Tuesday, March 23, 2010

The Sad Story of Embezzlement at the London Philharmonic

The London Times provides a detailed look atf an embezzlement scheme so audacious it is hard to imagine - and hard for the London Philharmonic's chief executive, Tim Walker, to accept.  The Philharmonic's general manager and financial director, Cameron Poole, managed to take 666,000 pounds before the theft was discovered.  The situation is a classic one for embezzlement:  Poole had access, Poole was trusted by others at the organization, and the embezzlement started small but grew as it went undiscovered. What is less usual is that the Philharmonic had put procedures in place, recommended by the auditors, that required four steps to approve any expenditure.  The problem was that Poole simply did all four steps, using false invoices that he created.  He was the person preparing reports for the auditors, so he could cover his tracks there as well.


A judgement has been entered against Poole for 2.3 million pounds, the total cost of his misdeeds, and a criminal proceeding is pending.  The Philharmonic has also sued its auditor, Deloite, which audited the records three times without uncovering the theft. 

The Poole embezzlement has been described as a "wake up call" for arts organizations in the UK. Charities everywhere should pay heed.

sng

http://lawprofessors.typepad.com/nonprofit/2010/03/the-sad-story-of-embezzlement-at-the-london-philharmonic.html

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