ivy League institution, which came under cyberattack in the spring of 2021. According to members of the Brown community, the CSV file that the perpetrators linked to included nearly 500,000 emails. (link)

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Fraud & Ethics Related Events

Mar 28: Occupational Fraud: A former employee of the Yale School of Medicine pleaded guilty to fraud and tax charges in connection to her theft of over $40 million in electronic equipment from her employer. Authorities said the woman was employed by the Yale University School of Medicine starting in 2008. She worked in the Department of Emergency Medicine, and most recently served as the Director of Finance and Administration for the Department of Emergency Medicine. As early as 2013, she started a scheme where she ordered, or had others working for her order, millions of dollars of electronic hardware from Yale vendors using Yale Med funds and arranged to ship the stolen hardware to an out-of-state business in exchange for money. (link)

Mar 28: Occupational Fraud: The former bursar at the City College of New York, Joseph Boselli, has admitted to stealing nearly $500,000 from students as part of a plea deal requiring him to serve five years of probation and pay back the stolen funds, according to court records. He admitted to engaging in "a fraudulent scheme to steal over 900 checks," totalling $497,971.85, that were originally issued to over 700 current and former students of the Harlem college between August 2012 through November 2017. (link)

Mar 24: Occupational Fraud: The former payroll director of Nassau University Medical Center was indicted Thursday in connection with an embezzlement scheme. The woman is charged with grand larceny and falsifying business records in a $121,000 scheme. According to the district attorney, she used the hospital's payroll software to funnel money to former NUMC employees. (link)

Mar 23: Rankings Data: USC will pull its Rossier School of Education from U.S. News & World Report’s next annual ranking of best graduate schools, officials said Wednesday, after discovering "a history of inaccuracies" in data reported by the school going back at least five years. Charles Zukoski, USC’s provost and senior vice president for academic affairs, addressed the decision in a letter sent to the graduate school community, noting that officials "asked U.S. News not to include the Rossier School in its graduate school rankings for 2023 while we seek to understand the situation further." (link)

Mar 22: Loan & Grant Fraud: The former director of financial aid at Reynolds Community College has pleaded guilty in Richmond federal court to wire fraud in connection with a scheme she orchestrated to defraud Virginia and the U.S. Department of Education of $379,602 in federal and state student loan and grant funds over eight years. The woman, who was hired by Reynolds in 2006, used her access to Reynolds’ financial aid systems to inflate the financial aid eligibility for several co-conspirators -- her son, her former fiance, her goddaughter and a cousin -- who were not eligible for aid at the college, according to the government’s statement of facts. (link)

Mar 22: Enrollment Fraud: Despite a request last August from the chancellor’s office that all 116 California Community Colleges report on enrollment fraud involving fake student bots, nearly 40% of campuses failed to submit any information, deepening concerns among the Board of Governors on Monday about the extent of possible wrongdoing and how it may be affecting the system’s plunging enrollment. (link)

Mar 19: Student Loan Fraud: A Louisiana man was convicted on Wednesday of defrauding the federal student loan system of more than $1.4 million in an elaborate scheme that involved posing as students and hiring impersonators to get financial aid he then pocketed. The man obtained grants and loans intended for 180 students by using their personal information to fill out federal financial aid applications and enroll them in classes at Baton Rouge Community College from September 2017 to November 2019, prosecutors said. (link)

Mar 17: College Rankings Data: Everyone knows that students buff their résumés when applying to college. But a math professor is accusing Columbia University of buffing its own résumé -- or worse -- to climb the all-important U.S. News & World Report rankings of best universities. Michael Thaddeus, who specializes in algebraic geometry at Columbia, has challenged the university’s No. 2 ranking this year with a statistical analysis that found that key supporting data was "inaccurate, dubious or highly misleading." (link)

Mar 16: Copyright Infringement: An Orange County professor is suing his students for copyright infringement after finding portions of his exams on a website used for sharing study materials. The lawsuit was filed Friday on behalf of Chapman University Assistant Professor David A. Berkovitz, who is demanding a jury trial for the five unnamed defendants. According to the complaint, Berkovitz in January 2022 found portions of a midterm and final exam he created for his spring 2021 business course on Course Hero, a website where students can access study materials for specific schools and courses. (link)

