Earmark Podcast | Earn Free Accounting CPE

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Blake Oliver: [00:00:00] If you'd like to earn CPE credit for listening to this episode, visit earmark Cpcomm. Download the app, take a short quiz, and get your CPE certificate. Continuing education has never been so easy. And now on to the episode. I have the privilege to be joined today by the host of the Oh My Fraud podcast. We've got Greg Kite. Greg, how you doing?

Greg Kyte: [00:00:28] I'm doing fantastic. How are you doing?

Blake Oliver: [00:00:30] I'm doing great. Your shoulder holding up.

Greg Kyte: [00:00:32] It's. It is. I'm sling less today. I had shoulder surgery four weeks ago, and I supposed to be in a sling for two more weeks, but I'm turned into a horrible patient, so.

Blake Oliver: [00:00:42] Fantastic. Well, I'm glad you're feeling better. And we've also got Caleb Newquist, the other host of the Oh My Fraud podcast.

Caleb Newquist: [00:00:49] Hey. Hello, everybody. Great to be here.

Blake Oliver: [00:00:52] We are so excited to be presenting to you today, to be talking to you about government frauds, because I'm a producer of the Oh My Fraud podcast, and I think we are now up to over 60 episodes. And across those 60 episodes, there are at least seven that focus specifically on government fraud. I went through the archives, I found municipal fraud. I found military fraud, I found lottery fraud. And we're going to talk about all of those frauds today. Um, school district fraud. Let's not forget that what they have in common, what government accountants can learn from them, hopefully, how we can, uh, prevent and and stop these frauds, perhaps from occurring in the future. So, Greg, Caleb, I want to get right into this. And I think we have to start with the grandmother of all frauds when it comes to municipal fraud. The case of Rita. Um, what was it?

Greg Kyte: [00:01:51] Rita. Crundwell.

Blake Oliver: [00:01:52] Rita. Rita. Crundwell. The case of Rita Crundwell in Dixon, Illinois, a town with a population of 15,000 people. One woman, Rita Crundwell, managed to pull off the largest municipal fraud in history, stealing over $53 million. Yeah. And this is one that our, you know, attendees today, our listeners may already be familiar with. I want to I want to like I want to start with you, Caleb. Can you give me, like, like the most shocking thing about this, uh, fraud to you?

Caleb Newquist: [00:02:20] I, I think the most shocking thing about this fraud, and there's lots to choose from, but I think the most shocking thing is how long she was able to carry it on. I think if I recall, she started the fraud in 1990, and by this point she had been working for the city of Dixon for keep me honest, Greg, I think she'd been working at the City of Dixon for 20 years by this point. Yeah. So that's right. Yep. And then it carried the she carried on the fraud for, uh, just over 20 years. About 21 years. So I think the two, the two, there's those those are two good things that I think are, uh, especially surprising about this case, which is the length of it. 20 years is a long time. Not many frauds go. Almost no frauds go that long. But also, I think it's it's kind of perplexing that she worked somewhere for two decades before she started a fraud, and then she spent another two decades perpetrating a fraud. Uh, that is that's a very unusual aspect of this case. Um, continually fascinating. And, uh, gosh, I don't know. That's it. The biggest municipal fraud in the history on record is, um, is no small feat. So. Yeah, that's that's what I got for that.

Blake Oliver: [00:03:41] And what she did with the money is, is kind of amazing too, because it was so obvious to anyone who lived there that she had a lot of money, or it should have been anyway. Right? What was how many horses did she own? Greg?

