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Audit Services

AUDIT SERVICES REPORT UNIVERSITY OF LOUISVILLE


College Of Business Equine Industry Program August 19, 2011 To: R. Charles Moyer, Dean

cc: David F. Barker Timothy Capps Jeffrey Jewell Angela Koshewa James R. Ramsey Shirley Willihnganz

Audit Team Cheri J. Jones Gretchen Hyde Jeanne Kennedy Thomas N. Thompson

University of Louisville 425 W. Lee St Louisville, KY 40208 Ph: 502.852.8305 F: 502.852.0665 W: louisville.edu

College Of Business Equine Industry Program

EXECUTIVE SUMMARY Audit Services has performed an investigation of the College of Business (COB) Equine Industry Program (EIP) following a report of potentially fraudulent activity. The scope of the investigation included financial transactions that related to the program between January 1, 2007 and February 28, 2011. In addition, all transactions affecting a checking account used by the Equine Riding and Racing Club (ERRC), a recognized student organization, were reviewed for the same period. Based on the transactions reviewed, the following losses were identified. Equine Riding and Racing Club PNC Checking Account Procurement Card Transactions Accounts Payable - Requisitions Accounts Payable - Wire Transfers Employee Travel and Other Reimbursements Egencia Travel Revenue - Cash and Checks Total loss In addition, the following transactions were identified: Questionable ERRC PayPal transactions $23,839.60 ERRC transactions that did not clear because of insufficient funds 14,225.01 Questionable procurement card transactions 10,031.60 ERRC expenses paid on the procurement card 12,190.43 ERRC expenses paid by university accounts payable 10,542.56 ERRC expenses paid by university requests for disbursement 815.99 Recovered or seized electronic equipment purchases 11,588.00 Unpaid requisition 5,000.00 Total questionable, unauthorized, or unpaid $88,233.19 In total, the attempted fraud against the University of Louisville and the Equine Industry Program was $551,869.54. In addition, non-compliance with university travel policy resulted in overpayments to faculty and staff for use of personal vehicles in the amount of $2,617.48 (not included above). The following non-compliant practices were identified: Payroll Students and temporary employees working for the program were paid through accounts payable and the ERRC checking account instead of being properly established on the payroll system. Contracts Agreements between the program and suppliers were signed by employees without signature authority. $190,292.87 162,007.74 79,713.51 16,000.00 5,052.83 10,119.40 450.00 $463,636.35

College Of Business Equine Industry Program

PayPal PayPal accounts were established to purportedly transact university business in violation of policy prohibiting the practice. Reconciliations General ledger, procurement card, cash, and event reconciliations were not performed.

Compliance with existing university policy and business procedures would have resulted in timely detection and reduced loss to the program. It is managements responsibility to ensure all faculty and staff are aware of and comply with these policies. In the Equine Industry Program this responsibility was relinquished to the Sr. Program Coordinator, Alisha Ward, who took advantage of this inattention to perpetrate the fraud. Early successful attempts to process the fraudulent transactions resulted in significant escalation beginning in fiscal 2009-2010 as shown in the graph below. Approximately 81% of the fraud occurred in fiscal 2009-2010 and 2010-2011.

To address policy non-compliance and other control deficiencies that facilitated the fraud and allowed the situation to remain undetected, the College of Business will implement the following actions. 1. The ERRC charter has been updated to require all officers to be students. Student members will be responsible for all aspects of managing club finances, with appropriate mentoring from faculty advisors. 2

College Of Business Equine Industry Program

2. The college has reduced the number of procurement cards available. A new college financial controls policy contains detailed procedures on when and how the cards can be used. The Unit Business Manager (UBM) will independently monitor purchases for compliance with established policy. 3. The colleges financial control policy requires deans office staff to review all purchasing documentation before submission for processing. The review will help identify noncompliant transactions before processing. 4. All requisitions must be approved in writing prior to being initiated. Requisitions will only be approved in the purchasing system if there is written approval on file with the UBM. The colleges financial controls policy requires all services and goods to be purchased through the eProcurement system when possible. 5. The colleges financial controls policy now requires all travel documents to be approved by the deans office. Egencia will be used when possible. The policy reiterates that travel cannot be paid using the procurement card. Effected faculty and staff will reimburse the college for any travel overpayments. 6. All cash and checks must be routed through the deans office and accompanied by a transmittal form. The college is working with the controllers office to ensure compliance with credit card industry standards. The credit card machine has been removed from EIP. 7. Enhanced review of all financial transactions now required by the colleges financial controls policy will help prevent or detect future attempts to circumvent existing policy 8. All financial transactions, including contracts must be reviewed and approved by the deans office prior to being routed for processing. The colleges new financial controls policy requires all financial transactions to be reviewed by deans office staff, which will help identify violations of existing policy. 9. The college has made arrangements with the controllers office to provide training on accounts payable requirements, including personal service contracts. If necessary, training by the purchasing department will also be obtained. 10. The college will comply with existing policy over PayPal accounts. The colleges new financial controls policy requires all financial transactions to be reviewed by deans office staff, which will help identify violations of existing policy. 11. General ledger, deposit to event records, and cash receipts will be reconciled in a timely manner by the colleges UBM or other deans office staff under the direction of the UBM. Procurement card reconciliations will be reviewed by the UBM. The following report presents the details of this investigation.

College Of Business Equine Industry Program

INVESTIGATION REPORT
Background The Equine Industry Program offers the only Association to Advance Collegiate Schools of Business (AACSB) accredited business degree in the world with an equine major. It includes the only four-year equine degree program that focuses exclusively on the business of horses. In 2011, the program averaged 68 students. It launched an on-line certificate program in summer 2011. Created in 1987, EIP is funded in part by a portion of the excise tax levied on pari-mutuel wagering at tracks in Kentucky. In 2011, $400,000 of the excise tax revenue was received by EIP as an appropriation from the state. An additional $40,000 (the Equine Trust) is received annually through a memorandum of understanding issued by the Council on Postsecondary Education on behalf of the state. The memorandum of understanding restricts the use of the $40,000 to capital projects. According to the University of Louisville budget approved by the Board of Trustees, the program had the following approved budgets for the period under investigation (excluding several small gifts). EIP is one of the few programs with state funding that is allowed to carryover a balance from previous years. Equine Industry Program Revenue Budgets Program 2007 2008 2009 Equine Education Improvement $500,000 $500,000 $500,000 Equine Steward Accreditation 4,000 25,000 12,000 Equine Special Program 5,000 10,000 10,000 International Center Equine Events 5,000 5,000 25,000 KY Equine Industry Pari-Mutuel 700,000 500,000 500,000 Equine Trust Program 40,000 40,000 40,000
Source: Operating Budget Book for years 2006-2007, 2007-2008, 2008-2009, 2009-2010, and 2010-2011

2010 $500,000 25,000 5,000 20,000 500,000 40,000

2011 $0* 25,000 5,000 20,000 400,000 40,000

* - State appropriations were rolled up into the university appropriation budget amount beginning in fiscal 2010-2011. The amount allocated to EIP is now reflected in the expense budget, consistent with all other programs funded by state appropriations.

Equine Industry Program Expense Budgets Program 2007 2008 2009 Equine Education Improvement $500,000 $589,074 $614,453 Equine Steward Accreditation 3,585 24,585 12,000 Equine Special Program 5,000 10,000 10,000 International Center Equine Events 2,942 2,942 25,000 KY Equine Industry Pari-Mutuel 700,000 500,000 500,000 Equine Trust Program 40,000 40,000 40,000
Source: Operating Budget Book for years 2006-2007, 2007-2008, 2008-2009, 2009-2010, and 2010-2011

2010 2011 $613,824 $633,635 25,000 25,000 5,000 5,000 20,000 20,000 500,000 400,000 40,000 40,000

The programs funding EIP did not develop budget or cash deficits until fiscal 2010-2011, after the fraud was discovered. However, timely budget reconciliations would have alerted EIP and COB 4

College Of Business Equine Industry Program

administration to missing funds. Without reconciliation, administration was unaware of nearly $500,000 in missing funds, the bulk of which occurred in fiscal 2009-2010 and 2010-2011. In 2007, an audit of EIP was performed on financial activity that occurred between July 1, 2005 and December 31, 2006. In the routine audit follow-up process, EIP and COB administration selfreported all issues as corrected. However, many of the control weaknesses identified during the prior audit are recurring in this report. The recurring issues include weaknesses in recording and processing revenue receipts, weaknesses in checking account controls, noncompliant and unallowable procurement card activity, noncompliant account payable requisition practices, violations of employee travel and reimbursement policies, and failure to reconcile general ledger activity. In February 2011, the controllers office reported that a vendor had received an IRS form 1099 for $40,000 paid by the university. The vendor informed the controllers office staff that the payment was for property renovation performed at the home of a university employee, not for work done for the university. The Department of Public Safety (DPS) was notified and subsequently interviewed the employee, Alisha Ward, a Sr. Program Coordinator who started working for EIP in January 2007. She confessed to taking approximately $150,000 from the university and using the money to renovate her new home, in addition to other purchases. Her employment was immediately terminated and Audit Services began a full scope review of the financial transactions originated by Ms. Ward.

ISSUES
1. Equine Riding and Racing Club (Recurring issue from previous audit report dated April 11, 2007) EIP students have the opportunity to participate in the ERRC, a recognized student organization established through the university. It is organized in two divisions, a riding club which provides students with the opportunity to participate in hunt-seat and western horse shows, and the racing club which exposes students to the horse racing industry through field trips and guest speakers. In 2010 there were approximately 66 student members of the ERRC. The club is funded by EIP, student fees, and outside donations. The university permits student organizations to manage money by establishing an agency account through the university or through commercial bank accounts. The ERRC elected to establish a commercial account at PNC Bank. The owner of the PNC Bank account was the EIP director, who was also the only person with signature authority on the account. In addition, although university guidelines require all officers of student clubs to be students, the treasurer of the ERRC was Ms. Ward. As treasurer, she had control over the bank account and the clubs finances. The complete control Ms. Ward exercised over the ERRC bank account allowed her to divert funds intended for the university, obtain additional personal income, and make personal purchases. This was done by depositing checks payable to the equine program into the ERRC account, falsifying supporting documents including bank statements, and forging the 5

College Of Business Equine Industry Program directors signature. The fraudulent activity began in October 2007. During the period of our review, $293,094.90 was deposited into the checking account and $292,408.32 was disbursed. The balance on the bank statement as of February 28, 2011, was $1,526.76. EIP agreed to support the club through an annual payment of between $10,000 and $15,000, as needed. The program actually provided $130,097.96, of which $120,097.96 was obtained through false pretenses or forged documents. (See Appendix A for a list of all university funds deposited into the ERRC checking account.) Ms. Ward also diverted $117,848.80 meant for EIP in the form of donations and student payments for the 2011 England trip. (See Appendix B) As of June 17, 2011, identified fraudulent payments from the account totaled $190,292.87. These payments were for personal expenses and to obtain cash. (See Appendix C for list of all fraudulent ERRC checking account payments.) The specific fraudulent transactions are as follows: One hundred thirty-two (132) fraudulent checks made payable to Ms. Ward totaling $150,740.54. Three checks paid to vendors for Ms. Wards personal expenses totaling $6,494.06, including one car repair bill of $5,298.38. Two hundred sixty-nine (269) fraudulent PayPal payments totaling $33,058.27. As of June 17, 2011, thirty-two (32) PayPal payments remained totaling $23,839.60 for which the purpose cannot be identified. There were several instances of attempted fraud that failed due to insufficient funds in the bank account: six (6) checks payable to Ms. Ward totaling $8,750.00 and eighteen (18) PayPal transactions for personal items totaling $5,475.01. In three of these PayPal transactions totaling $2,500.00, Audit Services was unable to verify that the expense was personal. In some instances, when the PayPal transactions were rejected, Ms. Ward was able to get them paid through a university procurement card.

Ms. Ward used a variety of methods to extract money from the checking account including: Forging the directors signature on checks made payable to herself or vendors providing personal goods or services. As the treasurer of the club, she kept the check register and blank check stock. Falsifying the supporting documentation for the payments and creating altered cleared check copies purporting to be printed from the bank. Altering the payee of signed checks to include her name, or writing the payees name illegibly.

College Of Business Equine Industry Program

Creating a PayPal account tied to the ERRC bank account and paying for personal expenses, including clothing, home furnishings, personal attorney fees, and a motorcycle. Altering bank statements kept on file from October 2007 through September 2009 removing fraudulent transactions. There is no evidence that these statements were ever reviewed and that is likely why altering stopped subsequent to September 2009.