Mar 15: Theft: Two Kentucky men are facing federal charges for allegedly stealing $90,000 worth of catalytic converters, including six from vehicles at two State College businesses and Penn State. According to the indictment filed in Pennsylvania’s Middle District Court, the pair traveled from Kentucky with 22 stolen catalytic converters and picked up two more in Ohio before arriving in State College on December 1. They allegedly stole three of the valuable emissions control devices from trucks at two State College businesses that day and three from vehicles at Penn State’s Office of the Physical Plant lot the following day. (link)

Mar 13: Fraud: Federal prosecutors have charged the former chief financial officer for the Lander-based Wyoming Catholic College with defrauding a government COVID-19 business relief program, the Wyoming Business Council and a New York investment firm out of millions of dollars by falsely claiming that he had amassed a fortune in a booming gin distillery and hand sanitizer business. Not included in the charges is a $1.1 million federal loan he obtained under the COVID-19 Paycheck Protection Program, nor the $1.29 million in two PPP loans he secured for Wyoming Catholic College as its chief financial officer. (link)

Mar 09: Occupational Fraud: A grand jury has indicted a former University of Maryland employee in the theft of more than $1 million from the school over a four-year period. The employee was working at U-Md. when, between 2016 and 2020, she "abused her official position and purchasing authority" to defraud the university, the Prince George’s County state’s attorney’s office said in a statement. In total, she is accused of stealing $1,134,887.66. (link)

Mar 08: Plagiarism: The vice chancellor for research at the University of North Carolina at Chapel Hill’s medical school has admitted to plagiarizing text in an NIH grant application, according to a U.S. federal watchdog. The vice chancellor, who serves as the Kay M. & Van L. Weatherspoon Eminent Distinguished Professor of Genetics at UNC-Chapel Hill as well as vice chancellor for research, "engaged in research misconduct by intentionally, knowingly, or recklessly plagiarizing text" from two guides, material from a company that makes sequencing kits, and a review article, according to the U.S. Office of Research Integrity. (link)

Mar 05: Mail Theft: Late last summer, Ann Lauritsen suspected something fishy might be going on after both she and her mother sent greeting cards to her daughter at Boston University that never arrived. A high school math teacher, she went looking for answers and soon decided she had to take matters into her own hands. Mail theft has spiked in several parts of the U.S. in recent years. While reports of large-scale mail thefts on college campuses are rare, experts say they make for prime targets. (link)

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Compliance/Regulatory & Legal Events

Mar 26: NCAA Compliance: The scope of the Independent Accountability Resolution Process investigation into the University of Memphis athletic department appears to extend beyond simply how the men's basketball program handled former player James Wiseman's eligibility status, according to documents obtained by The Commercial Appeal through an open records request. Memphis is facing at least four Level I and two Level II violations, according to an amended notice of allegations it received on July 9, 2021. Level I and Level II violations are considered the most serious of the NCAA's four-level violation structure. (link)

Mar 23: Sexual Harassment Lawsuit: It took nearly two months, but a "Rock ‘n’ Roll" professor and the University of Michigan finally have been served with a lawsuit concerning allegations the professor raped and harassed multiple students. Eight female students have named a former teacher and curator of the Rock and Roll Hall of Fame, in a Jan. 31 lawsuit accusing him of rape, sexual harassment and other sexual misconduct. The women also allege UM has mishandled complaints made against the 71-year-old professor since 2008. (link)

Mar 24: Sexual Abuse Settlement: The University of Michigan has reached an agreement to settle a lawsuit brought by students who sought to force changes in how the school protects the campus from sexual misconduct. As part of the deal, which was filed in federal court on Thursday, the Ann Arbor school will create and pay for a multidisciplinary standing committee designed to protect the university community from sexual abuse. The school has been rocked by allegations that began to publicly surface in 2020 from hundreds of men who said they were sexually assaulted by a campus doctor who spent nearly 40 years at Michigan. (link)

Mar 24: First Amendment Settlement: An Eastern Virginia Medical School student has settled a lawsuit that alleged school officials violated his First Amendment rights. Edward Si said EVMS officials refused to overturn a Student Government Association decision denying his request to set up a chapter of a national group that supports single-payer health care. The lawsuit said EVMS officials rebuffed six separate requests for help from Si and the free speech group, Foundation for Individual Rights in Education, that worked with him in his bid to set up an EVMS chapter of the Students for a National Health Program. (link)