Greg Kyte: [00:03:56] Oh, it was a it was a bazillion. It was. Yeah, she was, she was the premier, uh, quarter horse breeder. Um, really? Really, from From what I understand of. Or one of at least we can easily say she was one of the premier Quarter Horse breeders in the entire United States. So she had I it was it was over. I think it was like 150 horses that she had. And obviously, you know, she, she, she was buying and selling. So her inventory went up and went down over time. But I think an interesting thing that you were kind of getting at is we see one of the biggest behavioral red flag for fraud is someone living beyond their means. So if you're a if you're a municipal comptroller, you likely don't have the money to fund some kind of Quarter Horse breeding empire. But the problem with that, and this was the cover that Rita used, is a lot of people were thinking, oh, she she's got all the money because of the Quarter Horse empire. And that's why she's got, you know, the nice house, all the horses, all the equipment she needs to to take care of the horses.

Greg Kyte: [00:05:02] But we've seen this in multiple frauds where the question isn't so much like, you can go, okay, how does she have all the money to do the Quarter horse stuff? And she's like, the Quarter Horses pay for that whole thing. The big question is, why in the hell are you still stay sticking with your $30,000 a year city controller job? If you're making millions of dollars and you know you're able to buy, you know what? Just even like the motor home that she'd tool around in to take care of the horses when she'd go on her exhibitions and stuff, is, you know, an unreasonable amount of money for stuff like that. So the and we saw that also in a, a cake, a fruit cake fraud. There's a bakery in Corsicana, Texas. Same thing where the guy said he inherited all this money. That's where he got. He was able to get private jets and do stuff like that. But it's like, so why are you still keeping your $45,000 a year job as a controller for a bakery?

Caleb Newquist: [00:05:57] So clearly the love of it, Greg, really the love of it, which.

Greg Kyte: [00:06:01] Again, that's probably the answer that they give is it's like, well, you know, I need you know, I think especially the Corsicana thing is you can go, I got all this money, I could just sit around on my butt all day, but I need something to keep me busy. But with Rita Crundwell, she's got so much other stuff to do that it's like, no, you don't you. This is a silly thing. But yeah, I guess City Pride kept her there. That's probably was her answer.

Blake Oliver: [00:06:24] So and also perhaps the need to make sure that nobody ever found out about this fraud. Because I understand that she created a fake bank account called Reserve Sewer Capital Development Account. Yep. To divert the city funds, which is the perfect name for an account that you don't want anyone to look at, right? That has all the crap in it. Yeah. And. Yeah. And and so she diverted funds into the secret bank account, and then she would intercept the bank statements. So nobody knew this thing existed. Yeah. And that's how she got caught. Is that a city clerk found the statements. Right. And. Yeah, said something about it.

Greg Kyte: [00:07:02] Yep. Caleb, you want to take that part of the story? Yeah.

Caleb Newquist: [00:07:05] So the her, her colleague, um, uh, whose name I believe is Kathy Swanson, and she was preparing for, I believe, a presentation to the city council or county commissioners. And when she called the bank for, uh, she needed she needed all the bank statements for all of the city's accounts. Uh, Rita's the account, the the fake account that she had created was a real account. And it was with the same bank as all their other accounts. So when Kathy put in the request for all of the bank statements, the bank sent her all the bank statements, which included the legitimate phony account. And so that's when she was able to see, like, these large transactions that were coming through. And for example, I remember, um, something like she saw payments for, uh, like, uh, for gasoline, for example. And the city had their own pumps. So, like, city workers wouldn't have to, you know, they could, they could they could fill up their, their their work trucks or their work vehicles. Um, uh, from a source that the city had for, for gasoline. And so why, if that was the case, why would Rita be paying for gas with this account? And so it became plus.

Greg Kyte: [00:08:34] Plus sewer systems don't use a whole lot of gas. So that's also kind of kind of a tell.

Caleb Newquist: [00:08:40] Yeah, maybe maybe so. But in any.

Greg Kyte: [00:08:42] Case there are there are those there are those diesel powered sewer, uh, sewer lines. So you got to keep that into consideration.

Caleb Newquist: [00:08:48] In any case, it became clear rather quickly that something very bad was going on. Yeah.

