The City of Buena Park takes its turn in the hot seat recently as citizens ask, how could this happen? Former Parks and Recreation Managers Rudolph Juarez and Gabriel Garcia are facing up to 195 and 135 years, respectively, in prison. An investigation of fraud has been going on for 2.5 years, and has now resulted in 2 arrests. It is estimated that the fraud took place over a period of 6-7 years, between 2005-2011, and more than $825,000 was embezzled.
The gig was that Juarez negotiated a contract with a landscape contractor on behalf of the city and then submitted invoices for services never rendered to contractor, once the bills were paid the money then was laundered and eventually resulted in a payday for Juarez and Garcia.
They also submitted fake payroll requests for fictitious employees to the City.
Both men worked for Buena Park for upwards of 20 years each.
Insurance will cover the City’s losses in this case, but the question remains- how well are you protected from fraud within your organization?
A few tips to implement:
- Separation of duties
- Quality of employees
- Bonded employees
- Periods of absense
- Procedures manual
- Clear lines of authority and responsibility
- Pre-numbered documents
- Physical control over assets
- Tests of controls
- Controlling cash
- Bank reconciliations
- Whistleblower policy.
Onisko & Scholz can perform a review of your internal control structure and help you to strengthen them. Call today for a consultation at 562-420-3100.
By Kim Onisko, CPA, Forensic Accountant
Kim has been in public accounting for over 20 years and has a specialty in forensic accounting.