I spoke to a relative of mine yesterday about a similar incident he had at his small engineering firm. An office assistant who was in charge of the books was caught making personal purchases using the company credit card. It had gone on for years. The good news is that the money stolen was covered by liability insurance. He gave the insurance company the credit card receipts of the employee's purchases and the insurance company paid that amount back to his company. The insurance company then went after the thieving employee to recover what money they could.

Does your museum's liability insurance cover theft?

Since important follow-up reporting so seldom gets the distribution and coverage that the original (typically sensationalistic) reporting on a story does (the entire basis for the term "drive-by media" used to excess by Rush Limbaugh and others), I thought it important to add the following:

http://www.wfmz.com/news/news-regional- ... d/25928892

Interesting, my cousin works at that station.

The conclusion, for now at least:

http://www.wfmz.com/news/news-regional- ... s/30283314



From Trains Newswire, citing a now-behind-paywall Reading Eagle article:

The original 6-chime Reading steam whistle, that was on loan to the WK&S since 1963, is still missing after having been removed by persons unknown between July and September, 2013 from a locked location. A police report was filed prior to the discovery of the monetary thefts but nothing has been uncovered as of yet.
Rob

Hope they find that whistle. It was there for 50 years then someone swipes it? If it was locked up perhaps someone with the key took it? They should lock all valuables in the engine shed. And put alarms on it that alert the police if breaking and entering is attempted. There should be more police patrols around the Kempton station area while it is closed during the week and the winter. You know, a vandal with a paint can could do considerable damage to the historic equipment, or worse physical damage to the equipment such as dents and dings to the metal or wood, or windows broken if they have tools or rocks. What if a firebug wanted to torch the stations? You never know. Maybe they should consider fencing and alarming the station area, including over the tracks with gates, they can open the north gate when trains are running, they hardly use the track south of the station area anyway so that gate could be closed. It's too open there and unprotected.

Too true. I haven't seen the in guy in several years, but a member of my old NRHS chapter in Florida is looking at a lot of jail time for embezzling well into six figures from the booster organization of my alama mater. I never would have thought he was that type.

https://ujsportal.pacourts.us/DocketShe ... 01746-2014

Public information and a warning that this can happen anywhere.

What are the chances the organization will see all or some of the restitution?

Mike Tillger

"What are the chances the organization will see all or some of the restitution?"

It is not well known, but most correctional organizations utilize inmate labor, for several reasons. The first is that stuff needs to be done. Most inmates are not "lifers" and many are totally unacquainted with the rudimentary job skills of showing up on time and suppressing the impulse to tell their boss where to go. Most look for opportunities to make money, because they are required to pay for costs upon release, and honey buns (the preferred sweet of offenders everywhere and forget smokes, they are the commodity currency behind bars) and ramen noodles and radios and TV's aren't free, either.

Because of the limitations of using inmates for the facility's needs, there are inmate industrial operations. They generally produce things for other governments or agencies or nonprofits, but not for the general public.

(In Pennsylvania, if you've seen a truck that said "Big House Products", you've seen the products of Pennsylvania Correctional Industries).

http://www.cor.pa.gov/PCI/Pages/default ... MR0RWctGP8


Inmates compete to work for these industry operations, because they pay more than the KP duty at the facilities. Its a reward to get one of those jobs.

When I had direct financial knowledge of these operations, a good wage was 50-75 cents per hour.

The short story, probably not much of a chance.

Well probably not on prison wages, no. But white collar criminals have a better chance of making a living wage outside. And crime restitution debt is almost impossible to shake off: bankruptcy won't purge it, the statute of limitations on a court judgment is often much longer, renewable, and paused during jail. You just never know.

Superheater I agree with internal safeguards and would go farther - like separating those who can write checks from those who can sign them. However it's difficult to make some safeguards work. Our banks say flat-out they don't check for signatures on the check. The vendor doesn't care if your Board made a resolution that only it can approve credit lines.

Now, how about EXTERNAL controls? Flow your revenue through reliable, independent third parties. Do online ticketing through Whistletix, Vendini, EventBrite, Groupon etc. Raise money through Kickstarter, Amazon, Justgive etc. Take payments through Amazon or PayPal.

Every transaction is logged through somebody else's banking-grade system that none of your staff can tamper with. Invariably there's provision for multiple logins and separate privileges, so more staff can put "eyes on the data" at times of their choosing. That includes bookkeepers and auditors, and by the way, bookkeeping is easy. No cashier's statements to sort out, no deposit slips to lose, etc. In many ways these systems make your job easier, once you overcome the shock of doing things a different way. For the non-embezzling volunteer, it is airtight protection from loose accusations, because the truth is in the custody of a reliable third party.

If your treasurer is resistant to putting in systems like this, pay attention to the context and manner of their resistance. It may be a big red flag.

Your bookkeeping can also go online, but it's expensive. The same advantages apply, plus you can work from anywhere. Like post a deposit as you walk out of the bank while somebody else is writing checks. You have multiple usernames, different privilege levels and every change is logged. This log can't be tampered with by keeping double company files or by restoring from backups or by messing with the PC's clock, as can happen in PC-based systems.

Now some people fret about hacking. I notice it's people with little technical sophistication but watch a lot of TV. They are also the ones most likely to share passwords, surf dodgy websites, and open phishing emails. Keep them out of the system but don't let them keep you in the dark ages.

That about sums it up. Any reliable provider of online services will be near the top of their security game. Target, eBay and Home Depot(?) were hacked with varying degrees of success - mostly with little or nothing to show for it, but they were big targets (sorry).

As you mentioned, people with little regard or knowledge of basic online security features are the problem and having a secure password PLUS a backup person who in an emergency can administer the account AND a backup protocol of your books/files will provide 99.999% security in that regard.

Not necessarily. Target is also one of those service providers. Target only admitted that their online retail services was hacked. They have not (as far as I know) stated if any additional online payment processing transactions were at risk. They are a major service provider for other clients and also provide pre-employment background checks among other services.

Very slim. In the newspaper article, the convicted felon is quoted as stating to the Court that he's on disability, something that began during the thefts. With the ability to earn income diminished, it would appear doubtful that the money will be forthcoming anytime soon.
Rob

It is also worth noting that for every theft such as this you hear about, there are several you do not. I know of another player in this field that was victimized in a very similar manner as the WK&S, but as far as I know they never publicized the theft. I think victims do that in hope of someday getting restitution, instead of prosecuting and putting the culprit in jail, which virtually ensures you will never see any restitution.

Having been both a Treasurer in this industry, and speaking as someone who frequently does interview and hire people in my day job:

I agree that the requirement to double-sign checks is now worthless - at any large bank today you could sign the check "George Washington" and deposit it in your account - banks, and their front-line tellers, make no effort to check signatures any more.

If you do a background check, and find a serious criminal history, it is a very good indication that you will have trouble with that person going forward. That's even if the crime(s) have nothing to do with what the position is now. That's my experience.

I think the simplest way to deter this type of fraud is to require credit cards for all transactions, or as much as possible. For sales, probably 90% will be by credit card already, so that won't be a problem. For payments, require volunteers to use a company credit card, and have someone besides the Treasurer review the statements every month. If someone then spends $20K at Home Depot it will show up right away on the monthly statement, if not sooner: many credit cards will deny such out-of-the-ordinary large transactions. And many credit cards have built-in protection against fraud and theft.

And the occasional audit works well - for example, if you had 500 people on the train that day, at $10 a ticket, you should have $5000 in combined deposits for the day. An occasional spot check even as simple as that will catch most people who are stealing out of the till. If a volunteer gets defensive about doing such a spot check, be very wary.

Chris.