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Procurement and P-Card Fraud in the News

 

Procurement fraud, purchasing card (P-card) fraud and other inappropriate purchases are a major source of concern and financial losses in industry, government and for non-profit organizations. Here are just some of the cases making headlines now that are costing anywhere from hundreds of dollars to millions.

Singer hits sour note with $4.1 million credit card bill

Chad Arrington, a Baltimore singer who performs and records under the name Chad Focus, is facing up to 20 years in prison for running up $4.1 million in unauthorized credit card bills. Arrington’s song Dance With Me appeared on Billboard’s Dance Club Songs chart last year.

The indictment claims Arrington worked as an SEO specialist at an unnamed company, where he and four unnamed co-conspirators used a company American Express card to spend millions in fraudulent purchases such as studio kits, instruments, electric bikes, hover boards, and scooters.

Canadian Forces uncovers $1.3 million in purchasing fraud

A trial is underway in Halifax for two men charged in an alleged $1.3-million fraud against the Department of National Defence.

Businessman Harold Dawson, 60, and Bry’n Ross, 64, a former civilian contracts officer at 12 Wing Shearwater, both pleaded not guilty in Nova Scotia Supreme Court in May to one count of fraud over $5,000.

The Canadian Forces National Investigation Service announced charges, saying they involved “fraudulent purchasing activities” at the Shearwater heating plant. The alleged offences relate to purchasing activities with four vendor companies contracted to supply parts for the plant. Military police launched an investigation in 2012 after an audit uncovered the fraud.

Halifax auditor flags $36,000 in inappropriate credit card purchases by staff

An audit of purchases over a 37 month period ending in December found a host of electronic purchases amounting to more than $36,000 were inappropriately charged to Halifax Regional Municipality credit cards.

The audit identified 27 computer monitors, 26 prepaid cellphone cards, 335 cables, adapters and chargers, five printers, three tablets, one cellphone and 67 other computer accessories as items purchased by credit card that were not allowed under the purchasing card policy.

The audit also found that there were 585 active cardholders as of September and that nine cards were assigned to former employees no longer working for the municipality, including three who had left in 2016.

Ex-GBI inspector racks up $60,000 on government P-Cards

A former high-ranking inspector with the Georgia Bureau of Investigation (GBI) has pleaded guilty to making more than 325 purchases totaling more than $60,000 on government credit cards while working for the GBI. Purchases included a dining room set, lounge chairs and a 65-inch HD television.

Sandra J. Stevens, 46, also known as Sandra Putnam, had been a special agent in charge of the GBI’s Child Exploitation and Computer Crimes Unit as well as an inspector in the Investigative Division for 21 years. Stevens was arrested in 2016 after an internal audit and criminal investigation found irregularities in purchase card transactions. Stevens resigned from the GBI at the time of her arrest.

Port Everglades digging to uncover true cost of p-card spending spree

A Port Everglades, Florida plumber was fired, another quit while current and former port public works employees are under suspicion amid a quiet investigation into apparent out-of-control spending using county credit cards.

How much county money vanished over the years without anyone at the port or the county purchasing department noticing is not known. But a county source familiar with the investigation that is focused on allegedly fictitious purchases said authorities now have identified a decade’s worth of suspicious purchases by just one port worker totaling $1.1 million.

Plumber David Dean Moore was fired after investigators determined he had abused his assigned purchasing card, or P-Card, to buy faucets, backflow preventer repair kits and more than 100 feet of brass pipe that were never received by the port, according to a Broward County report.

During the same two-year period, 13 other port workers charged more than $3.4 million in purchases to the county. That includes three employees who each spent between $440,000 and $493,000.

Former mayor probed for p-card spending

An investigation that ended with criminal charges and a warning that Richwood, West Virginia could wind up owing the federal government millions, started with a probe of the mayor and $6,200 in purchasing card expenses.

Auditors started an investigation into former mayor Bob Henry Baber’s use of his purchasing card. Part of the investigation is looking into allegations that city officials also paid themselves with recovery funds from a devastating 2016 flood.

The town also failed to execute recovery projects and make payroll tax payments to the state and federal government, which authorities say could reach staggering amounts.

Federal agents seize thousands purchased online

Federal agents tore through the Albuquerque, New Mexico home of a Sandia Labs employee, seizing thousands of dollars worth of stuff, including his wife’s wedding ring.

According to federal court documents, Joshua Cordova had been trusted with several purchase cards since 2014 which he used to fill his South Valley home with thousands of dollars of items.

What Cordova claimed was a tripod, weapon mount and tool set, investigators say was really his wife’s $3,400 engagement ring. A similar cover-up was used to purchase a 55-inch TV, barber chairs, a table, tires and a trampoline. In total, agents say he spent $150,000 on at least 400 purchases using Amazon Prime.

Contact us to learn more about how Alessa can help your organization fight purchasing fraud,

 

About Anu Sood 

Anu Sood (LinkedIn | Twitter) is the Director Marketing at CaseWare RCM and is responsible for the company’s global marketing strategy. She has over 20 years of experience in product development, product management, product marketing, corporate communications, demand generation, content marketing and strategic marketing in high-tech industries.