There was a significant lack of internal controls that allowed the fraud to occur. Specifically, no one other than Ms. Ward reviewed bank statements or oversaw bank account transactions. There was no review of any bank activity by a second party. Furthermore, the bank account was not closed when the new account was opened by the students in August 2010 allowing Ms. Ward to continue the scheme until her termination in February 2011. The students did not have signature authority or knowledge of their finances. As of June 2011, the new bank account used by the club requires dual signatures by two students. However, one of the club advisors, an employee of the university, also has signature authority on the account, is receiving the bank statements, and has control over the blank check stock. Action Plan: The bank account used by Ms. Ward has been closed and a new account opened at another financial institution. No university faculty or staff will have signature authority on the account. All checks written will require two signatures of club officers and the students will be responsible for maintaining the account. Faculty advisors will provide appropriate mentoring and oversight. The club charter has been updated and all officers will be students as required by university policy. Target Implementation Date: Implemented 2. Procurement Card (Recurring issue from previous audit report dated April 11, 2007) The universitys procurement card program is an opportunity for departments to gain efficiency by using a university credit card for small dollar transactions. The university has implemented procurement card policies to help deter fraud. Cardholders are expected to follow the established university policy to minimize risk. The equine cardholder was the EIP director, who was not in compliance with all documented procurement card policies. The failure to comply with these policies was integral to Ms. Wards ability to perpetrate the scheme. Procurement card transactions are to be reconciled comparing a transaction log, the original receipts, and the statement received from PNC Bank. Further, upon completion of the reconciliation, a review of all documents (bank statement, transaction summary log, receipts) is required to verify the purchases were appropriate and for the benefit of the program or university. This review must be documented with a signature and the date of the review. In the EIP the transactions were sporadically reconciled and reviewed. The reconciliation review was not effective as fraudulent transactions were not documented and verified as legitimate before the reconciliations were signed by a reviewer. In addition, the reconciliations were prepared by Ms. Ward who was one of the primary users of the card. This lack of segregation of duties and review provided Ms. Ward the opportunity to commit the fraud. 7

College Of Business Equine Industry Program

Based on our investigation of 879 transactions totaling $310,122.24 from January 2007 through February 2011, it was substantiated that Ms. Ward fraudulently misused the procurement card for a total of $162,007.74 (see Appendix D). The first instance of fraud was a transaction on May 22, 2007. Sixty-six (66) transactions totaling $133,189.90 were fictitious transactions paid to fake PayPal accounts established by Ms. Ward in the names of legitimate university vendors such as Blood Horse, Ranching for Profit, and Rea Quarter Horses. One hundred one (101) transactions totaling $28,817.84 were personal purchases such as clothing, books, electronics, cell phone and service, and home improvement items. The cell phone was in the name of an Equine faculty member. Fifty-eight (58) transactions totaling $10,031.60 lacked supporting documentation and could not be verified as legitimate university expenses. In addition, many legitimate purchases were made that violated university policy. These purchases included: Restrictions to the procurement card program state that a card cannot be used for certain types of transactions. There were 29 violations of these restrictions totaling $5,586.08 including the purchase of alcoholic beverages ($812.01), donations ($1,583.89), employee lodging ($432.60), and payments to an individual ($2,757.58). University purchases are exempt from sales tax; however, there were multiple transactions where Kentucky state sales tax was paid with no evidence of efforts to obtain a refund.

Forty-seven transactions totaling $12,190.43 were charged to the card for purchases related the ERRC and were not reimbursed to the university. There were sixteen additional instances of ERRC purchases paid by the university; however these purchases were reimbursed by the club. There should be a clear separation of non-university transactions. Such transactions should be avoided whenever possible. If such a transaction occurs, support should be adequate and reimbursement timely. Proper review of procurement card transactions would have identified nonuniversity expenses. In addition, there were several procurement card transactions that indicate poor management decisions by the director: Replacing an excessive number of broken items such as printers, fax machine, coffee pot, heater, clock, cell phones, hole-punch, desk organizer, and speakers. Purchasing multiple copies of a book authored by a faculty member in lieu of honorarium. Paying the hotel charges and airfare for a student worker in lieu of providing her scholarship money to attend a conference. Procuring Breeders Cup tickets on the request of a former Galbreath Award winner, who agreed to reimburse the program. Reimbursement was not received. Adding a twenty percent tip on restaurant bills that already included the gratuity. 8

College Of Business Equine Industry Program

Missing early registration deadlines resulting in increased registration fees. Paying for questionable meals such as a dinner during a day trip when the other attendee did not eat, dinners charged with the directors brother listed as the attendee, and expensive dinners that included spouses and alcohol. Purchasing a printer for the directors home office, and ink on multiple occasions. Donating $500.00 in the memory of a close friend. Paying speakers travel on the procurement card without receiving supporting documentation.

Action Plan: The EIP procurement card has been closed and a request for a new card declined by purchasing. The College of Business has developed a financial control policy that all departments must use to process financial transactions. In the policy, all academic suites are permitted to maintain one procurement card, with the deans office determining who will be the card holder and the approvers. Additional cards will be held by the deans office and certain other departments. The colleges UBM will independently monitor purchases and compliance with established policy, as required by the Provosts memo from March 2011. Target Implementation Date: Implemented 3. Wire Transfers and Requests for Disbursement Request for Disbursement forms (RFDs) are used by departments to authorize Accounting Operations to pay vendors when a purchase order does not provide value to the transaction and a procurement card is not used. Examples of when an RFD is appropriate include payments for awards, honorariums, and guest speakers. In EIP, there is a two-level approval process; first, the RFD form is signed by the EIP director and then by the COB dean's office. There were 80 RFDs processed from January 2007 through February 2011 totaling $245,824.82. There were six instances of fraud; three were used for funding the ERRC checking account described in issue #1 above. The remaining fraudulent transactions are described as follows: Two wire transfers to a Dutch bank were used as a down payment for a second home in Trigg County totaling $16,000.00. The EIP director's name was forged on the RFD and subsequently approved by the COB UBM. The documentation was falsified to make it appear that the payments were for a student trip to England. (See Appendix E.) An event speaker submitted someone elses expenses for reimbursement purposes. The speaker was reimbursed $236.34 and there is no evidence that the rightful owner of the expenses was ever reimbursed. This should have been detected during the review process by EIP and the COB deans office.

College Of Business Equine Industry Program

EIP had several university policy violations with regards to RFDs. Most of these violations could have been prevented if EIP critically reviewed documentation before authorizing, and established appropriate segregation of duties, that included independent general ledger reconciliations. These violations are: Purchase of a $250.00 gift card given to a retiring director of the American Youth Horse Council. The EIP director is the treasurer of this organization. The documentation supporting this purchase was falsified so that it would be considered allowable. A Steward Continuing Education instructor was overpaid $615.97. A thorough review of the RFD and supporting documentation by the EIP/COB approvers would have identified the error. A 2010 Equine Summit speaker submitted and received airfare travel reimbursement of $341.90 before the event occurred. EIP's unwritten policy is to reimburse student's travel for ERRC riding events at the regional, zone, or finals levels. There were two instances of travel reimbursements to students that violated this practice: one for a Western Intercollegiate Horse Show Association show at Midway, KY for $121.00 and one for $162.64 for trips to the practice facility. Furthermore, EIP should not pay for ERRC expenses. In total, there were three club payments that were not reimbursed totaling $815.99. Three payments totaling $936.48 were delayed between 60 and 90 days in violation of state law. State law requires the university to pay all vendors within 30 days. Two 2008 Equine Summit speakers were paid from a gift account that was designated for equine scholarships. The total amount of these payments was $501.14.

Action Plan: The colleges financial control policy document contains procedures for the deans office to review all purchasing documentation before submission to the appropriate office for processing. Purchasing, the controllers office, and other processing departments are being asked to address any questions to the deans office staff, namely the UBM. Target Implementation Date: Implemented 4. Accounts Payable - Requisitions (Recurring issue from previous audit reports dated July 30, 1997 and April 11, 2007) Between January 1, 2007 and February 28, 2011 there were 107 requisitions originated by EIP (excluding requisitions supporting payments for personal service contracts). Most of the requisitions were entered by Ms. Ward and all were electronically approved by the COB UBM (who was hired January 4, 2010) or assistant dean (who retired in January 2010). Audit Services tested all of the requisitions to determine if the purchases were legitimate, for the purpose described on the purchasing system, and were appropriately supported. In addition, with the assistance of the 10

College Of Business Equine Industry Program

DPS, some vendors were interviewed to determine the purpose of certain transactions. It was determined that 11 of the requisitions were entirely fraudulent and an additional 3 requisitions were partially fraudulent. Fraudulent requisitions totaled $96,301.51 and involved 4 vendors: Apple Computers, Inc., Kutcha Enterprises, Zachary Myatt, and the ERRC. Electronic devices seized or recovered by the DPS totaled $11,588.00 and an invoice for $5,000.00 was not paid by the university as it was submitted by Ms. Ward after the fraud was identified. Total loss to the university was $79,713.51. Refer to Appendix F for details of the fraudulent requisitions. The university also paid $10,542.56 to vendors to pay for services and goods purchased for the benefit of the ERRC. Summary of Requisition Purchases Program Name Total Amount Legitimate Amount (UofL) $107,740.39 31,701.91 7,402.30 81,465.33 8,488.94 $236,798.87 ERRC Attempted Amount Fraudulent paid by Transactions UofL $ 3,724.25 $239.00 0 0 6,818.31 0 $10,542.56 0 2,722.00 5,000.00 8,627.00 $16,588.00 Fraudulent Amount

Equine Education Improvement Equine Steward Accreditation International Ctr Equine Event Equine Industry PariMutuel Equine Trust Program Total

$114,668.34 31,701.91 10,363.30 168,381.60 18,527.79 $343,642.94

$ 2,964.70 0 239.00 75,097.96 1,411.85 $79,713.51

The university requires all purchases to be supported by original invoices from suppliers. In most instances suppliers should submit these documents to the Accounting Operations unit in the controllers office for payment. This is intended to ensure there is appropriate separation of duties by removing the person initiating the requisition and receiving goods from handling invoices. Sixty-nine percent (69%) of the supplier invoices (excluding the fraudulent invoices) were submitted directly to EIP, violating the separation of duties control. In addition, invoices from Rea Quarter Horses for coaching services were altered to reflect the rental of trailers or purchase of horse feed. One of the forged invoices was apparently signed by the EIP director. Discussion with the director indicated that he was aware of the altered documents, but allowed it in order for the purchase to be paid. Ms. Ward blamed university red-tape and unreasonable expectations for the need to alter invoices. In reality, the provision of coaching services represented a purchase that would require the initiation of a personal service contract which requires the involvement of purchasing department staff. The actual expense was for the benefit of ERRC and should not have been paid by EIP. The assistant dean and the UBM were assigned approval roles in the PeopleSoft workflow process for requisitions. The EIP director was also assigned this role. All of the requisitions processed during the period were approved in PeopleSoft by the assistant dean or the UBM. This includes the 11

College Of Business Equine Industry Program

fraudulent requisitions and the requisitions for goods or services purchased by the ERRC. In addition, 124 of the purchases (64%) were entered in PeopleSoft after the fact (more than one purchase was frequently entered into one requisition). In other words, the invoice was in the possession of EIP before the requisition was entered into the system, rendering the requisition control meaningless. In reality, the workflow approval system, as implemented in the COB, was a process of approving the allocation of expenses to specific programs and general ledger account codes based on the existence of sufficient budget amounts. The assistant dean (reportedly) and UBM never questioned the purpose of a requisition, never reviewed supporting documentation, and never identified the existence of the after the fact requisitions. Expenses were not reviewed or compared to invoices by anyone other than Ms. Ward. Reconciliations were not performed and financial records not reviewed by anyone other than Ms. Ward. It is probable that the fraud would have been identified sooner if the EIP director or another individual with knowledge of the operations of the department had critically reviewed and approved invoices and requisitions. Alternately, financial reconciliation may have identified the inappropriate invoices, although Ms. Ward took great care to keep forged documentation in the EIP offices. For example, according to submitted documentation, $40,000 was spent for the construction of horse jumps at a horse show arena. In reality, the money was spent for remodeling her home. A critical review of the invoice prior to payment by a knowledgeable person should have resulted in questions such as Why is the department paying for work at an arena that the university does not own? Where are these jumps being stored? These questions would have identified the fraud, without relying on the honesty of the vendor. The university processed approximately 140 invoices from 43 vendors (included fraudulent invoices). Of these invoices, the EIP director approved 62, including 4 invoices submitted for purchases made by the ERRC, and 1forged invoice. Other EIP staff approved 2 additional invoices. None of the fraudulent transactions were signed by the EIP director. Action Plan: The person in the role of approving requisitions will review any available supporting documentation before approving transactions. Before placing an order or entering a requisition the individual must receive prior written approval from their supervisor. The UBM will not approve any PeopleSoft requisition unless she has received documentation. Managers should not allow staff to prepare supplier invoices. This practice is almost certain to be a symptom of a fraud or a circumvention of valid university policy and procedures. While policies and procedures may appear to be red-tape to units, there are valid controls or legal requirements that require compliance with a policy. The colleges financial controls policy now requires all services and goods to be purchased using the Cardmart (eProcurement) system when possible. This will reduce the occurrence of after the fact requisitions. Target Implementation Date: Implemented

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College Of Business Equine Industry Program

