Fifty Shades of Fraud, Part II By Ben P. Lee, CPA, CFE, CFF, CGMA, CGFM, CGFO Managing Member, Coastal CPAs, LLC
CASE II: Ms. Politician Living “High on the Hog” at Taxpayers’ Expense.
I
hope you found Case I interesting. Case
grandchildren) enjoyed courtesy of the taxpay-
he was wrong. The jury bought it and acquitted
II involves a very lengthy investigation
ers’ resources. She misappropriated assets of the
Ms. Politician, under the belief that Ms. Politi-
of an elected government official. I’ve
County and other governments through “theft of
cian was a very good person and she would never
handled many cases in Georgia involving
cash and manipulation of records.” Ms. Politician
do the things she was accused of.
constitutional officers in County governments
had her own private “piggy bank!” She rational-
in each of the statutory offices: Tax Commis-
ized her behavior by telling herself that she was
The GBI, County Commissioner, District Attor-
sioner, Clerk of Court, Probate Court and Mag-
entitled to more resources than her salary.
ney and many citizens were upset with the result.
istrate Court. Because the offices are established
During the GBI investigation, the County exer-
by the Georgia Constitution, these elected offi-
Ms. Politician was very skillful in deceitfully dis-
cised its duty under Georgia law and the Gov-
cials are called “Constitutional Officers.”
playing herself as a wonderful helpful person like
ernor removed Ms. Politician from office and
“Aunt Bee” in the Andy Griffin show! She went
appointed a temporary Tax Commissioner to
Each Constitutional Officer acts as an agent for
to almost every funeral in the County, purchased
complete her term.
their County, as well as other governments and
flowers for each one, sent birthday cards to all of
agencies. They have a fiduciary responsibility to
her known supporters and provided many other
During this time, I was a consulting instructor
follow due care in the operation of their office,
favors. “Other favors” for her most loyal support-
for the University of Georgia Institute of Gov-
including preparing and preserving accurate and
ers meant their tax bills would not have to be
ernment and a partner in two CPA firms, one
transparent accounting records. Additionally, to
paid. How could you not vote for Ms. Politician?!
that exclusively performed audits of local governments. During the investigation, the County
report all financial activities in a timely manner (especially amounts collected and due to others)
The CPA performing the County audit for sev-
solicited my governmental audit firm to become
and provide timely and accurate payments to all
eral years could never obtain evidence to verify
their audit firm beginning the next fiscal year.
parties with which there is an agency relation-
the amount of Motor Vehicle Ad Valorem tax.
The trial ended during the summer and the
ship. Accountability and transparency are impor-
The records were in such disarray, with many
County’s year end was December 31. Neither my
tant democratic values, and the Constitutional
nonexistent, making it an impossible task. He
partner and I, nor many others, thought that Ms.
Officers of county governments must be held
reported his findings regarding this situation
Politician would be interested in being Tax Com-
accountable both to the taxpayers and citizens
each year to the County Commissioners. Ms.
missioner much less, be elected. But in Novem-
who empower and are served by them, as well as
Politician would tell the Commissioners that the
ber, she was elected to take office on January 1.
to the states in which they are created. The State
CPA was a terrible auditor, was too demanding,
We began our field work in May of that year. At
of Georgia, county governments, taxpayers, and
requesting records that were not necessary, and
the request of the Commissioners, we began our
citizens retain a stake in their performance.
trying to support some other person that wanted
audit procedures with testing in the Tax Com-
to run for Tax Commissioner. “The auditor was
missioner’s office.
The Oath of Office of a Tax Commissioner states,
just out to get her!” This worked for a while,
“I do swear that I will faithfully discharge the
until the State Dept. of Motor Vehicles paid a
The tax commissioner is required to pro-
duties required of me by law as tax collector and
visit. She told the state that the CPA had all the
vide annually an account of his or her offi-
that I will diligently collect all taxes required by
records and she could not provide them. It was
cial actions respecting the county taxes and
law for me to collect and faithfully pay these over
easy for the State to verify that was not the case.
funds and to make his or her books, vouch-
to the persons authorized to receive the same. So
They smelled something worse than a skunk and
ers, accounts, and other things pertaining to
help me God.” Unfortunately, Ms. Politician’s
dug deeper, getting the District Attorney and
his or her office available for inspection by the
attitude in our case was that she was not account-
GBI involved. Soon Ms. Politician was in court.
county governing authority. So legally, she had
able to anyone, she controlled her “kingdom.”
Her defense attorney managed to rattle the CPA,
to let us in her office.
This Georgia Tax Commissioner was an expert
who was inexperienced in testifying on a wit-
at getting votes and funding the lifestyle that
ness stand, and did an excellent job in making it
We started our testing procedures with a “surprise
she and her whole family (children, in-laws and
appear as if a personality conflict existed and that
cash count” in the Tax Commissioner’s Office.
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ELEGANT ISLAND LIVING