Greg Kyte: [00:08:54] Plus the other thing about that, Kathy. So Kathy Swanson, the person who discovered the fraud, worked for Rita. Rita gave her strict because the other question that maybe people are thinking is, well, why didn't Kathy get these bank statements along? Just going to a bank and saying, give me all the statements. That seems like something that should happen all the time. But no. Rita gave Kathy very strict orders where she was like, when you request bank statements, you request specific bank statements and you give them the bank account number and that. And so just this one time, Cathy was in a big crunch to prepare some reports for a meeting or something like that and was just like, I just give them all to me. I need a I need them all. Don't don't make me tell you all the account numbers. And that's which is also weird that it took 40 years for or, you know, 20, 20 years for someone to be in a hurry in Dixon.

Blake Oliver: [00:09:42] Well, it's small town. Things move at a slightly slower pace, so perhaps that's why. Um, I'm curious to know if you two have any ideas of how a town like this or a city like this that's small. Could have implemented internal controls to prevent this sort of thing from happening, because that seems to be the main issue with a lot of these frauds. There's they have that's the.

Greg Kyte: [00:10:03] Yeah, you're exactly right. Internal controls were missing. Rita Crundwell. She held she she could do anything she wanted with any of the finances for the entire city of Dixon, Illinois. So that that absolutely was the case. One of the things that we talk about a lot on the fraud is that they, the city was did have a requirement to have an annual audit by an external auditor every year. And that was who was that? It was, uh, Gunderson who was the.

Caleb Newquist: [00:10:29] At the the firm.

Greg Kyte: [00:10:31] Clifton Gunderson.

Caleb Newquist: [00:10:31] It was a predecessor to Cliftonlarsonallen, uh, which was Clifton Gunderson.

Greg Kyte: [00:10:36] Yeah, yeah. And so but that's the thing is, so many people look at external audit as an internal control. And right there you should go. Well, it's not because external audit isn't internal control. But the other thing is and this is the thing, don't never expect your internal auditors to catch fraud. Because according to the Association of Certified Fraud Examiners, uh, only 3% of frauds are caught by the external auditor. Compare that to 7% of frauds that get caught by accident. Uh, and you will find out that think about. So 7% get caught by accident, 3% get caught by the external auditor which says mathematically that fraudsters are 4% dumber than external auditors are good at their job. So you're just not going to. It's not an effective internal control period. So don't rely on that to catch your fraud. You have to actually have I mean, the minimum thing in Caleb back me up on this. We it seems like almost every fraud that we deal with is, is just basic separation of duties. Would have would have prevented the fraud. And that was the that was the case with Rita too.

Caleb Newquist: [00:11:49] It it comes up on virtually every episode. And I think the I think the, the, the stories we've done on municipalities, I think it's the vulnerabilities are just very, um, the vulnerabilities are very acute, like they're very severe. And you have you have one person, you either have a very small team of people or maybe it's only, uh, um, uh, or you have a person who, in the case of Rita, uh, in addition to a small team of people, you have one person who controls virtually all of the duties that are required. So doing reconciliations and, um, cutting checks and making approvals and all those things. And so that concentration of control really leaves municipalities and other small organizations vulnerable. And so I11 of the things that Dixon, the city of Dixon, did in the aftermath of this case is, uh, despite its size, they did implement, uh, more, I guess I they have strict adherence to the implemented separation of duties that they, they eventually put in after the fact. And I mean, of course, that's by this time it's it's too late. But yeah, uh, it's a hard lesson to learn. Um, but it, but it is a cautionary tale for, for any municipality or the any, any kind of government organization that's in a similar situation.