5. Employee Travel and Reimbursements (Recurring issue from previous audit reports dated July 30, 1997 and April 11, 2007) The universitys travel policy governs the type and amount of reimbursement employees can be paid when traveling on university business. The policy allows the reimbursement of actual expenses for hotel, rental cars, tips, and incidental expenses. In addition, a meal allowance is available when traveling over night and the IRS mileage allowance is available when taking a personal vehicle. Ms. Ward was responsible for making travel arrangements for faculty, staff, and visitors, preparing travel and expense reimbursement requests, and submitting the documentation to Accounting Operations for payment and processing. There was no oversight of her activities, although all expense reimbursements were signed by the appropriate individuals. Airline and hotels were booked through the universitys travel agency, Egencia which direct bills the university. To assist in reconciliation, the name of the traveler is included in the transaction description on the general ledger. During the period under investigation, Ms. Ward submitted 10 personal reimbursement requests in the amount of $7,059.29. The reimbursements requests were approved by the EIP director and the COB assistant dean or UBM. Of this amount $5,052.83 (see Appendix G) was for unauthorized, non-existent, duplicate trips, or reimbursement for personal expenses, including $90 for tickets to the Rolex Equestrian Games in Lexington. In addition, $10,119.40 (see Appendix H) in personal travel expenses (airline tickets and hotel rooms) was paid through Egencia, including air fare and hotel rooms paid for friends. Ms. Ward received a total of $15,172.23 in fraudulent travel and personal expense reimbursement. The business travel reimbursement for the EIP director was also inflated by department practices. University policy allows travelers to request reimbursement for actual miles put on personal vehicles. Instead of actual miles, the EIP director routinely claimed mileage from his university office to the location of the event or meeting, usually Lexington or Frankfort. Mileage was routinely inflated because the director normally traveled to and from his home in Pleasureville, Kentucky, which is significantly closer to Lexington and Frankfort than Louisville. The amount overpaid was estimated using Google maps and the general location of the meeting place when known, the times of the meetings as reported on the expense report documentation, and through discussion with the director. Approximately $2,180.29 was overpaid. It does not appear that other faculty or staff members were overpaid significant amounts. Action Plan: Any faculty and staff traveling on university business should be familiar with university travel policies. Pocket guides are available on the controllers office web site. It is preferable that faculty and staff prepare their own travel or expense reimbursement requests. Regardless of who prepares the reports, faculty and staff are accountable for the reimbursements received. The colleges financial controls policy now requires all travel documents to be approved by the deans office. Egencia will be used when possible. The policy reiterates that travel cannot be paid using the procurement card. Target Implementation Date: Implemented 13

College Of Business Equine Industry Program

6. Cash Receipts and Revenue (Recurring issue from previous audit reports dated April 11, 2007 and July 30, 1997) EIP receives cash and check receipts for Racing Officials Accreditation Programs (ROAP), biannual Kentucky Equine Summits, conferences, exams, DVDs, state appropriations, and contributions. The Program Coordinator Senior, receives and maintains a log of the receipts for most of the ROAP and Summits as part of the registration listing. However, this log is not used to reconcile to the amount of receipts recorded to the general ledger. In addition, a control log is not maintained to record all other cash and checks received, including the date received, payor, check date, and amount. Therefore there is no mechanism for establishing accountability and verifying accuracy of the revenues. A central receipt log should be kept to record all cash and checks when received. All other receipts were received by Ms. Ward. She would combine these and the ROAP and Summit receipts and prepare and make the deposit. Further, there was no evidence that any reconciliation of general ledger transactions was being performed. This lack of separation of duties and lack of reconciliation increases the risk of undetected theft. Two money order payments totaling $450.00 for a ROAP registration fee were confirmed as being deposited in Ms. Wards personal checking account. Separation of duties should be increased by involving multiple personnel in the process of receiving, logging, depositing, and reconciling revenues. Because of the weak cash receipt controls, Audit was unable to account for $12,113.00 in other receipts. It is unknown if these receipts are included in the revenues recorded on the general ledger for EIP, if they were mis-posted into another university program, or if they were taken by Ms. Ward. Further, testing revealed that deposits were not always made at the Bursars Office within 3 business days in compliance with university policy. It was also noted that credit card information was frequently included in registration files which leaves the cardholder susceptible to credit card fraud. Action Plan: A log of all receipts should be maintained and segregation of duties should be implemented by using multiple employees in the process of receiving, logging, depositing, and reconciling revenues. All checks should be immediately stamped with the endorsement for deposit only and deposited with the Bursars Office within 3 business days. Credit card information should not be maintained. Reconciliations of the general ledger, deposits, and event logs should be prepared and reviewed. The college has adopted a policy that all cash and checks must be routed through the deans office and be accompanied by a transmittal. The college is working with the controllers office to ensure compliance with PCI-DSS requirements over credit card receipts. The credit card machine has been removed from EIP. Target Implementation Date: Implemented 7. Employment of Students outside the Payroll System During the testing of the ERRC checking account, the procurement card, and payments made through accounts payable, payments to two students and one temporary employee were identified. The support for the payments included time sheets and descriptions of work performed during various programs sponsored by the EIP. The ERRC checking account 14

College Of Business Equine Industry Program

included 24 payments to students. One student was paid 23 times for $2,726.99 for developing and maintaining a Stewards/Judges database that captured attendees of continuing education, test results, and other information. According to the EIP director, this student worked in exchange for participation on a trip to England taken by students in 2009. The other student was given a one-time payment of $3,500.00 for creating an alumni database. Similarly, a temporary employee was paid five times between August and December 2010 through accounts payable and nine times between March and July 2010 on the procurement card. The documentation shows this former student worked on the Stewards & Judges Program, provided transcription services, and database design. Such services do not qualify the individual as an independent contractor; thus, she should have been paid through payroll as a temporary employee. In all three instances, the individuals should have been paid through payroll because they met the IRS definition as employees. A worker is considered an employee of the university when the university can control what will be done and how it will be done. EIP bypassed university policy in order to expedite payments. As a result federal and state taxes were not paid as required by law. Action Plan: The College of Business had centralized the employment of students through the deans office. The employment of students outside the payroll system was a violation of college policy. Enhanced review of all financial transactions now required by the colleges financial controls policy will help prevent or detect future attempts to circumvent existing policy. Target Implementation Date: Implemented 8. Contract Signature Authority State law requires contracts entered into by the university be authorized by the Board of Trustees. The Board of Trustees has delegated contract signature authority to specific university administrators, such as the Provost, President, or Purchasing. Five contracts were identified that were inappropriately signed by the EIP director, three contracts expending university funds, and two contracts with the Council of Post-secondary Education. The RFDs tested included two contracts signed by the EIP director. Both should have been recommended by EIP but signed by purchasing personnel. One contract was between EIP and Nelligan Sports Marketing, Inc. for promotional sponsorship. Under the $1,400 agreement, EIP received print advertising in football game programs. The second contract was a Letter of Agreement for $1,000.00 to conduct continuing education classes for equine stewards and judges. A search of Ms. Ward's office found a copy of a Memorandum of Understanding (MOU) between EIP and Horse TV for coordination and facilitation of video services and internet broadcasting of the 2010 Summit. The $12,500.00 MOU was signed by the EIP director, instead of the authorized officials in purchasing. The funding received from the Equine Trust for capital improvements (funded with the pari-mutuel excise tax) is formalized through legal agreements between the program and the Council on 15

College Of Business Equine Industry Program Postsecondary Education. These agreements are titled Contractual Agreement and include the legal elements of a contract. As such, the university requires officials designated by the Board of Trustees to execute the documents. The agreements for the periods ended June 30, 2010 and June 30, 2011 were signed by the EIP director. There is no evidence that the agreements were signed by an authorized university official. The agreements were also signed by the dean and by an associate university counsel who signed as to form and legality. The documents were discussed with University Counsel, who agreed that her staff should not have signed off on the agreements. She also gave her opinion that the documents are legally binding documents that require authorized signature. Action Plan: All financial transactions, including contracts must be reviewed and approved by the deans office prior to being routed for processing. The colleges new financial controls policy requires all financial transactions to be reviewed by deans office staff, which will help identify violations of existing policy. Target Implementation Date: Implemented Because the College recognized the Equine Trust as a part of state law, it was not perceived to be a contract in need of the Provost's signature. There was no intention to violate the signature process on the part of the dean or university legal counsel. To prevent future confusion, the Associate University Counsel will give a presentation to unit business managers at a future UBM meeting. The college will develop a routing slip to use when contracts from outside agencies are necessary. Target Implementation Date: September 30, 2011 9. Personal Service Contracts Personal service contracts (PSCs) are agreements in which an individual, firm, partnership, or corporation is hired to perform services requiring professional skill or professional judgment for a specified period of time at an agreed upon price. Services that require a PSC include consultants, doctors, employee search firms, nurses, lawyers, engineers, and architects. During our period of review, EIP established seven PSCs. There were 70 invoices that were associated with personal services totaling $207,308.32. When requisitions are created, users are required to enter the PSC number allowing the system to prevent non-compliant payments. Departments are also required to work with vendors and purchasing to ensure the contracts are properly established on the accounting system and that the documentation submitted by the vendors complies with all university requirements. The following was identified: There were 35 invoices whose requisition was not tied to a PSC as required; in 26 of these cases, the PSC had been established. In ten instances, the contract maximum was exceeded. The overpayment was not identified because the requisitions were not properly associated with the PSC.

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College Of Business Equine Industry Program

Vendors submitted 41 invoices that EIP should not have accepted because there was not enough information to allow the university to validate the expenses. Departments are required to work with vendors to ensure invoices include the dates work was performed, and a description of the services provided. For example, an invoice for $440 was accepted with a description travel for meeting. The date and purpose of the meeting should have been included on the invoice. Three contracts were established after the work was performed in violation of state law. One PSC was established using the University of Louisville Foundation form when the state form should have been used; no requisitions were ever tied to this PSC. This circumvented state review of the contract. One request for disbursement for $1,200 should have been supported with a personal service contract. In this case, an individual was hired to manage and analyze data sets in software formats.

Action Plan: The college has made arrangements with the controllers office to provide training on accounts payable requirements, including personal service contracts. If necessary, training by the purchasing department will also be obtained. Target Implementation Date: Implemented 10. Fraudulent PayPal Accounts As noted previously, Ms. Ward routinely established PayPal accounts to divert funds from the university using the procurement card. This was done by creating a PayPal account in the name of an established vendor, namely Blood Horse, Rea Quarter Horses, or Ranching for Profit. She would then create a purchase from the fake accounts and pay for the purchase using the procurement card. Only six transactions processed through the accounts were legitimate. In at least one instance, the purchase was made using another COB procurement card with the expense later transferred to the EIP program. In many cases, Ms. Ward used her name and address to create the PayPal account. In at least one instance, Ms. Ward attempted to change the owner of the account using the name and personal information of a deceased faculty member. Through discussion with the EIP director it is clear that he was aware of the creation of at least one of the PayPal accounts, although the purpose was purportedly a requirement by the university to facilitate vendor payments. Action Plan: The creation of PayPal accounts to conduct university business is prohibited by university policy. All faculty and staff should be aware of this prohibition and critically question any PayPal account transactions that appear on university records as expenses or revenues. Target Implementation Date: Implemented

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College Of Business Equine Industry Program

11. General Ledger Reconciliations (Recurring issue from previous audit reports dated July 30, 1997 and April 11, 2007) It is noted repeatedly throughout this report that fraudulent activity would have been discovered through appropriate and timely reconciliation. Programs with significant activity, including transactions that occur in salary and revenue general ledger accounts, should be reconciled monthly. Programs will little or no activity should be reviewed at least quarterly. In addition to discovering fraudulent activity, routine adequate reconciliation will identify errors and make correction possible. University guidelines recommend that reconciliations be documented, signed and dated by the person performing the reconciliation. Additionally, separation of duties prohibits the person performing reconciliations to also authorize, enter, or initiate financial transactions. Reconciling provides management and staff with the ability to substantiate a balance, detect errors, and have confidence in reported financial data. Action Plan: General ledger, deposit to event records, and cash receipts will be reconciled in a timely manner by the colleges UBM or other deans office staff under the direction of the UBM. Procurement card reconciliations will be reviewed by the UBM. Target Implementation Date: Implemented

Gretchen S. Hyde Senior Auditor

Cheri J. Jones Director

Jeanne M. Kennedy Senior Auditor

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College Of Business Equine Industry Program

APPENDIX A University Funds Deposited into ERRC Checking Account

Item 1 2 3 4 5 6 7 8 9 10 11

Posted Date 1/13/2011 11/12/2010 9/27/2010 8/2/2010 2/3/2010 12/17/2009 7/16/2009 1/22/2009 11/6/2008 4/1/2008 8/22/2007 Total

Payor UofL UofL UofL UofL UofL UofL UofL UofL UofL UofL UofL

Amount $10,097.96 5,000.00 5,000.00 25,000.00 10,000.00 10,000.00 12,000.00 23,000.00 10,000.00 10,000.00 10,000.00 $130,097.96

