Question

An individual is appointed as the guardian overseeing 1.3 million dollars, awarded to the parents of a minor child. The guardian is required to file annual reports with the courts and guardianship tax returns, which he does. The bank statements show the proper balance, less any expenses-$40,000 for a down payment on a house; $25,000 for a van; and other monthly expenses, which are paid for, per the guardianship agreement. All court documents and tax records involving the guardianship are up to date in the court files. During a five year period, all the money is gone. The expenses do not add up to 1.3 million dollars.

What and how does he remove the funds, with all the documentation, and without anyone knowing a fraud occurred?

Please analyse the case.

Answer 1

Analysis of the case :

1. First of all , we will have to study the Agreement between the Guardian and the Minor Child.
2. We need to ensure that the person , who has been appointed as the Guardian and the person who has signed on the Agreement is the same person . For this the Original Agreement and the supporting documents , showing the identity of the Guardian has to be cross verified. May be there are forged signatures of the Guardian by somebody else ,who did the fraud.
3. Secondly , the authorization with Banks to be scrutinized. It should have the same person as signatories as Guardian and there should not be any mismatch between the signatures by Guardian on the Agreement and the Authorization Letter with the Bank.
4. It is possible that the Guardian forged the Authorization letter with the Bank , in coordination with some Bank employee and changed the documents with forged signatures.
5. It seems to be collusion with Banking person , who might have , managed wrong bank statements , showing only valid transactions but in reality , the funds were outflowing but never recoded in the Bank Statement , presented to the Guardian.
6. The Guardian , managed to withdraw money , with his signatures but managed his accounts as well as Bank statement , with the help of Banking persons to show the correct picture.
7. It is understood that nobody audited the Accounts of the Minor Child during last five years as it would have resulted into discovering the fraud and mismanagement.
8. It is also possible that the Guardian opened a parallel bank account to manage his illegal withdrawl with bank , while keeping the main account , intact.
9. The Guardian might have opened another Bank Account , with another bank and doing the illegal transactions , there only while for Accounting purpose, might be using the first bank , showing the genuine transactions only.
10. The Guardian might have showed that a sum has been kept as Fixed Deposit into another bank , keeping the minimum required for day to day expenses and forged the money from the second illegal bank account opened for this purpose only .
11. By using the second bank account , he managed that the Original Bank account is maintained genuinely and matching with the routine monthly expenses for the year.
12. He might have furnished the Original Bank Account transactions with the record of genuine monthly payment details , maintained over the year , to the Courts and filed the Guardianship returns.
13. He might have presented a forged bank statement for a false Fixed Deposit for the forged money and managed it by forging the printing etc by himself.
14. He managed to file all the returns , regularly so that there is no scope for any doubt for any fraud being carried out.
15. Various possibilities have been explained above to analyse the fraud.