The business manager for the U.S. Coast Guard Academy Athletics Division confessed to embezzling more than $1 million from the school to finance a gambling habit, a confession which came just days before his apparent suicide.
According to an article published in The Day (New London, Connecticut), the fraud had been going on for the past decade, with $1.4 million having been stolen between 2004 and 2009. The academy has no way to determine how much was stolen before 2004, adding that they will likely never recover the funds.
Business manager Alex Simonka arranged to have accounts payable checks paid to his account. He then used the money to gamble. To conceal the evidence, he created false checks that appeared to be payments to legitimate vendors.
The fraud went undetected for years because of the academy’s insufficient accounts payable controls. According to the article, the athletics division had “ad hoc” accounts payable processes that lacked proper segregation of duties and effective oversight of funds.
Coast Guard officials discovered the fraud in August 2008, when the Government Accountability Office reported that there was potential wrongdoing in the department. They began questioning Simonka in March of 2009.
His body was recently discovered in his car with a gunshot wound to the head. Authorities ruled the death a suicide.