Mar 22: Whistleblower Lawsuit: The University of Missouri-Kansas City has agreed to settle a lawsuit filed by a whistleblower who claimed he was fired from his job as a professor because he helped The Kansas City Star uncover a scheme to inflate the rankings of UMKC’s business school. Not only did UMKC agree to pay Richard Arend $625,000 to drop his five-year-old lawsuit, but they issued a joint statement that gave Arend credit for training a spotlight on the tactics that former university officials engaged in, as The Star reported, to boost the school’s reputation in pursuit of students and donations. (link)

Mar 22: CRT Law: South Dakota Governor Kristi Noem signed a bill into law Monday which will prohibit public colleges and universities from compelling students and faculty to engage in critical race theory trainings or orientations. The bill, HB 1012, is meant to "protect students and employees at institutions of higher education from divisive concepts," according to the legislation. The legislation states that any institution under the control of the Board of Regents or the Board of Technical Education may not compel students or faculty to "personally affirm, adopt, or adhere to divisive concepts." (link)

Mar 20: NCAA Compliance: The University of Alaska Fairbanks said Friday that an investigation into its athletic programs revealed violations that were committed both within the Division I hockey program and other Division II athletic programs. The NCAA imposed a list of penalties that includes three years of probation, a $7,500 fine and vacation of team and individual records that included ineligible student-athletes. (link)

Mar 17: Sexual Exploitation of Minor: A community college coach has been charged by federal criminal complaint with sexually exploiting a child, coercion and enticement, and receipt of child exploitation video. According to in-court statements, after holding a high school basketball camp in Douglas County, the coach is alleged to have communicated on social media with a minor female. He solicited and received sexually explicit images from the child and threatened to disclose them to others if she did not send more. He also discussed meeting the minor in person. (link)

Mar 17: Child Pornography: A former president of an Indiana college was found guilty of four charges related to a 2020 child enticement incident in Sturgeon Bay. The man was arrested by the Sturgeon Bay Police Department Jan. 6, 2020, while staying at his vacation home in Door County after engaging in conversation on a mobile dating app with a police officer posing as a 15-year-old boy. At the time, he was the president of Franklin College. He was fired as soon as the college learned of his arrest. (link)

Mar 15: Confidentiality Lawsuit: In an unprecedented move, members of a confidential group that oversees animal research at the University of Washington (UW) have sued their own school to block the release of their names to an animal rights organization. People for the Ethical Treatment of Animals (PETA) has been trying to obtain this information for more than a year, charging that the makeup of the university’s Institutional Animal Care and Use Committee (IACUC) violates federal law. But the committee’s members--citing an uptick in animal rights activism at the school, including protests at the homes of individual scientists--say they fear PETA and other animal rights organizations will use their names to target them. (link)

Mar 15: Sex Discrimination Lawsuit: A jury has awarded more than $3 million to a University of Texas engineering professor who argued that the university discriminated against her based on her sex and pregnancy. Evdokia Nikolova, an assistant professor of electrical and computer engineering, filed a federal lawsuit in the U.S. District Court for the Western District of Texas in September 2019 alleging that UT denied her tenure because of her gender and pregnancy and violated Title VII of the Civil Rights Act of 1964, which prohibits sex-based discrimination. (link)

Mar 14: Sexual Harassment: Rollins College fired a long-time tenured professor accused of sexual harassment against students. The student who filed the Title IX complaint is now a senior at the College in Winter Park. Jacqueline Bengtson grew up in what she described as a diverse community in New Hampshire. Bengtson alleged the sexual harassment from one of her tenured professors included frequent, unspecified sexual innuendos in class. (link)

Mar 12: NCAA Compliance: LSU has fired their embattled men's basketball coach after receiving a notice of allegations that details significant misconduct, the school announced Saturday. According to an NCAA notice of allegations that was obtained by ESPN on Saturday through an open records request, there are eight Level I violation allegations in LSU's notice. Seven are alleged to be tied to the men's basketball program. One of those pertains specifically to football, and the two sports share an allegation that the "institution failed to exercise institutional control and monitor the conduct and administration of its football and men's basketball programs." (link)

Mar 09: Discrimination Lawsuit: Donna Johnston said she could hardly believe her ears: Did an interviewer just ask Johnston about her "whiteness"? Johnston, a licensed social worker from Plainfield, Conn., said she was floored by the question while interviewing to teach social work at Bridgewater State University last summer, when she was also asked to contemplate "your white privilege." Then in a follow-up, Johnston said she was told that "Black students may not be able to relate to you because of your white privilege." Johnston, who didn’t get the job, filed a race and employment discrimination lawsuit against the university last month, claiming she was subject to a racist interview. (link)

