Embezzlement Cases

The story of Suzanne Tuck

Suzanne Tuck , the wife of the Treasurer of the Ravenswood Over 50's Club (Ravenswood is in Launceston, Tasmania), was convicted of stealing approximately $53,000 in cash between 1st July 1993 and 30th August 1994.

The club conducted bingo sessions virtually every Thursday and Sunday nights throughout the year. The takings from this activity, along with other takings from raffles and other games of chance, were entrusted to Suzanne Tuck and her husband and taken by them to their home for banking in the club's account the following day.

Prior to leaving for home, Tuck and her husband each night counted the notes, while other club members counted the coins, but no record of the actual takings appears to have been made before the Tucks removed them for banking.

After August 1994, club officials commissioned an audit and by comparison with the takings for previous years, the auditors expressed the opinion that there was a probable deficiency of $40,000 - $50,000 for the year ending 30 June 1994.

Suzanne Tuck was interviewed by the police and made a number of admissions. She admitted that she regularly went to the Launceston Casino on Thursday and Sunday nights after returning home with the evening's takings from the club and extracting there from, on average, $1,000 per night in the first twelve months, which sums she invested in gambling. She admitted to losing a large amount of the money.

How to prevent fraud

Strategies that could have been implemented:

Committee members should have insisted on the keeping of records of cash counted. Instead, no record of actual takings was made before the Tucks went home each night.
A monthly income and expenditure statement should be tabled at every committee meeting. The statement should provide details of total income in the month, including the amounts raised from Bingo sessions. Committee members should read and take an interest in the financial statements of the organisation. Any significant changes in Bingo income should be noticed.
A cashflow budget should be produced each year. This would enable committee members to predict what should happen to the bank balance each month. If the actual bank balance is significantly worse than the prediction, then committee members should ask questions why.
If someone new comes into the midst and offers themselves as Treasurer, or is involved with cash collection, it may be prudent to ask for personal referees.

Moral of the Story

Nobody likes to think that a friend or colleague in a club or association would ever embezzle money from the organisation. However, embezzlement (the fraudulent misappropriation of money by a person who was trusted to handle the money) is much more common in nonprofit organisations than people would suspect.

Committees have a duty to ensure that the procedures for the collection of cash and the management of funds in an organisation are rigorous enough to dissuade people form embezzlement. People who volunteer should not be put at risk of breaking the law in this way.