P-Card News: Indictments, Hacks and More

October 8, 2019

Purchase card, or P-Card, fraud is a risk for any organization that issues them to employees. The key is to use analytics and transaction monitoring to help prevent that fraud from happening in the first place. Here are some recent cases of fraud in the news.

Former clerk indicted on $240K theft charge

An investigation by Tennessee Comptroller’s Office, working in conjunction with Tennessee Bureau of Investigation, has resulted in the indictment of a former accounts payable clerk in the Fentress County Finance Department.

Investigators allege that the employee stole at least $239,680.99 from the county between December 2014 and December 2018. The vast majority of the theft ($237,615.99) is associated with the use of a credit card.

The employee reportedly purchased food, cigarettes, personal hygiene items, clothing, electronics, entertainment items, home items, phone cards, and prepaid Visa cards and gift cards using the Walmart credit card. None of these purchases were related to county business.

The worker covered up the misappropriation by receiving all credit card statements, issuing payments, and manipulating the county’s accounting records and budget.

The county terminated her employment in December 2018.

“This theft can be directly attributed to giving one person too much control over county funds,” said Comptroller Justin P. Wilson. “One person shouldn’t be able to issue purchase orders, make purchases, receive credit card statements, pay the bills, and maintain the accounting records without sufficient oversight.”

Overton County News

Former Georgia Hospital Security Director Indicted for Federal Fraud and Gun Charges

The former Director of Security for a Georgia hospital has been charged with stealing firearms meant for security personnel and then illegally selling those guns for profit. He faces 15 charges.

Court was told that between 2016 and June of 2018, while employed as the Director of Security for the hospital, the man allegedly used his position to fraudulently order numerous firearms from a local federal firearms dealer and then caused the resulting invoices to be submitted to the hospital for payment.

The hospital paid the invoices, but never received the firearms.  In all, the man diverted approximately 93 firearms to his own use, including selling them for profit.

He also misused a hospital issued purchase card for personal gain.  Even though the purchase card was solely for gas purchases and maintenance of hospital vehicles, he allegedly charged approximately $45,000 for repairs and services performed on his personal vehicles.

The man has been indicted on 15 counts of mail fraud, one count of dealing firearms without a license, and three counts of unlawfully selling firearms to out of state residents.


Purchase cards for American troops likely hacked, military says

American troops may have been among the victims of hackers who stole information from more than one million U.S. and South Korean credit cards and listed it for sale on the dark web over the past few months, the military said.

The thefts targeted unspecified business and financial entities in South Korea and included information on at least 38,000 U.S.-issued payment cards, according to an alert distributed by the Eighth Army via its Facebook page.

An unnamed credit union that provides services at U.S. Air Force bases in South Korea was among the potentially compromised organizations, it said.

The stolen information was listed on the dark web since the end of May, according to the notice, which was based on information from the Korea Office of the Major Cybercrime Unit, U.S. Army Criminal Investigation Command.


Former supervisor poured more than $4,000 in gas for himself

Former Augusta County supervisor Terry Kelley Jr. pleaded guilty to five counts of credit card theft, fraud and forgery.

He will serve a total of three months. Kelley, 55, faced 22 counts related to credit card theft, fraud and forgery following an Augusta County Sheriff’s Office investigation into the misuse of a county fire department fleet fuel credit card.

Source: W7 News

MTSU Athletic Dept. purchases questioned

The Tennessee Comptroller’s Office, working in close cooperation with a state university, has completed an investigation of questionable activity within an athletic department.

Investigators found the athletic department staff used the university’s purchase credit with a sports and fitness company to obtain at least $34,084 in athletic shoes and sports apparel for friends and family.

The athletic department neither monitored nor tracked purchase credit orders to determine if they were made in accordance with the contract terms, or the university’s acceptable use practices.

The results of this investigation have been communicated with Office of the District Attorney General of the 16th Judicial District.

University officials have indicated they are establishing new practices and procedures to correct these issues.

Overton County News

A P-Card monitoring solution can help protect your P-Card program from fraud, misuse and abuse like in these stories. Check out Alessa’s guide to P-Card analytics to learn how.

About Anu Sood

Anu Sood (LinkedIn | Twitter) is the Director Marketing at CaseWare RCM and is responsible for the company’s global marketing strategy. She has over 20 years of experience in product development, product management, product marketing, corporate communications, demand generation, content marketing and strategic marketing in high-tech industries.

Try Alessa