Mar 10: Sexual Assault: The former Director of Sports Medicine and athletic trainer at San Jose State University has been charged today with civil rights violations for engaging in sexual misconduct with female student-athletes under the guise of treating them for their injuries. The charges allege that between 2017 and 2020, the trainer violated the civil rights of four students who played on women’s athletics teams by touching their breasts and buttocks without their consent and without a legitimate purpose. (link)

Mar 09: Discrimination Lawsuit: A former TCU employee is accusing the university of "institutional racism" after she was laid off and told it was because of budget cuts, a new lawsuit against the university alleges. Linda Lopez, a former employee in regional development in the college’s university advancement department, is accusing TCU of terminating her employment because she is Hispanic, according to the lawsuit. (link)

Mar 08: Vaccination Lawsuit: Two Santa Clara University students could face the end of their academic careers at the school. This, after their refusal to adhere to university COVID vaccination requirements. Both the students said they are not on the far right politically, and not so-called "anti-vaxers." They filed a lawsuit recently against SCU over its COVID vaccination policy. They claim negligence, breach of contract, and infliction of emotional distress, for the school’s adding a vaccination deadline next week after it had collected tuition for the current semester. (link)

Mar 08: Required Wellness Program Lawsuit: Yale has agreed to settle a lawsuit over its Health Expectations Program, which required employees to either participate in a wellness initiative or pay a weekly opt-out fee. According to the complaint, filed by workers in Unite Here Locals 34 and 35, although not the union specifically, the university required employees to participate in its Health Expectation Program or pay $25 each week, adding up to $1,300 a year. (link)

Mar 06: Abuse Allegations: The USC men’s and women’s swimming coach has resigned amid an investigation into multiple allegations of abusive treatment of Trojans swimmers. An incident last April, which was first reported by, sparked an investigation that led the university to put the coach on leave. Other allegations, the exact nature of which are still unclear, were levied against the coach ahead of October, when he was forced to step away from the team. (link)

Mar 06: Sexual Misconduct: By the time Washington State University allowed a student to transfer to its flagship campus, it had evidence he was a risk. Four women at the university’s commuter campus in Vancouver had told staff the man sexually harassed them or made unwanted sexual contact. The university’s investigation of one of those cases was still underway when it approved the male student’s transfer to its Pullman campus in 2017, his senior year. The woman whose report started the investigation, whose initials are Q.R., told administrators she was concerned for students in Pullman, where there were dorms and more drinking. (link)

Mar 03: Presidential Misconduct: A Hennepin Technical College president who was accused of harassing and discriminating against employees. A St. Paul College president who was accused of a leadership style "grounded in fear and intimidation." A Rochester Community and Technical College president who was criticized for spending $10,000 on a ceremonial mace and chain for her inauguration when the school was facing a projected $2 million deficit. All three embattled community college presidents stepped down while under heavy scrutiny. And all three were appointed to high-paying administrative jobs in the Minnesota State colleges and universities system's central office immediately after. The practice has raised questions about whether the state college system takes allegations of presidential misconduct seriously. (link)

Mar 04: Title IX Lawsuit: A federal lawsuit is alleging that Brown University unlawfully discriminated against a transgender female. This suit is just the latest in a series of alleged sexual assaults involving Brown students in which one of the parties in the alleged incident has filed suit in federal court seeking action. The eight-count suit by Lane - a transgender female - against Brown and a "Jane Roe" claims breach of contract, a hostile education environment, defamation, intentional infliction of emotional distress, and invasion of privacy among the counts. (link)

Mar 03: Rape: A Transylvania University police officer has been charged with rape after an investigation which started prior to his time as a cop at the Lexington university, according to Kentucky State Police. The man's status as a sworn police officer with the university’s Department of Public Safety has also been suspended. He was hired by Transylvania in November 2021, according to the university. He cleared a routine background investigation as well as an additional extensive vetting process managed by the Kentucky Justice Cabinet prior to his employment. (link)

