The nice lady accountant for the Rialto USD failed to deposit all the cash collected from students for school lunches. For years. As reported by the LA Times:
Judith Oakes, 48, was charged with multiple felony counts and is suspected of stealing money from the Rialto Unified School District during an eight-year period, according to the San Bernardino County district attorney’s office.
The indictment charges a total theft of $1.8 million.
An earlier local report in the SB Sun stated that the embezzlement was over a period of fourteen years and totaled more than $3.1 million. Mighty big bucks from chump change that nobody noticed had gone missing. Had she not been so greedy that she was reduced to “stuffing wads of cash in her bra” and quietly and consistently been a more modest thief ($1,000/week instead of something on the order of $5,000/week), the theft could have remained undetected for another decade and a half when she could have begun collecting a generous school district retirement pension. But crooks tend not to be modest. It’s what trips up those that are eventually caught.
Like all addictions and long term employee thefts, this one likely started very small and possibly innocently. Borrowing a few bucks for lunch and then “forgetting” to pay it back. Repeatedly. Soon the accounting records had to be jiggered. And jiggered again in ever more complex ways as “lunch money” escalated into whatever “nice to have” other things that Ms. Oakes felt entitled to but couldn’t afford on her $60,000 a year salary and her beloved husband’s salary as a school principal. Until the sudden death of the well regarded Mr. Oakes three years ago. No indication from the reports of her indictment that the audit revealed she increased the amount she was stealing after her husband’s death, but expect her lawyer to work it into her defense.
$1.8 million over eight years works out to an average of $225,000/year. That’s 1.4% of the district’s child nutrition program budget. Far too much to avoid discovery if her embezzlement activities began only eight years ago. Easier to hide if she began cooking the books shortly after being hired fourteen years ago. Regular audits aren’t designed to uncover this type of fraud and it’s the exception and not the rule when they do. The failure was one of effective internal controls (the school district claims to have instituted new procedures in the wake of the discovery of this theft). The long-term, well-liked, and trusted employee with access to the cash and control of the accounting records is an old story. Churches and other non-profit organizations tend to be particularly vulnerable. Small businesses as well where the limited number of employees make separation of duties more difficult. But not impossible. Job rotation and required annual vacations are two other effective internal control measures that don’t directly prevent employee dishonesty but uncover it earlier rather than later.
Was Ms. Oakes literally depriving schoolchildren of needed nutrition? Probably not or not by enough that made any substantive difference. (Government “austerians” deprive millions of children of far more than Ms. Oakes could possibly do.) Big cheeses on Wall Street can steal $50,000 a day before lunch and brag about it over cocktails. Unlike Ms. Oakes, big money managers aren’t considered thieves for their ill gotten gains; just clever and innovative. And unlike Ms. Oakes, they abscond with serious money. What both do is erode the trust in institutions required for a well functioning economy and society.
Understanding Ms. Oakes and her crime should not be mistaken for empathy. White collar crime isn’t victimless. Such thieves are privileged enough that they can steal with a “pen” instead of a gun. They’re still thieves. Ms. Oakes will pay for her crime; whereas, most of those white collar thieves that trashed economies throughout the world will continue to be rewarded. Such a pity.