Risk Management

Accountant Stole School Funds to Buy Guns, Feds Charge

Oregon education department employee's scheme diverted nearly $1m of U.S. money for his online arms business, a house, and a car, it's alleged.
Stephen TaubFebruary 12, 2008

Federal prosecutors charged a former Oregon Department of Education accountant with diverting $925,000 of U.S. funds intended for charter schools and school-based anti-drug and health programs, and using it for his online guns and ammunition business and personal purchases.

Brent Crosson was accused of fraudulently shifting much of the embezzled money into CGA Wholesale, an online gun dealer that he controlled, according to an Associated Press report that cited court documents filed by the U.S. Attorney’s office. Crosson was fired as the department’s director of accounting services last August, after an anonymous tipster reported that the accountant may have stolen public property, according to The Oregonian, the Portland newspaper.

Deputy schools Superintendent Ed Dennis said that federal investigators have recovered $750,000 of the money and expect to recover the rest, the AP said.

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The law office representing Crosson said it was declining to respond to questions. But officials at the state education department said he was likely to accept a plea deal, according to the news service.

Crosson reportedly used his knowledge of the agency’s accounting procedures to issue payments to CGA Wholesale. He then allegedly transferred funds from the company’s accounts to his personal accounts.

“I am neither judge nor jury, but if Mr. Crosson is convicted, I hope the penalty is severe,” state schools Superintendent Susan Castillo told the AP. “We have made some changes…in order to ensure this can never happen again.”

According to The Oregonian, Crosson bought a $25,000 convertible sports car and a $542,000 home with some of the money. The paper said that Crosson apparently forged documents to make CGA appear a legitimate vendor to the education department, causing employees to enter payment requests without noticing anything amiss.

In addition, funds did not appear to be missing at all, since Crosson deliberately miscoded it as overpayments due to be refunded before the money was entered into state accounts, according to the report.

This is not the first Oregon state agency to be victimized by fraud. The AP noted that Fred Monem, the former food services administrator for the Oregon Department of Corrections, last year was indicted on charges of conspiracy, fraud, bribery ,and money laundering.

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