Program KY Equine Industry Pari-Mutuel KY Equine Industry Pari-Mutuel KY Equine Industry Pari-Mutuel KY Equine Industry Pari-Mutuel Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Education Improvements KY Equine Industry Pari-Mutuel Equine Education Improvements

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College Of Business Equine Industry Program APPENDIX B Non-University Funds Diverted into ERRC Checking Account
Item 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Posted Date 2/15/2011 2/15/2011 2/15/2011 2/15/2011 2/9/2011 2/9/2011 2/8/2011 2/8/2011 2/8/2011 2/4/2011 2/4/2011 2/4/2011 2/4/2011 2/4/2011 2/4/2011 1/6/2011 12/14/2010 12/14/2010 11/18/2010 11/18/2010 11/18/2010 11/18/2010 11/18/2010 11/15/2010 11/2/2010 11/2/2010 11/2/2010 11/2/2010 11/2/2010 11/2/2010 11/2/2010 Payor Johanna G. Salmon Katherine King Katie Gangnath Scott Jagow Amy & Jonathan Rapaport Melissa Gerike Leonard and Carol Wiseman Stephanie Sidoti Steven Shaffer DBA Perfect Stripes Ember Marr Jessica Peterson John or Diane Thompson Katelyn Torp Lauren Carlisle Rebecca McCullough John Perez E.J. O'Brien State of Nebraska Barbara Borden Brooks Becraft/Vine Run Farm Jeff Dye Rick or Amy Leigh Ronald or Janis Tomlinson State of Michigan Commonwealth of KY Dept of Treasury James & Juliana O'Brien James & Mary Beck Keeneland Raceway Park Randy Blaseg Richard Evans Amount $500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 75.00 75.00 125.00 63.00 63.00 125.00 63.00 63.00 775.00 125.00 125.00 125.00 125.00 125.00 125.00 125.00 Intended Program Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation

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College Of Business Equine Industry Program APPENDIX B Non-University Funds Diverted into ERRC Checking Account
Item 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 Posted Date 11/2/2010 10/20/2010 10/19/2010 10/19/2010 10/19/2010 6/2/2010 3/26/2010 2/3/2010 12/22/2009 11/17/2009 11/2/2009 10/22/2009 9/30/2009 9/16/2009 9/10/2009 9/8/2009 9/4/2009 8/31/2009 8/20/2009 8/17/2009 8/10/2009 7/27/2009 5/6/2009 4/29/2009 4/29/2009 4/29/2009 4/29/2009 4/29/2009 4/29/2009 4/29/2009 Payor Steven Morgan Commonwealth of KY Dept of Treasury Brent Kelley Jean or R. Jean Chalk John Beech, Jr Equine Breeding Research & Development Council Commonwealth of KY Dept of Treasury Priefert Accounts Payable Marvin or Eunice Beeman Cynthia Smith BMO Bank of Montreal. Money Order purchased by Allan Gray Barbara or John Yinger Margaux Farm Pasquale Bovenzi Money order purchased by Mike Wandishin William or Mary Troilo Gerry or Robin Olguin KY Employer's Mutual Insurance Western Union Money Order/Virginia Hawley Lynch John Perez Kentucky Horsemen's Benevolent & Protective Association J. Chester Porter & Associates Attorneys at Law Ronald or Georgia Holbrook Andrew Apro Ashley Pickett David and Patricia Willis Elizabeth Crow Elizabeth Young Lindsay Schultz Lindsey Thompson Amount 125.00 125.00 50.00 125.00 125.00 2,500.00 40,000.00 157.30 586.50 550.00 500.00 550.00 250.00 500.00 500.00 500.00 500.00 4,000.00 500.00 500.00 500.00 1,000.00 788.00 788.00 788.00 788.00 788.00 788.00 788.00 788.00 Intended Program Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Special Programs or Gift Equine Trust Program Equine Special Programs or Gift Gift account Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Special Programs or Gift Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Special Programs or Gift Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Gift account Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Education Improvements

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College Of Business Equine Industry Program APPENDIX B Non-University Funds Diverted into ERRC Checking Account
Item 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 Posted Date 4/29/2009 4/29/2009 4/29/2009 4/6/2009 1/22/2009 1/15/2009 1/9/2009 10/31/2008 10/31/2008 10/31/2008 10/31/2008 10/15/2008 10/15/2008 9/24/2008 9/24/2008 9/24/2008 9/15/2008 9/15/2008 9/15/2008 8/6/2008 6/26/2008 6/18/2008 6/18/2008 6/13/2008 4/9/2008 1/23/2008 11/16/2007 11/16/2007 11/16/2007 10/31/2007 Payor Marylee Kuchta/LR's Dog Walking Etc Peggy & David Christianson Signature Title, LLC Commonwealth of KY Mountaineer Park, Inc. Peggy or David Christianson State of Michigan Alysia Elmore Andrew Apro David and Patricia Crow Sara Davenport Bank of American/Cashier's Check/ Purchased by Brent Mclaren Timothy Day Grant Baker Macon County Racing Commission Noble Hay, Jr. Lynn Balon Renee Sheward Ricky Sackett Sung-Hyun Tak and Eun-Young Choi KEEP - KY Equine Educ Alliance American Saddlebred Horse Assoc KTOB Promotional Fund Equine Breeding Research & Development Council State of Arizona Dept of Treasury/State of New Jersey Saving Ground, Inc Stephen Simoff Vincent or Cheryl Clark Dunlavy Racing Stable, LLC Amount 788.00 788.00 788.00 250.00 125.00 500.00 750.00 500.00 500.00 500.00 500.00 125.00 125.00 125.00 250.00 125.00 25.00 125.00 125.00 17,000.00 10,000.00 2,500.00 2,500.00 2,500.00 125.00 125.00 450.00 450.00 225.00 450.00 Intended Program Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Steward Accreditation Equine Steward Accreditation Equine Education Improvements Equine Steward Accreditation Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Education Improvements Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Gifts-Equine Admin Equine Special Programs or Gift Equine Special Programs or Gift Equine Special Programs or Gift Equine Special Programs or Gift Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation

22

College Of Business Equine Industry Program APPENDIX B Non-University Funds Diverted into ERRC Checking Account
Item 92 93 94 95 96 97 98 99 100 101 102 103 104 Posted Date 10/31/2007 10/31/2007 10/31/2007 10/31/2007 10/31/2007 10/31/2007 10/31/2007 10/31/2007 10/17/2007 10/17/2007 10/17/2007 10/9/2007 10/9/2007 Payor Gerald Hobby James Quinn Keeneland Lester or Denise Teeters Linda Williamson Romero Racing Stables State of Louisiana Treasury Dept The Star Group Doug or Pam Schoepf Natl Steeplechase Assoc State of Louisiana Treasury Dept Luis Quinones Marshall or Mary Ellen Cassidy Total Amount 125.00 85.00 125.00 125.00 450.00 450.00 325.00 450.00 400.00 450.00 375.00 450.00 450.00 $117,848.80 Intended Program Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation

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College Of Business Equine Industry Program APPENDIX C Fraudulent ERRC Bank Account Payments
Item 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 Posted Date 2/15/2011 2/11/2011 1/25/2011 1/18/2011 1/18/2011 1/14/2011 1/13/2011 11/18/2010 11/15/2010 11/15/2010 11/15/2010 11/3/2010 11/3/2010 10/25/2010 10/25/2010 10/25/2010 10/25/2010 10/8/2010 9/28/2010 9/28/2010 9/24/2010 9/21/2010 9/20/2010 9/9/2010 9/9/2010 9/7/2010 8/26/2010 8/24/2010 8/24/2010 8/17/2010 8/4/2010 8/3/2010 6/14/2010 6/14/2010 6/14/2010 5/21/2010 5/13/2010 5/13/2010 5/7/2010 Trans. Type/Check No. 1126 1121 ACH PayPal 1118 1119 1117 1116 1113 1109 1111 ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1103 1100 1101 1143 1144 1102 1098 1099 1279 1281 1275 1276 1271 1142 1270 ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1241 1268 1266 Check Payee/Item Purchased A.R. Ward A.R. Ward Transferred to an unauthorized PayPal Account A.R. Ward A.R. Ward A.R. Ward A.R. Ward A. R. Ward A.R. Ward A. R. Ward Add funds from PNC bank account Transferred to an unauthorized PayPal Account Add funds from PNC bank account Eastlake Hanging Kerosene Oil Lamp Chandelier Faux Whitetail Deer Chandelier Smith & Hawkens Mailbox Antique pulley A.R. Ward A. R. Ward A. R. Ward A. R. Ward A. R. Ward A. R. Ward A. R. Ward A. R. Ward A. R. Ward A. R. Ward A. R. Ward A. R. Ward A. R. Ward Alisha Ward A. R. Ward L.A.M.B. 'Quiana' Sandal Brazilian Workout DVD's by Beachbody Brooks Brothers Button Front Leg Brown Dress Ladys Brooks Brothers Wool Plaid Skirt St Matthews Imports (S.M.I.). This is car repair. Piper Uhl or A.R. Ward Piper Uhl or A.R. Ward Amount $1,000.00 800.00 1,000.00 2,000.00 1,000.00 800.00 500.00 1,400.00 700.00 2,500.00 391.00 300.00 15.00 209.50 115.95 95.99 18.70 1,750.00 3,500.00 800.00 4,000.00 975.00 500.00 900.00 500.00 1,000.00 1,000.00 1,000.00 1,000.00 2,000.00 1,500.00 5,000.00 86.00 71.00 27.44 25.04 5,298.38 1,000.00 932.23

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College Of Business Equine Industry Program APPENDIX C Fraudulent ERRC Bank Account Payments
Item 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 Posted Date 5/7/2010 4/21/2010 4/20/2010 4/20/2010 4/20/2010 4/20/2010 4/20/2010 4/19/2010 4/19/2010 4/19/2010 4/19/2010 4/19/2010 4/19/2010 4/19/2010 4/16/2010 4/16/2010 4/16/2010 4/16/2010 4/9/2010 4/9/2010 4/9/2010 4/8/2010 4/8/2010 4/8/2010 4/8/2010 4/8/2010 4/8/2010 4/8/2010 4/8/2010 4/8/2010 4/5/2010 4/5/2010 4/5/2010 4/5/2010 4/5/2010 4/5/2010 4/5/2010 4/5/2010 4/2/2010 Trans. Type/Check No. 1267 1145 1148 ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1149 1150 ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1261 Check Payee/Item Purchased Piper Uhl or A.R. Ward Sam's Club. Personal expenses Sam's Club. Personal expenses Honda: CB (motorcycle) Honda: CB (motorcycle) Perfect Spring BCBG Wrap Dress in Turquoise Lacoste long-sleeved black piqu shirt dress Piper Uhl or A.R. Ward Piper Uhl or A.R. Ward Transferred to an unauthorized PayPal Account Item from furnituremail.com Burberry Prorsum New Black Cocktail Party Dress BCBG Max Azria Black W/Lace Gown Black Dress Kenneth Cole Cocktail Evening Dress Jersey V-Neck Merry Products Pet Dog Gate, tear stain remover Personal purchase from artist at Abztract.com Brooks Brothers Tailored Dress Wicked Weasel Lingerie Long sleeve blouse, mini dress, long sleeve top Brooks Brothers Lucia Fit Black Trouser Pants Geometric Print Banana Republic Knit Wrap Dress Coach Alexa Heels Pumps Black Leather Coach Marci Brown Heels Pumps Motorcycle Helmet US Army Old school retro vintage Cole Haan Nike Air Black Peep Toe Slingbacks Cole Haan Nike Air Kitty Air Copper Sandal Prada Gold Leather Slingbacks Heels Shoes Prada Womens' Boots Prada T-Strap Heels - Purple Vegetable garden seeds L.A.M.B. Women's Rhett Sandal Heel Blk Gucci lizard sandal Prada Peach Patent Leather Mary Jane Heels Nine West Silk Career Dress Brooks Bros black fleece 100% linen shirt ladies Brooks brothers satiny black aline skirt Lemongrass seeds organic anti-inflammatory Garden Seeds Piper Uhl or Alisha Ward Amount 1,000.00 979.34 216.34 4,302.52 500.00 74.99 74.99 1,000.00 1,000.00 2,500.00 2,228.00 285.95 44.98 35.98 311.70 150.00 139.99 24.98 107.58 36.57 32.99 139.98 95.85 64.89 60.20 60.00 60.00 57.99 28.98 8.70 179.99 127.88 59.00 48.99 45.89 19.55 5.05 4.48 1,500.00

