Don't be afraid to see what you see

By Denise McClure

The Daily Record Newswire

Whether it starts out fueled by need or by greed, embezzlers end up indulging in a lavish lifestyle. Easy money is just too tempting.

Too many bright, hard working, trusted people have succumbed to the temptation of easy money made possible (and probable) by lax or non-existent oversight.

Consider the case of attorney Woodrow W. Pringle, III, a quiet, respected, trusted court-appointed conservator who practiced law in his hometown of Gulfport, Mississippi, for almost 30 years. Without a blemish on his record, there was no reason to question his integrity. Or was there?

In December 2010 he sent an e-mail message to a Chancery Clerk in Gulfport that read:

"I want to apologize for abusing your trust. I abused the trust of my family, friends, judges and so many others. I was able to do this for so long because people trusted me and believed in me. I am truly sorry... ."

The message was a suicide note. Pringle was expressing sorrow for embezzling $2.4 million from accounts he managed for vulnerable minors and adults.

Eric Fromm, social psychologist, must have been referring to embezzlers like Pringle when he wrote, "Greed is a bottomless pit which exhausts the person in an endless effort to satisfy the need without ever reaching satisfaction. "

Once Pringle started stealing, he couldn't stop. It was too easy. His bottomless pit of greed exhausted him to the point of suicide.

Pringle drained the bank accounts of seven people whose assets were entrusted to him. One victim's account dropped from over $305,000 in 2006 to $86.46 at the time of Pringle's death four years later.

The county is being sued. The Chancery Clerk is being sued. Pringle's widow is being sued.

Recovery of assets will be minimal and Pringle had no malpractice coverage, so the victims are likely to recover pennies on the dollar, if that.

How did Pringle's misdeeds go undiscovered for years? Poor controls, no oversight, blinders to signs that should have prompted a review.

First, Pringle did not secure a bond in 2003 when he was first appointed county administrator. If a bond is a requirement for serving as court administrator, Pringle should have been held accountable by submitting proof to the court.

Second, for at least one account Pringle managed, the Chancery Clerk signed checks payable to Pringle with no more than a verbal assurance that the funds were for legitimate expenses. The trust, but verify standard is to never, ever, ever sign a check without reviewing invoices or other supporting documents.

Third, the court allegedly failed to enforce a rule that annual accountings be filed for each guardianship, conservatorship and estate Pringle managed. What is the value of a rule that is not enforced? In this case, it's a lawsuit -- or two or three.

Finally, disturbing red flags about Pringle were apparent at least three years before his theft was discovered - unpaid income taxes on the accounts he managed, assets sold due to delinquent property taxes, a minor's account reduced to zero when he came of age, and lack of response to requests for information from families of vulnerable minors and adults.

Any one of these issues should have startled someone into reviewing Pringle's accounts. Ronald Reagan was referring to the value of oversight when he said, "[D]on't be afraid to see what you see."

Shortly before Pringle committed suicide, an attorney hired by one of the victims badgered Pringle into submitting a report. It didn't take long for someone to realize the report didn't look right.

One of the first checks Pringle wrote to himself was for $19,000 more than six years before his suicide. Over the next three years he continued to write checks to himself from the account, including one for $92,000! These misdeeds, and probably many others, would have been glaringly obvious had anyone glanced at bank records.

Lax controls, misplaced trust, and blinders inhibited the court from fulfilling its duty to hold Pringle accountable. Seven vulnerable adults and minors are paying the price. Taxpayers will pay a price too, in legal defense fees for the county and possible judgments from lawsuits brought by victims.

Pringle, like so many embezzlers, was considered trustworthy until he was caught. He was respected for thirty years before he admitted to his greed and misdeeds by ending his life. It would have been -- and should have been -- detected years earlier.

Trust, but verify. And don't be afraid to see what you see.

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Denise McClure, CPA, CFE is a forensic accountant and the owner of Averti Fraud Solutions, LLC in Boise. She is a frequent author, speaker and trainer on preventing and deterring embezzlement and fraud. Her ideas on fraud risk management have helped organizations improve efficiency, profitability and security. For more information, visit www.AvertiFraudSolutions.com or e-mail Denise@AvertiFraudSolutions.com.

Published: Wed, May 9, 2012

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