Greg Kyte: [00:13:15] Yeah. And, uh, the fact that Dixon, Illinois was so small added to the to the the lack of internal controls because Rita just went to the bank and was like, hey, I need to open another account. And the bank was just like, cool. We know Rita. We know she's the comptroller for the city. Everybody knows Rita because everybody knows every everything. Rita wouldn't want to open account unless she needed an account. So let's just do it. And that's why it was a secret account. So the bank was actually held liable for some of the loss that that that Dixon, um, uh, you know, suffered and, and had to pay some restitution to the city because the bank should have just been like, yeah, that's cool. We gotta make sure the mayor knows about does the does the. Because the assumption was the mayor knew about it, it was legit. But it wasn't because again, you've got small town vibes going on there. And I know we're presenting to the Atlanta Association of Governmental Accountants, and Atlanta is one of the smallest cities in the whole country. So really that's a that's a big takeaway I think, for anyone who's listening to this.

Blake Oliver: [00:14:18] Well, speaking of small towns, we've got an even smaller municipality. Well, I don't even know if they're municipality. Anson, Maine, population 2500. We call them a town in the episode, and the story is about Claudia Viles, the town tax collector for, gosh, another person holding a job for a long time, 33 years. She started before I was born. And, uh, in 1982, um, over $500,000 confirmed fraud. But it could go way more than that because the statute of limitations had expired on a lot of this stuff. So she was only prosecuted for like, what, a year of her frauds?

Greg Kyte: [00:15:00] I think it was seven, seven years of a fraud. So seven years it was $500,000 that they that they found that she that she had stole a little over $500,000 and, and yeah, they, she had she had held this the position she was she was elected to the position of city tax collector, which I go that's, I mean, I don't know, maybe maybe it seems like in the western United States having any you know, they elected.

Blake Oliver: [00:15:24] Tax collector is a bad idea.

Greg Kyte: [00:15:26] Right. Well, like we just call it like the officer, the office of the Treasury of the of the state or the county or something like that. Tax collector. Seems like it's a little bit more archaic of a term. You know, I kind of go wasn't you know, when I, when I think of tax collectors all of a sudden I'm thinking that's the second most. That's the second. That's that's the second favorite profession that Jesus liked to hang out with. So, um, that's how that's.

Blake Oliver: [00:15:51] An interesting.

Greg Kyte: [00:15:51] Point that.

Blake Oliver: [00:15:52] That title in, in, uh, I live in Scottsdale, Arizona. And, you know, we're having elections right now, and I'm seeing signs for a CPA who's running for treasurer. And I'm thinking to myself, do we really want the public evaluating the credentials of the person that's going to be the treasurer of our city. Like, is that something that the public is really, you know, able to do? But I guess that's very common.

Greg Kyte: [00:16:12] You mean wait, wait, you mean like by by the fact that they're being very explicit that they are a certified public accountant? I'm just.

Blake Oliver: [00:16:18] Saying, like the fact that these positions are elected, I mean, you could get somebody in there who doesn't know anything.

Greg Kyte: [00:16:23] Right? Yeah, right. Oh, so you're saying the fact that somebody could get that the the treasurer position and have zero background in, in finance or accounting. Yeah. That's a little troublesome. Yeah for sure.

Blake Oliver: [00:16:35] So do we know if Claudia was a is she is she an accounting professional.

Greg Kyte: [00:16:39] Uh, yes. She got I think she got her associates in accounting. Um, so she did have some background in that she was very tech, uh, like, delayed, I would say technology delayed.

Blake Oliver: [00:16:55] Yeah. Because the fraud was done with, uh, adding machine tapes. Yeah.

Greg Kyte: [00:16:58] And and typewriters. Yeah. She, she didn't she, she was not using a computer at all for her job until like what was it, 20, 2012 I think. Yeah. Yeah, yeah. So um, yeah. And it's kind of like I, you know, I what I was, I was teaching, so in a former life, I was a middle school math teacher, and, uh, yeah, 2012, I was already I was already I like, like we were our kids all had to know, like children knew how to use computers. So, you know, the fact that someone in a, in an official capacity within the municipality wasn't using one at all, you know, is is a little boggling.

