Bad actors within a nonprofit organization can be its most costly lesson. That is why agents from the Washington State Gambling Commission’s Regulation and Enforcement Unit have been busy over the past year, conducting training for 32 groups, with over 325 people in attendance. The educational training provided includes instructor development at the Criminal Justice Training Commission, numerous non-profit organizations, Spokane Police Department Explorers Unit and criminal justice majors at Central Washington University.
Training includes underscoring the critical importance of an active board, creating and following internal policies, conducting internal audits and maintaining an independent management control system.
Unfortunately, failure to follow these policies can result in a devastating loss of resources and broken trust between a nonprofit and its community and membership. In the past few years, several non-profits have lost tens and even hundreds of thousands of dollars to theft. The best way from ever having to go through the experience of having a friend, family member, and/or staff member face charges for defrauding your non-profit is through prevention. You must implement control measures and take the temptation away.
One case involves a non-profit that hired one person to manage all bar and gambling activities, maintain records, and handle all the cash. This person has been charged with stealing over $300,000 over several years. This person linked a personal bank account with the bar merchant account where thousands of dollars from bar revenue was deposited. Cash from gambling activities was uploaded to multiple online personal bank accounts (Cash App; PayPal; Green Dot; Chime; and more). A routine inspection alerted the non-profit to irregular activities, yet the non-profit refused to implement control measures, as they could not believe the person was stealing. It wasn’t until an extended investigation uncovered a massive amount of evidence that the person was removed from their role. This case is still pending with the non-profit county’s Prosecuting Attorney.
While it is difficult to believe that someone that you trust can steal from your organization, ensuring officers and gambling managers have completed the required training and implementing internal controls can prevent financial malfeasance. A recent adjudicated case involves $24,000 stolen from the Peninsula Moose Lodge’s progressive jackpot.
I wish that the case mentioned was an outlier, but it occurs more than non-profit board members want to admit. The majority of nonprofits are run by good-hearted volunteers who are passionate about supporting their organizations' cause. Unfortunately, they are unsuspecting of the one person, on the payroll or not, who has made themselves invaluable to the organization that lacks internal controls.
Our agency’s aim is to stop this behavior before it starts by improving outreach and education. In March, myself and another agent provided pull-tab and raffle training to 12 Federation of Eagles chapters with 81 members in attendance. Conducting this training helps open the eyes of attending volunteers, who see where cracks might be in their system.
If your nonprofit organization or association is interested in having a training session on best practices to protect your gambling funds from internal bad actors, our agency is happy to set up a meeting with our special agents to assist you.
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Special Agent Tyna Antonson has been with the Washington State Gambling Commission for over six years.