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Campus Life & Safety Events

Mar 29: Campus Threat: NOVA Community College has tweeted that all of its campuses are closed today due to a bomb threat. The college’s Alexandria campus was the first to announce earlier that it had closed for the day and evacuated the area. All in-person classes and services are canceled. Remote classes will continue as scheduled. (link)

Mar 25: Sexual Assault: A U.S. Army soldier in Louisiana is under arrest after being accused of raping an LSU student in her dorm room earlier this month. The LSU Police Department said they received a report of a rape on campus in the early morning hours on Mar. 13, reported by WAFB. According to arrest records, a female student told investigators that she met the soldier at an off-campus party and exchanged social media information with him. (link)

Mar 25: Privacy/Security: Shortly before midnight on a Sunday in mid-February, Medaille College security guards used their card keys to enter the rooms of several students without warning. Students said the intrusions startled and scared them. Some were asleep. Others weren't fully dressed or were in the shower. The guards, employees of Vista Security Group of Amherst under contract by the college, wore hoodies rather than uniforms; they weren't wearing masks as required by Covid protocols in place at the time; and they appeared to be on a random hunt for alcohol or marijuana, students said. (link)

Mar 24: Racial Issues: Ohio University continues to investigate four potentially racially motivated incidents in student residence halls over the past week. The university is "deeply concerned" about the "detrimental impact" that the four incidents, three of which occurred last weekend and the fourth on Wednesday, may have on communities of color, according to a news release Thursday from the Ohio University Police Department. In the first incident, police said a Black doll was taped to the door of a student’s dorm room. (link)

Mar 23: Greek Life: West Virginia University has suspended one fraternity and reprimanded three others after wrapping up investigations into a hazing reports and recent fights. Effective immediately, Delta Chi will serve a three-year suspension related to a February hazing incident. WVU will no longer recognize Delta Chi and the international chapter no longer recognizes it. Phi Sigma Phi received a disciplinary reprimand and was placed on probation by its national headquarters. Phi Kappa Psi and Sigma Nu also received disciplinary reprimands. (link)

Mar 16: Fatal Vehicle Crash: Six students and their coach were killed, along with two other people, when a van carrying members of a New Mexico university’s golf teams collided with a pickup Tuesday night in West Texas, officials said. Two other students were critically injured in the crash involving members of the University of the Southwest’s golf teams, the school said. The university-owned Ford passenger van was transporting the teams from a golf tournament in West Texas, Blanco said at the scene, according to video from NBC affiliate KWES of Midland. (link)

Mar 09: Free Speech: San Diego State University is being both excoriated and supported for its decision last week to reassign a teacher who made racial slurs during lectures to illustrate a point about language. The Foundation for Individual Rights in Education (FIRE), a Philadelphia-based civil rights group, told SDSU in an email Tuesday that the action it took against a philosophy professor violated his First Amendment rights to free speech. The professor had projected an informational slide in two courses that listed 10 to 12 slurs that have been used against Black, Hispanic, Latino, Asian and White people. He said that he had to use the specific words to explain why they are racist and should not be used. (link)

Mar 08: Vandalism/Race Issues: A man was arrested months after a mural on the Washington University campus that honors prominent figures from Black history was vandalized with racist graffiti. On Dec. 18, Washington University officers were notified the mural had been defaced. The mural, located at the South 40 Underpass, depicts famous African Americans, including John Lewis and Chadwick Boseman. The school said someone painted over the faces and added the symbol and name of a white supremacist group. (link)

Mar 03: Robbery: An alert Harvard University police officer nabbed a burglary suspect early Thursday who’s allegedly responsible for multiple recent thefts on campus, including two cases where the victims were robbed as they slept unsuspecting in their dorm rooms, according to authorities. The Harvard University Police Department said in a statement that the suspect, whose name they withheld, was apprehended around 1 a.m. Thursday in the area of Harvard Yard. Late last month, campus police had warned students about two of the recent burglaries that occurred in dorm rooms as the defenseless occupants slept. (link)

Mar 03: Greek Life: After at least six incidents of misconduct since fall of 2017 -- including two this academic year -- the University of Iowa has suspended its campus chapter of the popular Pi Kappa Alpha fraternity for at least four academic years. The Iowa PIKE chapter was among three UI fraternities found to have been involved in hosting impermissible and illegal tailgates in the fall. UI administrators in February also found PIKE responsible for holding an unregistered, and thus impermissible, party with alcohol at its house in September -- a party the university learned about from a student who needed medical attention after attending. (link)

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