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Church Leader Caught in Embezzlement Scheme Goes to Prison

Lax internal controls can leave any congregation wide open to theft and scandal.

Illinois
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Key point 7-21 . Embezzlement refers to the wrongful conversion of funds that are lawfully in one’s possession. Embezzlement is a common occurrence in churches because of weak internal controls.

An Illinois court sentenced a church trustee to two eight-year terms of imprisonment, and ordered him to pay $278,703 in restitution, for embezzling funds from his church.

A church trustee (the “defendant”) was given two credit cards by his secular employer to cover business expenses. He used them to obtain $278,703 in cash advances. He deposited the funds illegally obtained from his secular employer into a church bank account, which he then made withdrawals for personal use.

The defendant used the money for car payments, air travel, family vacations, rental cars, and his gym membership. He also used some of the money to pay for legal fees and restitution related to his criminal cases.

The defendant’s pastor submitted a letter in which he stated that the defendant and his family had attended the church for about ten years. According to his pastor, the defendant, who was a church trustee and youth ministry coordinator, had oversight of several checking accounts at the church.

After the pastor learned the defendant was involved in theft at the defendant’s employer, he discovered the defendant had been using the church bank account to launder the stolen funds.

The defendant was found guilty of two felonies and was sentenced to two eight-year terms of imprisonment, to be served concurrently.

At a sentencing hearing, the pastor of the defendant’s new church testified that the defendant, the defendant’s wife, and their two children had joined the church about a year and a half earlier. The pastor of the new church was aware of the defendant’s criminal conduct and had counseled the man in that regard.

According to the pastor of the defendant’s new church, the defendant was very involved in the church and was a “reformed, changed man.” The defendant’s wife was a music director at the church, and when the defendant was incarcerated, she and the children lived in converted office space at the church.

Prior to sentencing, the defendant made a formal statement (allocution) to the court in which he apologized for his conduct. He described himself as a broken man whose true character included integrity and honesty.

In imposing the sentence, the trial court considered both “aggravating” and “mitigating” factors.

The aggravating factors included a criminal history (the defendant had committed a similar offense in another church). The court also found that a lengthy sentence was necessary to deter others.

Mitigating factors included the absence of physical harm, and the fact that incarceration would cause extensive hardship to the defendant’s family. The court commented that the defendant had “a lot of good attributes” apart from his criminality.

What This Means For Churches

This case is relevant to church leaders for four reasons:

  1. Many church leaders consider embezzlement to be a problem that “couldn’t happen here.” Yet, it is this very attitude that contributes to poor or nonexistent internal controls over the handling of cash and the paying of expenses that makes embezzlement a real threat.
  2. The defendant was able to embezzle $278,703 of church funds because of the board’s failure to institute internal controls over church finances—enabling the trustee to treat the church checking account as his personal, unsupervised, slush fund. Had the church implemented basic internal controls, the defendant could not have engaged in embezzlement.
  3. Church leaders may not be fulfilling their fiduciary duties when they fail to implement basic internal controls over cash handling and the payment of expenses. Such a failure can result in legal and financial consequences to individual officers and directors, as well as criminal liability to the embezzler.
  4. The legal consequences of embezzlement can be severe.

People v. Ser Voss, 2018 IL App (2d) 160138-U (Ill. Ap. 2018).

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Posted:
  • August 28, 2019

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