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College Of Business Equine Industry Program APPENDIX C Fraudulent ERRC Bank Account Payments
Item 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 Posted Date 4/2/2010 4/2/2010 4/2/2010 4/2/2010 4/2/2010 4/2/2010 4/2/2010 4/2/2010 4/2/2010 4/2/2010 4/1/2010 4/1/2010 4/1/2010 4/1/2010 4/1/2010 4/1/2010 4/1/2010 4/1/2010 4/1/2010 4/1/2010 4/1/2010 4/1/2010 4/1/2010 4/1/2010 3/31/2010 3/29/2010 3/29/2010 3/29/2010 3/29/2010 3/29/2010 3/29/2010 3/29/2010 3/29/2010 3/29/2010 3/26/2010 3/16/2010 3/12/2010 3/8/2010 3/3/2010 Trans. Type/Check No. ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1258 1259 ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1256 1092 1252 Check Payee/Item Purchased Transferred to an unauthorized PayPal Account BCBGirls Pumps, Coach Vinnette Flats 9 Hanging Planter Upside Down Under Pot Prada Vernice Black Patent Strappy Wedges Coach Maralee Wedge Platform Shoes Prada Black Leather Ankle Strap Heel Shoe King Size Sheet Set - White-Organic Cotton 9 Hanging Planter Upside Down Under Pot Pet-tabs regular for dogs (180 ct) by Pfizer Garden Seeds Coach Platform Sandals Coach Brandey Metallic Pewter Shoes Pump Heel Coach Carli Black Leather Pump Shoes Coach Corey Op Art Beige Cream Heels w/Bow Coach Dori Slingback Cream Prada 3 inch classic pumps La Perla Black Silk Sleeveless Slip Lingerie BCBG Leather & Raffia Sandals Heels Antique carbide mining light justright brand Victoria's Secret Lingerie Flavio Castellani Black Knee Length Dress Freya Arabella Lingerie Kyoto Moss Spores for Bonsai pots Vegetable garden seeds Personal attorney fees paid to Thomas Szczygielski A.R. Ward A.R. Ward Victorias Secret Lingerie FoodSaver V3835 Vacuum Food Sealer 1 Gallon Eucalyptus Globulus Pure Essential Oil Freya Arabella lingerie Freya Arabella lingerie La Perla Malizia lingerie Freya Arabella lingerie Personal purchase from artist at Abztract.com "Add funds from PNC bank account" Piper Uhl or A.R. Ward Piper Uhl or A.R. Ward Piper Uhl or A.R. Ward Amount 2,000.00 150.88 116.81 112.39 111.49 75.00 71.49 32.64 28.94 3.75 164.49 120.94 109.99 107.50 100.00 75.70 59.00 54.00 37.00 35.95 32.50 26.25 23.00 10.19 500.00 538.00 451.14 162.22 159.99 100.98 92.98 82.23 47.00 32.99 150.00 191.50 690.00 1,000.00 1,124.00

26

College Of Business Equine Industry Program APPENDIX C Fraudulent ERRC Bank Account Payments
Item 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 Posted Date 3/3/2010 3/2/2010 2/24/2010 2/23/2010 2/23/2010 2/19/2010 2/19/2010 1/11/2010 1/11/2010 1/11/2010 1/7/2010 1/7/2010 1/7/2010 1/7/2010 1/7/2010 1/7/2010 1/7/2010 1/7/2010 1/7/2010 1/7/2010 1/6/2010 1/6/2010 1/6/2010 1/6/2010 1/6/2010 1/5/2010 1/5/2010 1/4/2010 1/4/2010 1/4/2010 1/4/2010 1/4/2010 12/29/2009 12/28/2009 12/28/2009 12/28/2009 12/28/2009 12/28/2009 12/22/2009 Trans. Type/Check No. ACH PayPal 1248 ACH PayPal ACH PayPal ACH PayPal 1243 1246 ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1090 ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1089 ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1088 ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1232 Check Payee/Item Purchased Louisville U of L Cardinals vs. Syracuse Orangemen EIP or A R Ward Ella Moss Black V-Neck Dress Bebe Punk Plaid Pencil Skirt Ella Moss blk/metallic gray surplice knit dress A.R. Ward A.R. Ward Bose Companion 5 Multimedia Computer Speaker Purchase from Rockler Co. (Hardware/woodworking) BCBG Maxazria Green & Yellow Striped Silk Dress 2 Vampire Weekend Tickets Nashville Ryman BMW 5-Series Cargo Liner for Sedan & Wagon BMW 3 Series Snow Shade Windshield Cover The Wrong Dog*Carol Lea Benjamin This Dog for Hire by Carol Lea Benjamin Without a Word by Carol Lea Benjamin Lady Vanishes by Carol Lea Benjamin A Hell of a Dog by Carol Lea Benjamin The Hard Way by Carol Lea Benjamin Fall Guy - Carol Lea Benjamin A.R. Ward SK-II Travel Set Pitera Facial Treatme Esse Dermalogica Age Smart Multivitamin Power Firm Programmable Indoor Light Appliance Digital Timer Collagen W Vitamin C 450 MG 60 Capsules A.R. Ward Contour Ab Belt Core Sculpting Complete System Arts & Crafts Mailbox Honeywell Prestige HD Thermostat The Stickley Address Plaque Panasonic Blu Ray Disc Player 1907 RPPC Postcard~Pit Bull/Boxer Dog with Hat Persian Rugs A.R. Ward Shaker TV Armoire Cabinet Wardrobe Closet Cabinet Photo Child & Bullmastiff or Pit Bull Dog Brooks Brothers Wrap Dress 1888 Deadwood Railroad Engineers w/dog photo A.R. Ward Amount 780.00 788.07 51.09 102.76 13.99 500.00 500.00 302.50 73.09 29.00 299.99 64.75 39.95 8.94 7.28 6.98 6.79 6.50 5.62 5.00 995.00 55.00 33.99 24.29 13.90 995.00 213.27 338.00 335.00 123.15 119.50 14.00 258.00 750.00 509.15 24.04 17.94 9.98 500.00

27

College Of Business Equine Industry Program APPENDIX C Fraudulent ERRC Bank Account Payments
Item 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 Posted Date 12/22/2009 12/18/2009 12/18/2009 12/18/2009 12/15/2009 12/15/2009 12/8/2009 12/7/2009 12/7/2009 11/30/2009 11/27/2009 11/27/2009 11/25/2009 11/25/2009 11/25/2009 11/24/2009 11/24/2009 11/24/2009 11/24/2009 11/24/2009 11/23/2009 11/23/2009 11/20/2009 11/20/2009 11/20/2009 11/19/2009 11/19/2009 11/19/2009 11/18/2009 11/18/2009 11/18/2009 11/18/2009 11/18/2009 11/16/2009 11/13/2009 11/12/2009 11/12/2009 11/12/2009 11/12/2009 Trans. Type/Check No. 1233 1229 1230 1231 1227 1228 ACH PayPal 1223 1224 ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1217 1218 1216 ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1215 ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1214 ACH PayPal ACH PayPal ACH PayPal ACH PayPal Check Payee/Item Purchased A.R. Ward A.R. Ward A.R. Ward A.R. Ward A.R. Ward A.R. Ward Transfer of funds from PNC bank account A.R. Ward A.R. Ward J Crew Wool Sleeveless Sheath Dress Ban Republic Lightweight Wool Sheath Dress Tan Tartan Wool Allen B Schwartz Skirt PowerMat Wireless Charging Home + iPhone Case Banana Republic Wool Stretch Skirt Jacket Suit Womens Career Tahari Arthur S Levine Suit Coach Corey Black & White OP Art Shoes MIXIT Leather Belt, Farelle Wool Tweed Dress Skirt Black Wool Anthropologie Ballet Dress Skirt Brooks Brothers Lambswool Cableknit Sweater BCBG Ladies Women's Leather Heel Pumps A.R. Ward A.R. Ward A.R. Ward Coach Black Patent Leather Heel Pumps Michael Kors Black Suede Wedge Shoes Classic Prada Heels with Tassels Coach stacked slingback peeptoe heels Calvin Klein Hazel Wedges Pumps Shoes A.R. Ward BCBG Jo Black Boots Wedges, Coach Heels Coach Lizza Python Leather Pumps Heels Victoria's Secret Lingerie Coach Signature Martina Black Pumps Burberry London Black Check Skirt EIP or A.R. Ward Chanel Travel Jewelry Case Brooks Brothers Dark Brown Wool Dress Coat Brooks Brothers Women's Wool Sweater Brooks Brothers Women's Long Navy Wool Coat Amount 500.00 500.00 500.00 500.00 500.00 500.00 1,400.00 900.00 425.00 16.99 52.99 15.98 127.50 55.95 48.50 122.45 51.48 43.52 30.98 18.99 1,000.00 1,000.00 500.00 59.95 17.09 106.00 91.00 51.94 850.00 151.97 129.99 50.46 39.98 47.99 1,178.50 132.50 81.00 68.00 62.09

28

College Of Business Equine Industry Program APPENDIX C Fraudulent ERRC Bank Account Payments
Item 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 Posted Date 11/12/2009 11/12/2009 11/12/2009 11/10/2009 11/10/2009 11/10/2009 11/9/2009 11/9/2009 11/9/2009 11/9/2009 11/5/2009 11/2/2009 11/2/2009 10/27/2009 10/27/2009 10/22/2009 10/21/2009 10/6/2009 10/6/2009 9/24/2009 9/24/2009 9/24/2009 9/24/2009 9/24/2009 9/15/2009 9/15/2009 8/19/2009 8/13/2009 8/10/2009 7/22/2009 7/20/2009 7/17/2009 7/7/2009 6/18/2009 5/19/2009 5/15/2009 5/15/2009 5/15/2009 5/15/2009 Trans. Type/Check No. ACH PayPal ACH PayPal ACH PayPal 1213 ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1207 1208 1199 1200 1191 1189 1184 1185 ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1180 1181 1177 1178 1176 1174 1172 1171 1170 1169 ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal Check Payee/Item Purchased J Crew Felted Wool Black Dress Skirt Suit Brooks Brothers Womens Button Down Shirt Pink Brooks Brothers V-Neck Sweater EIP or A.R. Ward Chanel Caviar Credit Card Holder Black Brooks Bros Gray Merino Wool Button Front Dress Brooks Brothers Genuine Leather Coat J Crew Black Polka Dot Silk Ruffle Dress Brooks Brothers Silk V-Neck Womens Sweater Womens Brooks Brothers Gray Wool Career Skirt Sirius XM SkyDock for use w/iPod touch or iPhone A.R. Ward A.R. Ward A.R. Ward A.R. Ward A.R. Ward A.R. Ward EIP or Alisha Ward EIP or Alisha Ward Wicked Weasel Lingerie Wicked Weasel Lingerie Wicked Weasel Lingerie Wicked Weasel Lingerie Wicked Weasel Lingerie EIP Or Alisha Ward Alisha Ward or EIP A.R. Ward A.R. Ward A.R. Ward Alisha Ward Alisha Ward or EIP A.R. Ward A.R. Ward A.R. Ward Apple Mac Powerbook Laptop Computer WIFI Coach Black Trench Rain Coat J Crew Cotton Cashmere Bouquet Cardigan Banana Republic Black White Cardigan Sweater J Crew Cashmere Sweater Cardigan Amount 49.76 22.37 16.49 1,305.49 132.51 13.45 84.85 84.49 20.49 17.00 116.99 1,656.70 995.00 900.00 900.00 1,000.00 950.00 647.75 775.86 30.98 25.98 22.99 21.95 14.99 774.52 500.00 655.00 635.79 1,315.84 9,900.00 2,000.00 402.75 500.00 883.25 620.00 180.55 49.99 38.10 29.00

29

College Of Business Equine Industry Program APPENDIX C Fraudulent ERRC Bank Account Payments
Item 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 255 256 257 258 259 260 261 262 263 264 265 266 267 268 269 270 271 272 273 Posted Date 5/12/2009 5/12/2009 5/12/2009 4/23/2009 4/23/2009 4/22/2009 4/21/2009 4/21/2009 4/21/2009 4/21/2009 4/21/2009 4/21/2009 4/21/2009 4/21/2009 4/21/2009 4/21/2009 4/21/2009 4/20/2009 4/20/2009 4/20/2009 4/20/2009 4/20/2009 4/20/2009 4/20/2009 4/20/2009 4/20/2009 4/20/2009 4/20/2009 4/17/2009 4/17/2009 4/13/2009 4/9/2009 4/7/2009 4/2/2009 4/1/2009 4/1/2009 3/31/2009 3/31/2009 3/31/2009 Trans. Type/Check No. ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1151 1153 ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1149 1150 1144 1143 1141 1136 ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal Check Payee/Item Purchased Dermalogica Shave Oil, Dermalogica Toner J Crew Wool Cashmere Argyle Sweater Gray Black Banana Republic Summer Sweater Sirius Stiletto 2 Portable Radio+Car Kit & Home Dock Ann Taylor Loft Floral Shift Dress Arden B Skirt Khaki Faux Belt Pencil Ann Taylor Loft Knit Dress, Ann Taylor Print Dress Anthropologie Pencil Embroidered Molly B Dress Red cotton dress & Anthropologie gift To the Max by BCBG Storm Pencil Skirt J Crew White Gray Stripe Linen A-Line Sailor Skirt Body by Victoria's Secret Pencil Skirt Plaid Wool Ann Taylor Silk Floral Dress Designer Donna Karan DKNY Black Silk Shift Dress Lux Plaid Gray Pencil Skirt Urban Outfitters A.R. Ward A.R. Ward Elevenses Striped Skirt Anthropologie Black Dots Banana Republic Silk Pleat Print Dress Ann Taylor Black White Geo Print Dress Ann Taylor Dress Black Ann Taylor Brown/White Wrap Dress Bamboo Print Sitwell Anthropologie Black Alilne Cargo Skirt Brooks Brothers Blue Button Down Shirt Dress Cole Haan Black Mule Ann Taylor Black White Sheath Dress Anthropologie White, Yellow, & Green Skirt BCBG Knee Length Black Pencil Skirt Alisha Ward Alisha Ward A.R. Ward A.R. Ward EIP or A R Ward AR Ward BCBG Black Wedged Shoes Victoria's Secret Lingerie Burberry Purse Cole Haan - Tan Pumps Tahari Blue White Seersucker Pencil Skirt Amount 55.27 32.49 24.95 318.99 24.99 20.98 70.93 49.99 37.99 33.94 28.24 25.49 24.94 20.30 18.41 500.00 500.00 45.00 43.50 39.99 35.50 31.74 30.98 27.99 26.69 24.99 19.05 10.50 88.35 70.75 941.10 461.60 650.68 2,386.62 39.99 21.20 89.80 34.49 29.00

