Fraud Case Study
1. Watch video
https://www.youtube.com/watch?v=HDdjHbkYqD0
2. Read case study
Credit Card Fraud and Accountability Case Study (Sorenson and Goldsmith, 2018)
Millicent Lowe, principal of Shermer Boynton School, was perceived by the school
community as an outstanding instructional leader. That is, until she was arrested and
charged with three counts of theft by embezzlement for using a school credit card for
personal expenditures. Principal Low used a district credit card for more than $15,0000 worth of purchases for personal use and another $28,200 that was, at the time of her arrest, unaccounted for, according to Grace Harper, Cade County police investigator.
Detective Harper noted that a random audit by the Northern Lakes School District
turned up a charge on the district credit card issued to Principal Lowe at a store on the island of Maui, in Hawaii. The auditor continued to examine numerous charges over a 12-week period and found other credit card charges that were not school-related expenses. The auditor, in the company of a district business officer, contacted Principal Lowe about the charges and Lowe stated she must have accidentally used the wrong credit card and then offered to write a personal check to cover the $4,300 in charges found during the 12-week period of the school audit.
The auditor and school district business officer both declined to accept the check and
returned to the district business offices to uncover the remaining credit card charges
dating from an almost three-year period. To make the scheme work, Principal Lowe
would simply log onto the district’s budget and fiscal accounting system, upload
associated receipts, add a corresponding budget code, and the click the “approve”
button.
In addition to the Maui store charge during a summer trip to Hawaii, Principal Lowe
also used the district credit card to purchase gift cards for family members and friends; auto rentals; summer European tours to England, France, and Italy; alcohol purchases; cellphone services; computer and laptop purchases for family members; clothing; and numerous fool purchases at differing restaurants within the Northern Lake School District and in Hawaii and at differing cities across the nation as Principal Lowe and husband followed the Grand Lakes University football team, attending games each fall.
When Principal Lowe was asked by Detective Harper why she committed the credit
card fraud, she responded, “I accidentally used the district credit cared for a purchaseof shoes and when I realized nothing happened, it just became an easy thing to do.
You know, no one was watching, no one seemed to care. So, I just kept on doing it. I
was planning on paying the money back as soon as my husband returned to work
following his layoff at the Grand Lakes Steel Mills three years ago; it shouldn’t be a
problem. I know other principals and teacher are doing the same thing!”
Sorenson, R. & Goldsmith, L. (2018). The principals guide to school budgeting. Corwin
3. Using The Fraud Triangle as a backdrop, analyze the actions of Millicent
Lowe from each of the three factors that may contribute to an individual
participating in fraudulent behavior. From the case study, identify and list
the specific behaviors exhibited by Ms. Lowe that are aligned to each factor
(Pressure, Opportunity, and Rationalizing).
In your opinion was there any one factor that had a greater impact on her fraudulent behavior? If so, explain why?
Do any of the explanations provided by Ms. Lowe excuse her behavior or exonerate her in any way?
What, if any, responsibility lies with the school for Ms. Lowe’s behavior?
What things might the school have done to prevent this from occurring?
Did others in your group align Ms. Lowe’s behaviors differently than you? Discuss
Other thoughts?
