State Police: 10 percent increase in financial crimes

February 20, 2013

Staff Report

The Illinois State Police (ISP) — Zone 2 Investigations saw a 10 percent increase in financial crimes they investigated in 2012.

Last year, the ISP opened 46 cases involving potential financial crimes, up from 41 in 2011.

For the first month of 2013, the ISP already opened seven cases and has made three arrests.

A large number of cases we investigate involve allegations of embezzlement from nonprofits or small businesses,” said Captain Jim Winters of the ISP. “Of those cases, a majority are instances where volunteers at nonprofits or employees at small businesses take advantage of their access to financial assets.”

Winters added that companies are more easily taken advantage of when they lack internal controls to regulate expenditures or do not have systems in place to review and audit their finances.

While some investigations are brought to prosecution and restitution is made, many result in financial losses that are never recovered.

Some of the measures suggested to minimize financial theft include the following:

• Minimizing or eliminating debit or credit cards for non-profits;

• If debit or credit cards are used, requiring original receipts for purchases to be submitted for review and retention;

• Requirement of two signatures on checks over a specified dollar amount;

• Controlled access to petty cash funds;

• Avoid situations where a sole individual is entrusted with all financial authority;

• Establishing a voucher system for nonprofits so all expenses fall under an approval/review policy;

• Monthly reconciliation of bank statements and financial review; and

• Yearly audits.

Winters also warned that many small businesses and nonprofits are taken advantage of financially because people are uncomfortable questioning employees who may be friends or family members.

Quite a few of the financial crimes we investigate could have been avoided if those with spending authority were regulated by systems that afford protection of financial assets,” Winters said. “It’s also important for people not to have blind faith in those, including family and friends, who are entrusted with the finances of an organization or business.”

From the Feb. 20-26, 2013, issue

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