30

College Of Business Equine Industry Program APPENDIX C Fraudulent ERRC Bank Account Payments
Item 274 275 276 277 278 279 280 281 282 283 284 285 286 287 288 289 290 291 292 293 294 295 296 297 298 299 300 301 302 303 304 305 306 307 308 309 310 311 312 Posted Date 3/30/2009 3/30/2009 3/30/2009 3/30/2009 3/27/2009 3/27/2009 3/27/2009 3/27/2009 3/27/2009 3/25/2009 3/25/2009 3/24/2009 3/24/2009 3/24/2009 3/23/2009 3/23/2009 3/16/2009 2/25/2009 2/23/2009 1/27/2009 1/16/2009 1/13/2009 1/9/2009 12/10/2008 11/25/2008 11/24/2008 11/24/2008 11/20/2008 11/17/2008 11/7/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/6/2008 11/5/2008 11/5/2008 11/5/2008 11/5/2008 Trans. Type/Check No. ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1134 ACH PayPal ACH PayPal 1132 ACH PayPal ACH PayPal ACH PayPal 1121 1115 1097 1092 1091 1090 1087 ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1083 1076 ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal Check Payee/Item Purchased Cole Haan Nike Leather Thong Sandals/Flats Victoria's Secret Lingerie "Your Barnes & Noble.com order: $22.17 Lot of Four Tank Tops Seven for Express, J Crew Lithe Anthropologie Asymmetric Striped Skirt MOTH Anthropologie Black Floral Crochet Cardigan Anthropologie Ett Twa Pepper Vine Khaki Pants Free People Anthropologie Halter Tunic Top Grey One/Off Shoulders Boho Top w/ Necklace Three Dots Anthropologie Black Bandage Dress Alisha Ward Anthropologie Blu Heaven Dress Banana Republic & Gap Sweater Dresses Alisha Ward Anthropologie Urban People Shirt Top Dress Little Yellow Button Anthropologie Tunic Dress Prada Brown Slingback Heel with Rosette EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP Vintage Heath California Pottery - Salt and Pepper Gucci Suede Black Logo Heels Pumps Ralph Stanley Hatch Show Print Concert Poster Large Iron Freestanding Pet Dog Baby Gate Fence EIP or Alisha Ward EIP or Alisha Ward Suede Bunny Flats, West Lake Heel Me-9 PRADA Boots Medium Black Brown Fitted Prada Graye Red Flats Shoes 2 Armani Exchange Angora Womens Sweaters J Crew Womens' Light Blue Corduroy Jeans Gucci - Metal Fine Chain Belt, Gucci Strappy Sandals Elie Tahari Silk Dress Gucci Light Brown Monogrammed Leather Purse Dermalogica Hand & Nail Treatment/Age System Amount 55.19 26.90 22.17 16.33 49.99 36.00 34.99 33.49 25.00 18.69 152.03 42.85 28.49 1,000.00 26.60 17.76 45.00 3,964.28 450.00 1,257.04 425.00 554.20 500.00 902.00 21.74 50.99 16.50 132.48 2,531.77 1,400.00 64.97 38.49 30.00 26.99 25.99 104.99 84.80 78.49 65.18

31

College Of Business Equine Industry Program APPENDIX C Fraudulent ERRC Bank Account Payments
Item 313 314 315 316 317 318 319 320 321 322 323 324 325 326 327 328 329 330 331 332 333 334 335 336 337 338 339 340 341 342 343 344 345 346 347 348 349 350 351 Posted Date 11/5/2008 11/5/2008 11/5/2008 11/5/2008 11/4/2008 11/4/2008 11/4/2008 11/3/2008 11/3/2008 11/3/2008 11/3/2008 11/3/2008 11/3/2008 11/3/2008 11/3/2008 11/3/2008 11/3/2008 11/3/2008 11/3/2008 11/3/2008 11/3/2008 10/23/2008 10/16/2008 10/7/2008 10/6/2008 10/3/2008 10/3/2008 10/2/2008 10/2/2008 10/2/2008 9/30/2008 9/30/2008 9/30/2008 9/29/2008 9/25/2008 9/24/2008 9/24/2008 9/23/2008 9/23/2008 Trans. Type/Check No. ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1070 1066 1064 1060 ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1057 ACH PayPal ACH PayPal ACH PayPal ACH PayPal Check Payee/Item Purchased Burberry Shimmer Check Slippers Flats Bag Hermes 100% silk scarf 16 x 16.5 Betsey Johnson Wool Pleated Skirt J Crew Tan Full Zip Front Below Knee Pencil Skirt Gucci Brown Leather High Heel w/Buckle Front J Crew Straight Gray Wool Skirt GAP Kilt Pleated Skirt Wool Blend Plaid Lined Black Wool Swing Pea /Coat Jacket Antropologie Black Full Trench Coat Jacket Anthropologie Anthropologie Hoodie Sweater Burberry London Mitered Nova Check Cotton Skirt J Crew Felted Wool Mini Skirt Black J Crew Hailey T-Strap Suede Wedges Black Fendi Italy Browns Pony Hair Elie Tahari Virgin Wool Tweed Pleated A Line Skirt Gucci Black Pumps Banana Republic Wool Black Pencil Skirt Kenneth Cole Reaction Hype Dream Brown Shoes J Crew 100% Wool Lined Pants J Crew Khakis EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward Schiaparelli Vintage-Designer-Silk Scarf Betsey dress pin up style sold @ Anthropologie Nick & Mo Shirt Top Blouse Anthropologie Anthropologie MOD Art Green Vintage Buckle Pump Anthropologie Louis Pleasure Hunter Jacket White Free People Vintage Blue Rose Skirt Anthropologie Anthropologie wide leg khaki pants Ett Tara Ella Moss Mandarin Collar Double Breasted Jacket Women's Black Stretch Belt Anthropologie Forever 21 Silk Floral Garden Shift Dress EIP or Alisha Ward Donation to French Bulldog Rescue Network (FBRN) Chiffon Babydoll Dress & Anthropologies Top *Sanctuary* Anthropologie Trouser Wide Pant J Crew wool blend above knee pleated plaid skirt Amount 62.99 56.50 20.99 15.90 56.99 22.50 18.07 78.98 78.74 56.66 54.00 53.98 50.00 45.00 38.16 34.00 23.03 19.98 17.39 10.00 1,201.00 632.00 600.00 900.00 9.99 55.99 32.95 29.99 28.36 8.25 38.50 34.98 25.99 32.19 800.00 400.00 35.20 42.10 20.79

32

College Of Business Equine Industry Program APPENDIX C Fraudulent ERRC Bank Account Payments
Item 352 353 354 355 356 357 358 359 360 361 362 363 364 365 366 367 368 369 370 371 372 373 374 375 376 377 378 379 380 381 382 383 384 385 386 387 388 389 390 Posted Date 9/16/2008 9/16/2008 9/15/2008 9/15/2008 9/12/2008 9/12/2008 9/12/2008 9/12/2008 9/11/2008 9/5/2008 9/5/2008 9/5/2008 9/5/2008 9/5/2008 9/4/2008 9/3/2008 9/2/2008 9/2/2008 9/2/2008 9/2/2008 9/2/2008 8/28/2008 8/18/2008 8/14/2008 8/11/2008 8/5/2008 7/23/2008 7/17/2008 7/15/2008 7/9/2008 7/9/2008 6/27/2008 6/27/2008 6/24/2008 6/24/2008 6/23/2008 6/19/2008 6/11/2008 6/3/2008 Trans. Type/Check No. ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1049 ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1086 ACH PayPal ACH PayPal ACH PayPal ACH PayPal ACH PayPal 1085 1084 1082 1080 1079 1077 1078 1075 1073 1074 1070 1071 1068 1069 1067 1066 1065 1063 Check Payee/Item Purchased Anthropologies Kimono Empire Dress Urban VTG Rockabilly Mini Dress Junoesque Vintage Kimono with Obi Vintage 80s ALNORAL Saks Wool Dress Banana Republic Dark Gray Dress J Crew Black Sweater,VneckButton Down ODILLE by Anthropologie Shirt Anthropologie Mermaid Cap Sleeve Wrap Top EIP or Alisha Ward PUMA Silver Amoko Women's Sneakers Shoes La Perla Glamour Romantica Chemise J Crew Messenger Bag Briefcase Anthropologie Lia Molly Green Wool Sweater Shirt Vintage Scarves by Vera Red Dogs, Cats w/ Rain Banana Republic Skirt, J Crew Cashmere Sweater EIP or Alisha Ward Burberry Patchwork Pumps Heels Burberry Belted Rim Bucket Hat Classic Check J Crew Angler Print Tank Dress J Crew Cable Knit Sweater Zip Hoodie Cardigan Wool J Crew Blue Cableknit Hooded Cardigan EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward Amount 56.29 10.49 43.99 14.94 32.99 30.99 23.25 21.23 995.00 47.00 34.49 33.67 25.50 17.30 64.00 3,425.00 209.49 106.00 54.98 30.46 16.99 2,032.00 2,500.00 2,203.00 2,234.00 724.36 547.28 987.46 2,000.00 925.00 700.00 3,240.00 700.00 984.26 701.00 1,004.00 1,002.96 562.10 1,236.40

33

College Of Business Equine Industry Program APPENDIX C Fraudulent ERRC Bank Account Payments
Item 391 392 393 394 395 396 397 398 399 400 401 402 403 404 Posted Date 6/3/2008 5/29/2008 5/22/2008 5/19/2008 4/25/2008 4/17/2008 3/18/2008 2/27/2008 11/19/2007 10/26/2007 10/19/2007 10/16/2007 10/10/2007 10/9/2007 Trans. Type/Check No. 1064 1062 1060 1058 1057 1053 1045 1039 1022 1018 1017 1012 1011 1010 Check Payee/Item Purchased EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward EIP or Alisha Ward Alisha Ward Alisha Ward Alisha Ward Alisha Ward Pay To illegible; deposited into Ward's bank acct Pay To illegible; deposited into Ward's bank acct Pay To illegible; deposited into Ward's bank acct Pay To illegible; deposited into Ward's bank acct Total Amount 724.60 846.12 824.36 678.12 824.36 542.46 200.00 500.00 1,000.00 988.39 1,000.00 1,700.00 900.00 1,500.00 $190,292.87

34

College Of Business Equine Industry Program APPENDIX D Fraudulent Procurement Card Transactions
Item 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 Date 2/2/2011 1/31/2011 1/30/2011 1/29/2011 1/27/2011 1/26/2011 1/25/2011 1/8/2011 1/6/2011 1/5/2011 1/5/2011 1/5/2011 1/5/2011 1/5/2011 1/5/2011 1/4/2011 1/2/2011 12/29/2010 12/27/2010 12/23/2010 12/21/2010 12/17/2010 12/17/2010 12/2/2010 11/30/2010 11/30/2010 11/29/2010 11/26/2010 11/24/2010 11/23/2010 11/15/2010 11/3/2010 10/29/2010 10/28/2010 10/28/2010 10/27/2010 10/27/2010 Merchant PAYPAL *ANDERSON CO PAYPAL *BLOODHORSEP APL*APPLE ONLINE STORE PAYPAL *BLOODHORSEP PAYPAL *REAQHORSES PAYPAL *BLOODHORSEP PAYPAL *REAQHORSES PAYPAL *BLOODHORSEP PAYPAL *LRSDOGWALKI APL*APPLE ONLINE STORE APL*APPLE ONLINE STORE APL*APPLE ONLINE STORE APL*APPLE ONLINE STORE APL*APPLE ONLINE STORE PAYPAL *REAQHORSES WINGATE INN WINDSOR PARKE PAYPAL *BLOODHORSEP PAYPAL *REAQHORSES PAYPAL *BLOODHORSEP PAYPAL *BLOODHORSEP PAYPAL *BLOODHORSEP PAYPAL *BLOODHORSEP PAYPAL *REAQHORSES PAYPAL *BLOODHORSEP PAYPAL *LRSDOGWALKI PAYPAL *BLOODHORSEP PAYPAL *REAQHORSES PAYPAL *BLOODHORSEP PAYPAL *REAQHORSES PAYPAL *BLOODHORSEP PAYPAL *REAQHORSES PAYPAL *BLOODHORSEP AMAZON MKTPLACE PMTS AMAZON.COM AMAZON MKTPLACE PMTS AMAZON.COM AMAZON.COM Description Subscription renewal shipped to home address Fictitious payment to fake PayPal Account Bretford MobilePro Desk Combo Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Ergotron MX LCD Desk mount arm 30" MB 13.3/2.4/2X1GB/250/SD-USA RFB IMAC 27/3.06/2X2G/1TB/4670-256MB-USA G-Tech G-Raid V4 4TB-CAF Magic Trackpad - USA Fictitious payment to fake PayPal Account Wingate Hotel Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Air King AK 80 Bath Fan Lutron MAE600H-WH Dimmer Leviton Occupancy Sensor Leviton Timer Switches Aube Programmable Timer Switch Amount 20.00 2,264.10 317.95 1,000.00 1,029.30 2,058.30 2,500.00 1,029.30 411.90 180.15 1,005.94 2,690.28 529.95 146.28 2,574.86 95.09 2,058.30 2,058.30 5,400.00 5,000.00 514.80 2,000.00 2,400.00 3,601.80 1,543.80 3,000.00 1,121.00 3,601.80 2,044.00 4,450.00 1,165.50 4,000.00 148.36 244.72 109.88 63.48 156.45

