A husband and wife team took a multipronged approach to defraud their employing university. Their case is rich with examples of how to violate a university's trust. Their system worked because they were trusted employees lacking oversight.
Utah Couple
Daily Herald - Woman sentenced for reportedly stealing thousands from UVU to fund travel, American Fork Theater
Salt Lake Tribune - Ex-employees charged with defrauding more than $380,000 from Utah Valley University
A common attribute of most successful frauds is that the perpetrator is a longtime trusted employee with authority and access. That's certainly the case here.
Jennifer, the wife, worked in several positions over 15 years at the university, the last as a financial manager for the College of Technology and Computing. Her husband, Phil, was the university's associate dean of students.
In addition to their university positions, the couple owned a 75-year-old discount movie theatre and managed the American Student Association of Community Colleges, a nonprofit geared toward community college student governments.
Jennifer's coworkers suspected her misconduct but delayed coming forward because they feared retaliation if they reported her. The news reports detailed some of her activities:
- She billed the university $90,730 via the couple's nonprofit for a New York trip described as "nothing more than a vacation."
- She made three other payments totaling $66,820 to a Washington D.C. hotel using unauthorized university funds.
- She used six university credit cards over five months to pay for $16,341 of renovations on the couple's movie theatre.
- She initiated payment for $2,270 of unauthorized travel expenses using a pre-signed form she stole from her supervisor.
She was able to commit those crimes because she was trusted. Her supervisors trusted her; they didn't monitor her closely.
Jessica Smith, prosecuting attorney
In addition to collaborating in the fraud with his wife via their nonprofit and theatre, husband Phil had access to student organizations' funds through his position as associate dean of students.
Taking advantage of his access, he would transfer money from student organization accounts to an account he controlled at another bank in the name of a bogus student organization.
From there, he would transfer the money to the nonprofit the couple managed to confuse the movement of funds, a simple form of money laundering. The university estimated the loss from this scheme was $34,300.
Trust is not a Control
Because they had trust, the couple's supervisors became lax in their oversight. Trust is essential in our relationships, but reliance on trust as a control becomes problematic when it's followed blindly.
Organizations establish processes and controls to provide consistency and accountability, not because of suspicion or mistrust. Supervisors must provide this oversight, showing interest and engagement in their team's work.
WSU Policy
The loss at Utah Valley would have been less significant had coworkers reported their concerns earlier. But reporting wrongful conduct is difficult and stressful, often with fear of retaliation. Section 3.58 of the WSU Policy Manual acknowledges these difficulties.
3.58 / Protection from Retaliation for Reporting Wrongful ConductKey passages:
The university is committed to providing an environment of integrity that encourages the disclosure of wrongful conduct to leadership while protecting employees and members of the campus community from retaliation.
To make a good faith disclosure of suspected or known wrongful conduct, contact the university reporting hotline at 1-844-724-5631 or via the university hotline website.
If the employee believes the wrongful conduct which has been reported continues to remain unresolved, a report should be made to the University General Counsel. Reports may be made anonymously.
Employees who believe they have been subjected to retaliation in violation of this policy should notify the Office of Institutional Equity and Compliance.