Tuesday, January 13, 2009

Damning New Disclosures On Penrod Theft

When Somerset CPA firm hired Brandon J. Benker as a junior auditor in 2005, its firm's president knew he had prior charges against him in Delaware County in 2004 for identity deception, a felony, and conversion, a misdemeanor, stemming from the theft of money from a college friend's checking account at Ball State University where he was an accounting student to feed his gambling addiction. That's in addition to a conviction for drunk driving according to a new IBJ report by Kathleen McLaughlin raising these and other damning disclosures in the aftermath of the discovery that Benker stole $380,000 from the Penrod Society while serving as the organization's assistant treasurer. [Photo credit--IBJ]

Even further damaging to the politically-connected CPA firm are revelations of what happened after he went to work for the firm and later was promoted to a supervisor position. While working for Somerset CPA, Benker pleaded guilty to a felony drunk driving arrest from March of 2006 in Hamilton County after nearly striking a police officer while traveling 72 mph, more than double the speed limit. The same year he went to work at Somerset, he also filed a Chapter 7 bankruptcy, listing assets of $8,610 and liabilities of $78,570 according to McLaughlin's report. McLaughlin's report says the 27-year-old Benker lives at home with his mother in Carmel.

Somerset CPA has been heavily involved in promoting and supporting the Penrod Society, which puts on an arts fair at the Indianapolis Museum of Art each year. Pat Early, Somerset's president, once served as head of the organization. Early is currently vice president of the CIB and formerly served as its president. Benker, through the firm's involvement with the nonprofit, became its treasurer in 2007 and became an assistant treasurer in 2008 after turning over his job to another Somerset firm member, Gene Zoellner. Benker continued to have access to Penrod's checking account, however, and took every penny of the organization's $380,000 according to McLaughlin without Zoellner's knowledge. The organization and firm learned of the theft after Benker's attorney, James Voyles, contacted them and told them what Benker had done.

When McLaughlin raised Benker's gambling-related arrests with Early, he described it as a misunderstanding with a roommate. “It was a misunderstanding with his roommate,” Early said. “We had gotten that verified by both attorneys. We had to have a pretty detailed explanation of what happened.” Early grew testy when McLaughlin asked him about Benker's drunk driving arrests. “So does half the young population that went to school,” he said irritably. “What we’re really guilty of in this whole thing is encouraging our people to get involved in the community. “We try to do the best we can to make sure the people working here are all upstanding, good young professionals. … We missed this guy’s personality.”

I'm willing to give Somerset a pass on failing to appreciate Benker's gambling problem when he was first hired, but don't you begin asking questions when an aspiring new CPA at your firm files bankruptcy, gets a felony drunk driving conviction and lives at home with his mom? And that's without asking how nobody noticed the money had disappeared from the organization's bank account until being notified by Benker's attorney, Jim Voyles. None of it inspires much confidence, does it? Laying that aside, I'm disturbed that no criminal charges have been filed against Benker after he confessed to the crime in November. What gives, IMPD?
UPDATE: An earlier post inadvertently used Zoellner's name in the fourth paragraph instead of Benker's. This unfortunate error was corrected as soon as Mr. Zoellner brought it to my attention. I apologize for any confusion this may have created.


MissouriDemocrat said...

I read the IBJ article and was amazed that any responsible accounting firm would not have completed a full investigation of their new employees and learned of these past incidents. Then i found it even more amazing that the firm would allow that criminal to serve one of its charitable causes as a treasurer holding checkbook authority. That accounting firm should be forced to pay the 380,000 out of their funds back to Penrod.

Hoosier in the Heartland said...

There are lots of hanging threads in this story.

Was Benker a MEMBER of Penrod, which is a 501(c)3 organization?

Or -- Did Penrod contract with Somerset to handle their funds?

Or -- Did Somerset provide this service pro bono as a charitable contribution?

If Benker/Zoeller were not elected officers and/or board members of the 501(c)3, who on the Penrod board was in charge of overseeing their work?

Much has not been revealed here.

As Missouri Democrat said, seems like there's a liability here on the part of Somerset for abdicating their fiduciary responsibility.

varangianguard said...

You wonder what's up with IMPD? Well, just read the story above this one. That's at least one reason why, some of them are awfully "busy".

I agree with MissouriDemocrat that Somerset should be on the hook for repaying the money to Penrod. No matter what kind of "personality" he was at the office, they put him in charge of the money at Penrod.

Cathy Sue said...

When I read the article, I was appalled that a guy with this background and these kinds of problems would be hired and retained as an employee of a leading accounting firm like Somerset.
When I read Pat Early's response, I was infuriated by his lackadaisical response. No, Mr. Early, the majority of youths coming into the workplace from college do not have drunk driving arrests attached to their sheepskins. In his comments he reveals much of why Somerset is faced with this problem when he dismisses their failure in employing this criminal as simply being "too trusting".

M Theory said...

Gary, maybe he could also be a nominee for U.S. Treasury Secretary. Why not? Sounds like he would fit right in.

WaytooSmart said...

Someset obviously didn't do their "homework". The firm has always been one to quickly jump to incorrect conclusions and this time got caught. I agrree with MissouriDemocrat and think they should cough the $380,000 up. Somerset made a really stupid decision with this guy's background to even allow him near any kind of funds, let alone let this guy be treasurer. Maybe the reason Early "blew off" the DUI charge of this guy was because maybe it is common practice in their firm??

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