35

College Of Business Equine Industry Program APPENDIX D Fraudulent Procurement Card Transactions
Item 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 Date 10/27/2010 10/26/2010 10/24/2010 10/24/2010 10/23/2010 10/22/2010 10/17/2010 10/17/2010 10/17/2010 10/15/2010 10/13/2010 10/13/2010 10/11/2010 10/9/2010 10/6/2010 9/30/2010 9/27/2010 9/14/2010 9/9/2010 9/8/2010 8/27/2010 8/9/2010 7/30/2010 7/28/2010 7/23/2010 7/23/2010 7/23/2010 7/15/2010 7/8/2010 6/30/2010 6/26/2010 6/17/2010 6/6/2010 6/4/2010 6/4/2010 5/29/2010 5/20/2010 Merchant PAYPAL *BLOODHORSEP PAYPAL *ZACHRYMYATT APL*APPLE ONLINE STORE APL*APPLE ONLINE STORE PAYPAL *BLOODHORSEP PAYPAL *BLOODHORSEP APL*APPLE ONLINE STORE APL*APPLE ONLINE STORE AMAZON.COM PAYPAL *BLOODHORSEP PAYPAL *REAQHORSES PAYPAL *ZACHRYMYATT PAYPAL *LRSDOGWALKI PAYPAL *BLOODHORSEP PAYPAL *BLOODHORSEP PAYPAL *REAQHORSES PAYPAL *BLOODHORSEP PAYPAL *BLOODHORSEP PAYPAL *BLOODHORSEP PAYPAL *REAQHORSES PAYPAL *BLOODHORSEP PAYPAL *BLOODHORSEP PAYPAL *REAQHORSES PAYPAL *BLOODHORSEP ATTM*876620232NBI ATTM*876620232NBI PAYPAL *BLOODHORSEP PAYPAL *BLOODHORSEP PAYPAL *REAQHORSES PAYPAL *REAQH PAYPAL *BLOODHORSEP PAYPAL *BLOODHORSEP PAYPAL *BLOODHORSEP PAYPAL *REAQH PAYPAL *BLOODHORSEP PAYPAL *RANCHINGFOR PAYPAL *RANCHINGFOR Description Fictitious payment to fake PayPal Account Home Improvement Vendor Cell Phone Apple TV Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Mac Mini Headphones Danze Wall Mount Body Spray Copper Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Home Improvement Vendor Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Portion of Cell phone charges Portion of Cell phone charges Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Amount 4,000.00 4,116.30 316.94 104.94 5,000.00 3,500.00 740.94 83.74 44.40 1,004.60 1,250.00 4,000.00 379.00 3,200.00 2,800.00 2,300.00 2,161.20 1,008.95 1,852.50 1,500.00 1,200.00 1,862.79 1,500.00 1,810.00 169.78 169.41 1,395.00 1,810.00 1,000.00 2,000.00 1,810.00 129.00 1,810.12 1,988.56 1,910.12 2,058.30 2,058.30

36

College Of Business Equine Industry Program APPENDIX D Fraudulent Procurement Card Transactions
Item 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 Date 5/18/2010 4/18/2010 4/12/2010 4/10/2010 4/10/2010 4/10/2010 4/10/2010 4/10/2010 4/10/2010 4/10/2010 4/10/2010 4/10/2010 4/10/2010 4/10/2010 4/10/2010 4/10/2010 4/10/2010 4/10/2010 4/10/2010 4/6/2010 4/2/2010 3/31/2010 3/28/2010 3/28/2010 3/18/2010 3/17/2010 2/25/2010 2/18/2010 2/9/2010 2/3/2010 2/1/2010 1/30/2010 1/29/2010 1/22/2010 1/22/2010 1/22/2010 1/22/2010 Merchant ATTM*876620232NBI ATTM*876620232NBI U OF L CAMPUS TKT OFFICE AMZ*MAGAZINE EXPRESS AMZ*MAGAZINE EXPRESS AMZ*MAGAZINE EXPRESS AMZ*MAGAZINE EXPRESS AMZ*MAGAZINE EXPRESS AMZ*MAGAZINE EXPRESS AMZ*MAGAZINE EXPRESS AMZ*MAGAZINE EXPRESS AMZ*MAGAZINE EXPRESS AMZ*MAGAZINE EXPRESS AMZ*MAGAZINE EXPRESS AMZ*MAGAZINE EXPRESS AMZ*MAGAZINE EXPRESS AMZ*MAGAZINE EXPRESS AMZ*MAGAZINE EXPRESS AMZ*MAGAZINE EXPRESS PAYPAL *RANCHINGFOR PAYPAL *ERICANS20 AMAZON.COM APL*APPLE ONLINE STORE APL*APPLE ONLINE STORE ATTM*876620232NBI PAYPAL *RANCHINGFOR PAYPAL *RANCHINGFOR ATTM*876620232NBI PAYPAL *RANCHINGFOR DELTA AIR0062174056810 PAYPAL *RANCHINGFOR PAYPAL *RANCHINGFOR PAYPAL *ANDERSON CO PAYPAL *CAMERA UNIV PAYPAL *SHOO TIME PAYPAL *HAFEZARTSAN PAYPAL *JESSEANDKIM Description Portion of Cell phone charges Portion of Cell phone charges 2010 U of L Football Tickets (2 seats) The Bark Magazine The Bark Magazine The Bark Magazine The Bark Magazine The Bark Magazine The Bark Magazine The Bark Magazine The Bark Magazine The Bark Magazine The Bark Magazine The Bark Magazine The Bark Magazine The Bark Magazine The Bark Magazine The Bark Magazine The Bark Magazine Fictitious payment to fake PayPal Account Riding Boots Book-Verbal Judo: Gentle Art of Persuasion iPod Nano 8G iPod Nano 8G Portion of Cell phone charges Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Portion of Cell phone charges Fictitious payment to fake PayPal Account Delta flight for personal friend Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Unknown, shipped to home address Camera Size 8 boots Boots & breeches Size 8 boots Amount 169.78 169.47 616.00 14.00 14.00 14.00 14.00 14.00 14.00 14.00 14.00 14.00 14.00 14.00 14.00 14.00 14.00 14.00 14.00 1,278.05 45.00 10.67 157.94 157.94 169.47 2,058.30 2,400.00 169.47 2,000.00 611.00 2,000.00 2,000.00 145.89 269.00 41.46 123.95 21.20

37

College Of Business Equine Industry Program APPENDIX D Fraudulent Procurement Card Transactions
Item 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 Date 1/22/2010 1/22/2010 1/22/2010 1/22/2010 1/22/2010 1/22/2010 1/22/2010 1/18/2010 1/12/2010 1/9/2010 12/18/2009 12/7/2009 11/18/2009 10/18/2009 10/8/2009 9/18/2009 8/18/2009 7/18/2009 6/18/2009 6/3/2009 5/22/2009 11/26/2008 11/26/2008 11/11/2008 11/11/2008 10/16/2008 10/15/2008 10/14/2008 10/7/2008 10/5/2008 10/3/2008 10/2/2008 9/19/2008 9/11/2008 9/4/2008 9/4/2008 9/3/2008 Merchant PAYPAL *MINGBO LUO PAYPAL *ABZTRACT PAYPAL *LADYPR1965 PAYPAL *SBARSENAS PAYPAL *JKMGURNEY PAYPAL *AROSSHOFFER PAYPAL *TLV10977 ATTM*876620232NBI PAYPAL *RANCHINGFOR PAYPAL *GEROM100 ATTM*876620232NBI PAYPAL *RANCHINGFOR ATTM*876620232NBI ATTM*876620232NBI KROGER #752 ATTM*876620232NBI ATTM*876620232NBI ATTM*876620232NBI ATTM*876620232NBI ATTM*876620232NBI APL*APPLE ONLINE STORE LENOVO 2D5NMY LENOVO 2D5NMM APL*APPLE ONLINE STORE APL*APPLE ONLINE STORE APL*APPLE ONLINE STORE APL*APPLE ONLINE STORE APL*APPLE ONLINE STORE APL*APPLE ONLINE STORE AVIS RENT-A-CAR 1 EGENCIA*FEE 2762366333 NWA AIR0127378859293 APL*APPLE ONLINE STORE DRI*MICROSOFT MONEY PAYPAL *ROMANTICTHI PAYPAL *ABOVEALLOUT PAYPAL *RBAKERDOGS Description Helmet 10R Coat Saddle Pad Size 8.5 boots Paddock boots Helmet Riding Gloves Vintage Metal Cartier Box Holder Fictitious payment to fake PayPal Account Appreciation gift for riding coach-Piper Uhl Portion of Cell phone charges Fictitious payment to fake PayPal Account Portion of Cell phone charges Portion of Cell phone charges Trident Portion of Cell phone charges Estimated portion of Cell phone charges Portion of Cell phone charges Portion of Cell phone charges Portion of Cell phone charges USB storage system Flat panel display Mini Dock iMac iMac Accessories 8GB iPod Nano Apple-TV, Nano, 16GB iPod Touch & 32GB iPod Touch 16GB iPod Touch Partial Refund of transaction above on 9/19/2008 Rental Car NWA Flight to Atlanta, GA NWA Flight to Atlanta, GA Parallels, Elgato EyeTV, Extreme Base, IMAC App MicroSoft - Money Plus Home & Business Beige jodhpurs-Hunt seat Lord Taylor White blouse 100% Silk Size 9 boots Amount 32.98 150.00 9.56 56.94 49.99 24.00 8.99 163.97 2,450.00 56.99 692.91 2,150.00 163.97 164.12 1.58 164.12 160.00 163.66 164.26 60.65 222.55 299.19 177.39 1,068.93 174.35 149.00 898.85 299.00 (238.00) 180.88 7.00 585.50 586.95 85.97 29.45 40.35 86.74

38

College Of Business Equine Industry Program APPENDIX D Fraudulent Procurement Card Transactions
Item 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 Date 7/14/2008 6/23/2008 6/18/2008 5/2/2008 5/1/2008 10/1/2007 9/24/2007 9/7/2007 8/16/2007 8/11/2007 7/17/2007 7/5/2007 6/27/2007 6/27/2007 6/26/2007 6/26/2007 6/26/2007 6/19/2007 5/22/2007 Merchant ENTERPRISE RENT-A-CAR WWW.CIRCUITCITY.COM OFFICEMAX CT*IN#509326 AMZ*AMAZON PAYMENTS AMZ*AMAZON PAYMENTS PAYPAL *BLOODHORSEP PAYPAL *BLOODHORSEP PAYPAL *BLOODHORSEP T-MOBILE.COM PAYMENT INSIGHT CABLE PAYPAL *BLOODHORSEP CROSS COUNTRY EDUCATION AMZ*AMAZON PAYMENTS STUBHUB, INC AMZ*AMAZON PAYMENTS AMZ*AMAZON PAYMENTS AMAZON.COM PAYPAL *THEBLOODHOR PAYPAL *AHSILA1 Description Reimbursement check attached, not deposited by Univ. 37" LCD TV, DVD Home Theatre, 3FT HDMI Cable 20" Television per Univ. Reports Godiva Chocolates with Happy Mother's Day Message Baby Einstein Stage 1-7 Pack DVD Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Number on bill was for a land line Cable Fictitious payment to fake PayPal Account Seminars & cont. ed.-therapy/others per website Premium Wellington Boots Navy Unknown, date, city and amount do not match Baby Einstein DVD Gift Set Women's Ithaca Comfort Sandal by Crocs Infactino Matching Colors & Textures Fictitious payment to fake PayPal Account Fictitious payment to fake PayPal Account Total Amount 17.12 1,457.46 623.13 51.45 119.97 950.00 948.05 950.00 66.26 275.79 950.00 278.00 45.48 231.93 59.83 66.49 24.92 950.00 980.00 162,007.74

39

College Of Business Equine Industry Program APPENDIX E Fraudulent Requests for Disbursements using Wire Transfers

Item

Wire Date

Vendor

Description on Fraudulent Invoice

Actual Description

Amount

7/28/2010

JP Westenburg JP Westenburg Total

Reservation fees for Equine England trip. Thirteen airline reservation fees students travel ($615.38) Reservation fees for Equine England trip. Five airline reservation fees travel adults ($1,600).

