Church leaders drain at least $673,000 from accounts.

Task 1: Critically evaluate the fraud scheme used by the perpetrator 

Osborn used the banking fraud scheme. He had signatory control over all accounts of
Alliance banks and on wealth managements , he transferred all funds from the investment
account of RBS to the checking accounts of Alliance bank. From 2008 to 2013 Meyer was hired
as treasurer and Osborn cashed $505,754 from 298 checks. In the same way, he withdraws
$29,754 from 2008 to 2012. From 2008 to 2010 $278,000 was signed by Meyer by 27 checks.
Osborn uses all these checks of Alliance bank as payable for Ashton Holdings and LLC
Company owned by Osborn. By Paliotta, the senior detector of frauds the financial and economic
offenses at district prosecutor’s office, the reason for using this money to buy the checks of
Alliance Bank made of holdings of Ashton. Paliotta also predicts that Osborn used some amount
of currency from these checks to pay genuine expenses of the church out the remaining money in
their pocket. That is why the authorities couldn’t decide that Meyer and Osborn had stolen the
money. The church felt some mysterious shortfalls in the account after becoming four years of
Meyer and Osborn as a treasurer. Bills were not funded at a given time and salespersons were
directing late notices. The church minister also said that she was not being salaried regularly.
Some church councilors were concerned and disturbed. Meyer and Osborn guaranteed the
members of the council that everything was well and maintained this lie with the database that
displayed that no money was misplaced. 
The Osborn becomes the treasurer of church when the church of united Methodist needs
somebody to handle the money and funds. And the Osborn was volunteered as a head of finance
office. He told them that he had been a financial advisor for a long time and he would be
thankful and glad to be a in charge of funds and accounts in church. His wife was also offered to
become a treasurer and she was CPA lawyer at that time. The parishioner of 150 years old
church, made of usually of blue collar employee and they were happy to have two people on the
same job according to the rules of church attorney.
In 2012, Osborn also take a loan of 60,000 dollars to deceive the parishioner as he wants to help
one of his business companions. And he did not pay the money back on swore due date of the
loan.
With the passage of time, the parishioner of the church decided to meet his barrister who
appointed a private detective to research and enquire the Osborn. They investigate that in 13
cases between 1990 and 2006 worth of total of 275,000 dollars were filed contrary to Osborn.
This also included U.S Revenue provision taxes of 42,000 dollars from unpaid debts and
business promises. In 1992 Osborn was an agency’s treasurer and stole 120,000 dollars from the
Housing Authority of Camillus. He was also condemned for faking business records and he was
ordered to pay the money back and he has sentenced to imprisonment of five years. The lawyer
and investigators told the church pastor that Osborn used the fraud scheme with treasures of the
church and all the financial problems of the church were due to Meyer and Osborn. It was
determined by Onondaga's Attorney’s officers that Meyer and Osborn stole approximately
673,000 dollars while doing church finance management.
Task 2:
Perpetrators of fraud often display “red flags” or warning signs. Discuss
common red flags being associated with the fraud perpetrator in the above
case. 
 
The red flag is a condition that is strange and different in nature from the common condition.
It is basically the sign of signal that something wrong is happening in the surrounding which is
not normal and preventive measures should be taken. Red flags do not designate any kind of
innocence and guilt but indicate imaginable initial warning signs of scams or fraud. The action of
fraud is nearly always hidden but sometimes it discoverable. The main significance of the
discovery is knowing what we looking for. Here are some red flags used by Meyer and Osborn
that could help to know that fraud is happening in the administration of the Church. 
 Deficiencies of money or other possessions.
 Complaints from shopkeepers, members of the church, employees, and donors about the
late receiving of salaries and other financial issues.
 Mistaken financial business reporting’s.
 In 2012 we took a loan of 60,000 dollars to say he had to help his business partner but he
does not repay the amount at the due date.
 Non-existent or untimely financial statements.
 In 1992 Osborn stole 120000 dollars from the housing authority of Camillus while doing
the job of agency treasurer.
  Transformed or missing business documents.
 From 2008 to 2013 Meyer was employed as treasurer and Osborn cashed 505,754 dollars
from 298 checks. 
 Uncommon transactions from banks.
 After four years of Meyer and Osborn jobs, the church felt some mysterious shortfalls in
bills and checks 
 The complaints also came from the pastor of a church that we were not being paid
regularly.
 From 2008 to 2012 Meyer cashed 29,754 dollars from 17 checks.
 From 2008 to 2010 Meyer cashed 278,000 dollars from 27 checks which were allocated
to Alliance Bank and Osborn used all of these checks to procure the official checks of
Alliance bank.
 According to a senior investigator of financial crimes and economic frauds James
Paliotta, the purpose of Osborn to use the checks as Ashton Holdings was to make money
doubtful and tougher to follow.
Rationalization is an important factor in most types of frauds. Rationalization includes person
reconciliation and their activities with commonly recognized notions of trust and decency. Some
common justifications for obligating frauds are such that Osborn uses this fraud scheme as he
believes this fraud is right to save his family. He belied that no one will help him so he had only
this option for their loved ones. Meyer and Osborn believed that if they do not steal the money
they will miss important things in their lives such as cars homes etc. sometimes they borrow the
money and promised to pay it back but that was the only label of theft. Osborn may also be
dissatisfied with his job and believe that something should be owed to him. The Osborn was
basically incapable to understand his actions but he was giving red flags to the other members of
the church. The given case is related to the small church in New York, which served the public
for about 150 years and work on an yearly budget of no more than 20,000 dollars. The
accountants mainly created through the settlement in their estates, which is a series of donations
to fund a multiple needs within the minister attorney office. After some years the donation
increases and reach more than 600.000 dollars.
Task 3:
Apply the fraud triangle to the above case and discuss various aspects related
to each triangle in detail.  
 
