Rufus Harvey, a veteran certified fraud examiner, recently conducted an investigation of a pastor who embezzled more than a million dollars over the course of several years. Ultimately, the perpetrator was caught and convicted and sent to prison. It was his controlling personality that allowed him to conceal his illicit activities from the church. People simply were too intimidated by him to challenge his words or actions. When the totality of the situation emerged and the church realized how badly they had been duped, the entire congregation and staff became demoralized. Ultimately, they disbanded. Fraud robs a church of much more than just money.
Churches can be deceived by a quiet and sneaky perpetrator, or intimidated by a demanding and controlling individual. When a church first discovers they've been embezzled, it goes through a "how could this happen to us?" phase. Once the initial shock wears off, leaders will try to determine the extent of the loss, the potential for recovering lost funds, and the steps to prevent a repeat of the fraud. All too often, churches decide to handle the investigation internally, turning to members who have accounting, finance, or other professional experience. Instead, churches should consider bringing in a certified fraud examiner (CFE).