Down Payment for House in Trigg County, Kentucky (1 of 2) Down Payment for House in Trigg County, Kentucky (2 of 2)

$8,000.00

7/28/2010

8,000.00

$16,000.00

40

College Of Business Equine Industry Program APPENDIX F Fraudulent Purchase Requisitions


Item 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Date Vendor 11/1/2008 Apple Computers Inc 3/17/2009 Apple Computers Inc 8/23/2010 Apple Computers Inc 8/23/2010 Apple Computers Inc 8/23/2010 Apple Computers Inc 8/30/2010 Apple Computers Inc 8/30/2010 Apple Computers Inc 8/31/2010 Apple Computers Inc 2/14/2011 Apple Computers Inc 2/14/2011 Apple Computers Inc 2/15/2011 Apple Computers Inc 2/15/2011 Apple Computers Inc 2/21/2011 Apple Computers Inc 2/21/2011 Apple Computers Inc 8/11/2010 Apple Computers Inc 8/11/2010 Apple Computers Inc 9/15/2010 Equine Riding and Racing Club 9/15/2010 Equine Riding and Racing Club Description per Invoice Protection Plan (3) Protection Plan (2) Apple computer(W8032F34AGU) Protection Plan iPod Touch (2) (1A033ECM75J, 1A033R6B75J) iPAD Case (2) iPAD Keyboard Dock (2) iPAD Wi-Fi & 3 g 64GB (GB034PW1A90) MacBook Air Super drive Wireless Keyboard Power adapter In ear head phones iPhone with dock iPAD Dock Cable AppleCare for iPAD iPAD 10W adapter No support No support No support No support No support 4 room receipts - originally paid by procurement card Mileage 753 miles (2) Mileage 643 miles (2) Amount Program 238.00 Equine Trust Program 239.00 Equine Trust Program 1,699.00 Equine Education Improvement 239.00 Equine Education Improvement 398.00 Equine Education Improvement 39.00 Equine Education Improvement 69.00 Equine Education Improvement 629.00 Equine Education Improvement 79.00 Equine Trust Program 69.00 Equine Trust Program 79.00 Equine Trust Program 79.00 Equine Trust Program 599.85 Equine Trust Program 29.00 Equine Trust Program 99.00 Equine Education Improvement 29.00 Equine Education Improvement 2,500.00 Ky Equine Industry Pari-Mutuel 2,500.00 Ky Equine Industry Pari-Mutuel 5,000.00 Ky Equine Industry Pari-Mutuel 343.55 Ky Equine Industry Pari-Mutuel 130.00 Ky Equine Industry Pari-Mutuel 348.36 Ky Equine Industry Pari-Mutuel 754.00 Ky Equine Industry Pari-Mutuel 643.00 Ky Equine Industry Pari-Mutuel

19 10/22/2010 Equine Riding and Racing Club 20 21 22 23 24 1/3/2011 Equine Riding and Racing Club 1/3/2011 Equine Riding and Racing Club 1/3/2011 Equine Riding and Racing Club 1/3/2011 Equine Riding and Racing Club 1/3/2011 Equine Riding and Racing Club

41

College Of Business Equine Industry Program APPENDIX F Fraudulent Purchase Requisitions


Item 25 Date Vendor 1/3/2011 Equine Riding and Racing Club Description per Invoice Supported by a reservation for 8 rooms on 10/22/10 through 10/24/10 Holiday Inn Express Morehead, KY. Paid to vendor on Check 1807259 Colonels Career Apparel, invoice detail purchase for $44.00 No support included. Magnets (20,000) pd to vendor on ck 0088836 Barn Rent per vendor investment in new business venture Show jumps per invoice - home improvement per vendor Show jumps per invoice - home improvement per vendor Over paid vendor when fraudulent invoice was created. Total Amount Program 1,523.20 Ky Equine Industry Pari-Mutuel

26 27 28

1/3/2011 Equine Riding and Racing Club 1/3/2011 Equine Riding and Racing Club 1/3/2011 Equine Riding and Racing Club

1,848.00 Ky Equine Industry Pari-Mutuel 1,407.85 Ky Equine Industry Pari-Mutuel 3,100.00 Ky Equine Industry Pari-Mutuel 15,000.00 Ky Equine Industry Pari-Mutuel 20,000.00 Ky Equine Industry Pari-Mutuel 20,000.00 Ky Equine Industry Pari-Mutuel 2.70 Equine Education Improvement $79,713.51

29 12/13/2010 Kuchta, Marylee 30 11/2/2010 Myatt, Zachary

31 11/23/2010 Myatt, Zachary 32 11/16/2010 Rea Quarter Horse

42

College Of Business Equine Industry Program APPENDIX G Fraudulent Travel and Expense Reimbursement
Item 1 Posted Date 6/2/2008 Check 0043377 Description on travel documents Coordinator for University of Louisville & Ky Kentucky International Equine Summit Student trip to England Fraudulent Amount $7.69 Program Ky Equine Industry Pari-Mutuel Comment Inflation of actual miles traveled

6/30/2009

0062955

16.53

Ky Equine Industry Pari-Mutuel Intl Ctr IQ Evnt

Inflation of actual miles traveled Actual trip to Ohio for personal reasons Unauthorized Personal

12/22/2009

0071388

Travel to Ohio to meet coordinator of 2009 summit Rolex tickets

864.00

5/27/2010

0079146

90.00

Ky Equine Industry Pari-Mutuel Ky Equine Industry Pari-Mutuel Equine Education Improvement

5/27/2010

0079146

International equine summit World Equestrian Games planning with UK

4.00

Inflation of actual miles traveled Unauthorized travel. Also submitted travel to Prospect on same date as travel to Lexington. Unauthorized

7/22/2010

0082291

900.00

9/2/2010

0084413

World Equestrian Games planning with UK. Attend ERRC show World Equestrian Games planning with UK. World Equestrian Games

466.50

Equine Education Improvement

10/26/2010

0087001

1,875.00

Equine Education Improvement

Unauthorized

10/26/2010

0087001

829.11

Equine Education Improvement

Duplicate from check #0082291 which was unauthorized. Per Director 1 trip to Lexington for the games was authorized.

Total

$5,052.83

43

College Of Business Equine Industry Program APPENDIX H Fraudulent Egencia Charges


Item 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Posted Date 6/30/2007 6/30/2007 6/30/2008 6/30/2008 6/17/2009 6/17/2009 6/17/2009 6/17/2009 6/30/2009 6/30/2009 9/10/2009 9/10/2009 11/17/2009 12/10/2009 12/10/2009 12/10/2009 1/7/2010 1/7/2010 2/11/2010 3/10/2010 3/10/2010 3/10/2010 3/10/2010 3/10/2010 3/10/2010 3/10/2010 3/10/2010 3/10/2010 3/10/2010 3/10/2010 3/10/2010 3/10/2010 3/10/2010 5/18.2010 5/18/2010 6/18/2010 Traveler WARD/ALISHARENEE WARD/ALISHA GUPTON/MICHAELBRIAN GUPTON/MICHAEL AMH-WARD/ALISHA AMHWARD/ALISHARENEE AMH-WARD/ALISHA AMH-WARD/ALISHA AMH WARD, ALISHA AMH WARD/ALISHA WARD/ALISHARENEE WARD/ALISHA WARD, ALISHA WARD, ALISHA WARD/ALISHA WARD, ALISHA WARD, ALISHA WARD/ALISHA WARD, ALISHA WARD/ALISHARENEE WARD/ALISHA WARD/ALISHARENEE WARD/ALISHARENEE WARD/ALISHA WARD/ALISHARENEE WARD/ALISHARENEE WARD/ALISHA WARD/ALISHARENEE WARD/ALISHARENEE WARD/ALISHA WARD/ALISHARENEE WARD, ALISHA WARD/ALISHA SZCZYGIELSKI/THOMAS SZCZYGIELSKI/THOMAS WARD/ALISHA Purpose Louisville to San Francisco Egencia Fee Personal Friend Fee Fee Louisville to San Francisco Fee Louisville to Baltimore W Hotel San Francisco Hyatt Regency, San Francisco Louisville to O'Hare Chicago Fee The Blackwell (Columbus, OH) The Blackwell (Columbus, OH) Agent assist fee Cincinnatian Hotel The Westin, Columbus OH Holiday Inn Express, Columbus OH Crowne Plaza, Columbus OH Canceled Flight fee Credit for canceled flight Canceled Flight fee Credit for canceled flight Canceled Flight fee Credit for canceled flight Canceled Flight Fee Credit for canceled flight 21C Museum Hotel Fee for cancelling flights Fee Tampa to Lexington & return Fee Amount $477.10 7.00 370.19 7.00 7.00 419.90 7.00 243.70 440.07 142.73 134.10 8.00 282.42 141.21 15.00 211.80 123.67 79.39 207.79 281.80 8.00 (281.80) 511.80 8.00 (511.80) 331.50 8.00 (331.50) 289.80 8.00 (289.80) 677.16 32.00 8.00 332.80 13.00 Program Equine Education Improvement Equine Education Improvement Ky Equine Industry Pari-Mutuel Ky Equine Industry Pari-Mutuel Equine Education Improvement Equine Education Improvement Equine Education Improvement Equine Education Improvement Equine Education Improvement Equine Education Improvement Equine Education Improvement Equine Education Improvement Equine Education Improvement Equine Education Improvement Equine Education Improvement Int'l Ctr IQ Evnt F/M Int'l Ctr IQ Evnt F/M Int'l Ctr IQ Evnt F/M Int'l Ctr IQ Evnt F/M Equine Education Improvement Equine Education Improvement Equine Education Improvement Equine Education Improvement Equine Education Improvement Equine Education Improvement Equine Education Improvement Equine Education Improvement Equine Education Improvement Equine Education Improvement Equine Education Improvement Equine Education Improvement Int'l Ctr IQ Evnt F/M Int'l Ctr IQ Evnt F/M Ky Equine Industry Pari-Mutuel Ky Equine Industry Pari-Mutuel Ky Equine Industry Pari-Mutuel

44

College Of Business Equine Industry Program APPENDIX H Fraudulent Egencia Charges


Item 37 Posted Date 6/18/2010 Traveler WARD/ALISHARENEE Purpose Louisville to Tallahassee FL exchanged for ticket listed below (#38) Louisville to Las Vegas Louisville to Las Vegas Louisville to Tallahassee FL used partial credit of $432.09 from previously cancelled flight (#35) Fee W Hotel San Francisco W Hotel San Francisco The Palazzo Resort at the Venetian Hotel Four Points Lexington. Louisville to Jacksonville FL, Used credit of $503.80 from exchanged ticket below (#49) Fee Louisville to Atlanta Fee The Westin Hotel Atlanta Airport Jacksonville FL, exchanged for ticket listed above. (#44) Fee Louisville to Atlanta Fee Total Egencia Travel Amount 432.09 Program Ky Equine Industry Pari-Mutuel

38 39 40

8/17/2010 8/17/2010 9/10/2010

WARD/ALISHA RENEE REITER/KIMBERLY DAWN WARD/ALISHARENEE

967.90 967.90 70.68

Equine Steward Accreditation Equine Steward Accreditation Equine Education Improvement

41 42 43 44 45 46

9/10/2010 9/10/2010 9/10/2010 9/10/2010 10/11/2010 1/25/2011

WARD/ALISHA WARD, ALISHA WARD, ALISHA WARD, ALISHA WARD, ALISHA WARD/ALISHARENEE

8.00 528.84 305.25 290.08 466.08 156.00

Equine Education Improvement Equine Education Improvement Equine Education Improvement Equine Education Improvement Ky Equine Industry Pari-Mutuel Equine Steward Accreditation

47 48 49 50 51 52 53 54

1/25/2011 1/25/2011 1/25/2011 1/25/2011 1/25/2011 1/25/2011 1/25/2011 1/25/2011

WARD/ALISHA WARD/ALISHARENEE WARD/ALISHA WARD, ALISHA WARD/ALISHARENEE WARD/ALISHA WARD/ALISHARENEE WARD/ALISHA

32.00 540.80 13.00 109.75 503.80 8.00 286.20 13.00 $10,119.40

Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Equine Steward Accreditation Ky Equine Industry Pari-Mutuel Ky Equine Industry Pari-Mutuel Ky Equine Industry Pari-Mutuel Ky Equine Industry Pari-Mutuel

45

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