The fraud triangle is a structure that is mostly used in reviewing the reason behind a person’s
decision to obligate fraud. There are three main circumstances in the above case are the
following:
 Opportunity
 Rationalization
 Pressure
Opportunity 
Opportunity is the condition that allows the scammer to do fraud. A person basically can do a
fraud. It is the only component in the fraud triangle which a company can handle and control.
Opportunity is usually increased with misunderstanding and inattentiveness. It can also be
defined as the capability to perform the plan sort of being caught by other members. For
instance, in any association physical inventory and assets are accountable. Is there any point in
the process where only a single man having an opportunity to distract the drift of funds away
from the administration to himself? There will be no limits on the staff workers to access any
portion of physical assets and inventory. But for the employee who wants to make fraud with the
organization, he could do that very easily when the opportunity is provided. For committing any
fraud some examples offer the opportunity. 
 When internal control is weak the scammer can easily make fraud. Internal control is a
procedure applied to certify the integrity of financial and accounting information. The
internal control can be weak in many ways such as poor documentation, poor parting, and
assigning the duties, and deficiency of supervision. These absences allow fraud. 
 How did the organizations respond to right the surroundings that allowed the scam to be
committed in their administration? Each agency should “follow the cash” that the
member of aristocracy entrusts them by examining each step in their method of paying
and receiving funds, to look for internal control management weaknesses.
  The director of the board and administration team should exemplify and do not should
only pay the service sip to obedience and upholding ethics. It means the person at the top
of the organization should be straightforward and honest which display integrity and
should uphold good corporate principles. The tone at top of the organization should
trickle down to the middle line and ultimately to the lowermost line.  
Pressure 
The pressure usually states the monetary needs of a man. A man under financial pressure, the
public will mark the end that is fraud or theft. Nothing more than this would be noticeable to
them, neither their family nor their job. Fraud usually happens when opportunity combines with
pressure. The pressure is an incentive in arrears of fraud constraining, and that could be either
from superior’s pressure or private financial pressures. Both of the pressures give the incentive
for obligating the fraud. If the pressure maintain unsolved by legal and rational means, then the
person mights go for ridiculous ways. Some financial pressures are such that cannot be shared or
pressure of paying back the loan to banks, shortage of revenue, and looking after their lifestyles.
Some other examples of pressure are leading and teaming pressure from window dressing
financial record, selling and inventory pilferage, sharing the secrets with challengers to earn
money, etc. when a man cannot get the honest way to achieve the work goal then he or she could
implement dishonest ways and alternatives.
Rationalization 
The last component of the fraud triangle in the given case is rationalization. Rationalization is
validation for committing any fraud. This is the ability to encourage themselves that something
you are doing is well and reliable. Much mental calisthenics is needed to do but that a point. If a
man understands that calisthenics then how could this will happen? Some of the rationalizations
that Osborn use in this case are as follows:  
 Any separate person may be malicious towards their administrator and have faith that
obligating the fraud is a technique of getting payback.
 A lower line thought the upper administration also doing same so the bad tone of the top
members may cause a separate to follow in the footpaths of top-line members in the
corporate hierarchy. 
  Another rationalization is that a person thinks there is no more solution other than this
and he will lose everything his family members car, job, and bank balances unless he
commits fraud.
 The individual trust that committing fraud is the only way to save loved ones and family.
 Rationalization is a belief of the person that he will defeat everything important for him
such as a car, home, and family without taking money. 
Red flag is an unwanted situation that involve in fraud and scam and waste resources. Whenever
a detective examine the stock of Church or any other financial records certain unwanted features
comes out as a red flag, the circumstances that appear as the existence of fraud red flag act as a
contributor at that stage.
Task 4: 
Discuss the possible solutions of how to prevent such cases in future and also
few lessons learned from the given case
Any practiced fraud examiner will express to you that it is not possible to prevent all types of
frauds, but certainly, people are trying to advocate for a connecting system that deters or
eliminate the fraud for some instances. If the posture of the church had implemented any anti-
fraud features then they would definitely notice the shortfalls of money and could prevent the
fraud much earlier. For example, the church council should make the management and have a
background check and balance on checks, Osborn's previous conviction, and many legal
entanglements would have appeared. Then they both were not in the position to trust them as
treasurer. If the church councilor had complete internal control management and had specific
separate duties for each it would have prevented the misappropriation of checks and funds or
they may discover the fraud sooner.
 The banks' accounts could also be prevented on early illegal withdrawals by demanding
the bank to mail declarations directly from one member and reconciliation them by
another member.
 The church leader should demand the periodically list to board from Meyer and Osborn,
not just guaranteeing them that all is good with the fake spreadsheets. If the members of
church attorneys had more diverse capabilities and backgrounds, possibly they could
prevent the installed system from fraud. In their alternative, Meyer and Osborn managed
 the managerial and financial expertise into the disturbing organization. Maybe if the
councilor applied and actual whistleblower policy can prevent from scam. Perhaps if the
members of church or community knew any past checkered list of Osborn they would
have come onward and slanted off the church. 
 Fraud happened when someone is allowed to be unaccountable in the chain. The solution
for this is quite simple as he should be a bind for appropriate approval of check
transactions, separation of job and he should give proper reconciliations of all funds and
accountability checks. The church or administration needs to be careful if see any of this
changing in an employee:
 Any money transactions for business purpose that do not make any sense.
 If the decisions of banking management are dominated by a separate group or person.
 If the administration is unwilling to give information to accountants and councilors are
continuously involved in arguments with accountants.
 If the change is showing in the behavior of the accountant, in just anxiety of losing his
job.
 If the company properties are sold at lower rates in markets and continue taking loans. 
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