Residents and business owners may have seen a news story recently about a woman arrested in late June 2024, for stealing COVID-19 relief funds meant for the City of Weston. There are several news stories online that one can search that describe how this person used the funds to purchase luxury goods and other services. She is now facing charges that include; fraud, money laundering, and grand theft in excess of $100,000.

The City of Weston is the entity that initiated an investigation back in early 2021, when Assistant City Manager/Chief Financial Officer Darrel Thomas contacted Broward County to inquire about the City's missing payment.  The missing check was the second in a series of two countywide payments to all of the cities in Broward, to reimburse Weston for the cost of enforcing the County’s COVID-19 emergency orders.  When told that it was already cashed, Thomas asked for a copy of the endorsement on the back of the check and saw that it was a different bank than the City of Weston’s bank.  He informed the County that the check had been fraudulently deposited.

It is unknown how the perpetrator got a hold of the check but it never arrived at Weston City Hall, and an investigation ensued by the U.S. Postal Service and BSO.  

The City did receive its money, this time via an electronic funds transfer a few weeks later in the amount of the missing check.  After the fraud incident, all subsequent COVID-relief payments from the County to Weston were made by electronic payment.

Combating Check Fraud: 

There are very few techniques the City can implement to prevent check fraud.  For outgoing check payments, the City utilizes a service called Positive Pay.  Positive Pay sends a file to the bank listing the check detail information.  When a City check is presented for deposit, the information must exactly match the information in the file submitted to the bank.  If it doesn’t match, the check is rejected.  This protects the City from checks being fraudulently altered or created.  But it does not prevent valid checks from being stolen during the delivery process and deposited by the bad actor(s).

According to the Association for Fraud Examiners, check fraud is the #1 type of payment fraud.  This is why the City strongly encourages the use of electronic payment methods such as card payments or electronic funds transfers for both outgoing and incoming payments.

Background of CFO Darrel Thomas: 
Mr. Thomas has worked in finance and accounting for the City since 2006.  Prior to that he worked in accounting at an investment firm. He has a Masters of Science in Finance from Florida International University with a concentration in Financial Risk Management.  He has taken courses on fraud and risk management from professional associations including the Association for Finance Professionals, the Government Finance Officers Association (GFOA) and the Association of Fraud Examiners.  He has been asked to speak at numerous training sessions at both the GFOA and the Florida GFOA on the subject of financial fraud, financial risk management and internal controls.  He also trains City staff on financial fraud and internal controls at our annual Staff Ethics Training.

Summary:  

We can’t prevent 100% of fraud, but we can implement systems, best practices, and internal controls to prevent most of it.  The real work lies in adhering to those best practices and internal controls.  For those instances when fraud does occur – and it will – have swift, strong methods in place to respond to those fraud incidents, report the incidents immediately to management and law enforcement agencies, and prosecute perpetrators under the law.  It may mean some bad publicity, but it will send the message that your organization is serious about fraud prevention and corrective action.