Case in Point

Trusted assistant steals $365,000 from not-for-profit



On June 27, 2014, Christie Talbot appeared before Judge John C. Rowley in Tompkins County Court and pleaded guilty to second degree grand larceny. Talbot stood accused of stealing more than $365,000 from the Society of Personality and Social Psychology Inc. (SPSP), a private, not-for-profit organization, at which she worked as an administrative assistant.

History of SPSP and Cornell

SPSP, founded in 1974, is "an academic society for personality and social psychologists focused on exploring and promoting research centered on how people act, think and behave," according to its website. In 2013, SPSP established its permanent headquarters in Washington, D.C. Before then, the society would house its administrative offices at the academic institution where its current executive officer was working.

At the time of this fraud case, SPSP was at Cornell University in Ithaca, New York, with Cornell faculty member, David Dunning, as its executive officer. According to reports filed with the Internal Revenue Service, as reported on the SPSP website, SPSP is a growing organization with total revenues of $1,130,000 in 2010 increasing to more than $2,130,000 in 2013. Net assets of $1,756,700 in 2010 grew to $3,910,000 by 2013.

Laying the foundation

In 2006, Cornell hired Talbot as an administrative assistant for Dunning and to assist with SPSP. Her responsibilities included scheduling and planning events for the society and assisting in paying the bills for these events. Talbot had the perfect training, experience and personality for the job, and she quickly gained the trust of her co-workers and superiors. She became friends with another administrative assistant, Kristin Tolchin, until Tolchin left SPSP for another job in early 2008. Overall, Talbot's new job went smoothly and all of the organization's operations appeared to be in order.

Discovering the fraud

Because SPSP was growing rapidly, its leadership decided to review the administrative structure in early 2012. The board of directors realigned and restructured existing positions and created new positions, including a chief financial officer. SPSP hired Susan Schroeder, a CPA with substantial accounting experience, for this new position. She provided new insight and a more analytical perspective to the financial operations. Before SPSP hired her, it didn't have in-house accounting expertise because of its small size and lack of resources.

As one of her first tasks, Schroeder began an internal audit of the society. She quickly discovered 171 missing checks associated with the accounts in Talbot's care dating from 2007 — shortly after Talbot began working for SPSP — to 2010. To avoid arousing Talbot's suspicion, Schroeder was careful to ask Talbot to provide checks for the previous four years to corroborate tax information.

After Schroeder's initial email request, Talbot began to display obvious signs of distress and guilt. Schroeder noted that she was being "very uncooperative." When Talbot failed to turn over the checks, Schroeder sent a second request via email. Talbot's response to this request indicated that she "has them and started a box to ship," but she "accidently dropped the box with the files, and have had to go through and sort them back out," according to New York state Tompkins County courthouse records, People of the State of New York vs. Christie Talbot, page 8. This odd behavior and delay in producing the checks raised a red flag for Schroeder and caused her to push for the needed information.

Ultimately, Talbot gave Schroeder a disorganized box of canceled checks. Schroeder hoped to be able to corroborate the missing checks with the gaps in the accounting journals. She instead found obvious signs that Talbot had created fictitious bank reconciliations — presumably in an attempt to cover up the missing money. This led Schroeder to believe that she'd uncovered an embezzlement scheme involving fraudulent check disbursements. Schroeder contacted the SPSP executive committee and urged them to interview Talbot face-to-face and follow through with an investigation of the alleged fraud.

 


For full access to story, members may sign in here.

Not a member? Click here to Join Now. Or Click here to sign up for a FREE TRIAL.


 Your Rating:
Your Review:
  
Reviews
 
By Peter_Temminck
 
By PATRENA_SANDERMAN_2