Sunday, October 19, 2014

An Old Library Embezzlement Case Just Won't Fade Away

This guest post by Greg Wright, owner of Greg Wright & Associates, LLC, a certified fraud examiner, shines light on an old embezzlement case uncovered by the State Board of Accounts which involved a former employee of the Indianapolis Public Library. Greg's post is quite timely given the state agency's announcement that it will stop auditing many units of local government like library districts due to lack of state funding.

At a time when budget constraints at Indiana’s State Board of Accounts have forced it to consider discontinuing the audit of libraries, an old Marion County Public Library embezzlement case has resurfaced. My research into Juanita Lynn Hoagland started out to be just another example of a long-running embezzlement case in my upcoming talk on fraudster gender differences to be given next month in Cincinnati. The convicted fraudster, perhaps a current Indiana government employee, was tracked down as part of my research to ask her side of the story .

During the years 1978 to 1988, this library embezzlement was described as one of the largest uncovered by the SBOA. According to the audit report, the State Examiner at that time described the embezzler’s methods as “quite a masterpiece” and “very artfully done. He described the library employee as "very calculating" in the "approach to both taking the money and concealing the theft."

The Indianapolis Public Library collected monies for overdue book fines (5 cents a day), lost books, etc., from its 27 branches. These cash receipts were then forwarded to the central office where a two-part receipt was prepared by an employee. The original of the receipt was returned to the branch and a carbon copy was retained. The cash – minus the skimmed amount --was delivered to the bank and a deposit slip was used to validate the deposit amount.

Juanita Lynn Hoagland, according to a SBOA report, used a stylus to ". . . record a lower amount on the carbon, while leaving the original blank. This lower amount was used in preparing the bank deposit and the subsequent posting." "The original copy … was then removed from the receipt book and written for the proper amount. This original copy was sent to the respective branch …” According to the records, Juanita pocketed the cash difference between the original receipt and her retained copy. In addition to Juanita’s $18,900 salary, she was able to skim an additional $1,000 a week in nickels and dollar bills.

A civil judgment naming Juanita Lynn Hoagland was filed on Jan. 1, 1991 by the State of Indiana in the amount of $455,991.

It is believed that this embezzlement started at least fifteen years before the 1988 audit; but, the older records were incomplete or had been destroyed. I wanted to ask Juanita Lynn who taught her and when she first started to skim; but, she would not answer my questions. In fact, this Juanita Lynn denied being the fraudster.
Greg Wright: Have you ever used the name ‘Juanita Lynn Hoagland’?
Juanita: No
Greg Wright: Have you ever worked at the Indianapolis Public Library?
Juanita: No
Greg Wright: Is your date of birth July 18, 1953?
Juanita: No.
Juanita Lynn Hoagland was released from jail in April 1989 and appears to have changed her last name when she married on November 18, 1989. The Juanita interviewed above was using the same last name as was used on the November 18, 1989 marriage certificate. I sent this Juanita an e-mail at her government job requesting that she confirm the verbal answers she gave to my questions. She has not replied.

A copy of my file has been sent to Staci Schneider, the Indiana Attorney General’s Chief of Staff. If you include Juanita Lynn’s State of Indiana Pension Plan, she appears to have sufficient assets to repay the $455,991 judgment. Maybe the AG can claw the money back.

Greg Wright, CFE, has researched red flag and number invention differences between male and female embezzlers. He has found that female embezzlers take 50% longer to identify, and the overwhelming majority of long-term embezzlements have been committed by females.


Anonymous said...

excellent piece.

As a tax payer and voter - the AG better get that money back!

Anonymous said...

I once knew of a guy who got caught stealing from the armored car company that he was employed by. His nickname became "Quarters"