Blake Oliver: [00:17:39] So, so so there's something interesting about this fraud in addition to those tapes, which is that Claudia was known as the Mother Teresa of Anson. Absolutely. Is that is that a name you gave officially?

Caleb Newquist: [00:17:53] I think that's unofficial. Yeah.

Greg Kyte: [00:17:56] Hopefully it's six. Yeah, I think we gave I think we made the comparison.

Blake Oliver: [00:18:00] So so this this raises another interesting theme that that a lot of the frauds you talk about on your show have in common, which is that they are perpetrated by often very charismatic people who are beloved in the communities in which they operate.

Greg Kyte: [00:18:12] Yeah. Yeah.

Blake Oliver: [00:18:14] So tell me about Claudia and like how she I mean, there there's people that still think she's innocent, right?

Greg Kyte: [00:18:20] Yeah. And she and she still claims innocence herself, which is. Which is very interesting. Um, but she, uh. Which I guess people wouldn't claim that she's innocent if she didn't claim she was also innocent. But, uh, what was interesting with her case is when that went to court, she had about 50 people from the city of Ansan who submitted letters to the court that were backing Claudia's character. And they gave all these, like, amazing stories of her just being a wonderful person from, you know, like just caring for people who were going through tragic times, like, you know, she would she would take dinner to people who were suffering from cancer. She would she, she would organize like road trips with, with the some other people in Anson where they would go somewhere and just do service projects. It's like, hey, let's go. Let's go somewhere and, and, uh, you know, plant flowers or stop homelessness or, you know, I'm not they didn't they weren't specific what the service projects were, but that that's the kind of person she was. And she, she went out of her way to even help people, uh, through because because city tax collector. What she did is she basically collected registrations, like Caleb. What was it for? For airplanes and cars and RVs.

Caleb Newquist: [00:19:40] Yeah, yeah, yeah, yeah, recreation. A lot of recreational stuff.

Greg Kyte: [00:19:43] Right. And again, you're going. It's a city of 2500 people. So I'm, I'm doubting she collected a lot of airplane registrations for that. So it was basically car registration. But they've got these stories of people coming over to our house on Christmas Day because they noticed that their, their tags were, were expired. And she was like, cool, come on in. Have a muffin. I'll I'll take care of your tags. So she went above and beyond to take care of of the the city. You know, to to do her her job and to to take care of the constituents. I guess maybe not take care of the city since she was stealing a half $1 million. Uh, you know, arguably much more than a half $1 million.

Blake Oliver: [00:20:19] Um, you know, she's a constituent, too. She's taking care of herself.

Greg Kyte: [00:20:22] She she was taking care of one constituent, for sure, for sure. But she even had this idyllic, like, people were talking like her husband was like, we're we're we're madly in love. She's my best friend. Without her, I couldn't do. And I know her better than anyone. And there's no way she could do this. So, I mean, it was really this glowing picture. And one of the striking things about this to me, and we cover this in the episode, is again, going back to the Association of Certified Fraud Examiners report to the nation, where they cover tons of statistics about fraud, is they claim that 15% of fraudsters exhibit no red flag behaviors like, you know, like living beyond your means or having family problems or having some kind of, you know, uh, addiction problems or having a Wheeler dealer attitude. Like they list probably 25 different red flag behaviors. And, and when I and I've seen that for years for multiple reports where they say some people have like Caleb, we always joke about, it's like irritability, uh, defensiveness and suspiciousness. Yes. Those three adjectives are one of the red flag behaviors. And I'm like going, that's me every day. Yeah.

Caleb Newquist: [00:21:29] If anyone if anyone on if anyone on the the broadcast today isn't exhibiting any of those behaviors uh daily. Um right then I guess, I guess I guess we won't be looking for looking to you for fraud, right?

Blake Oliver: [00:21:44] Well, Claudia wasn't right. She was right. Everyone liked her, right?

Greg Kyte: [00:21:47] So. And that was the thing. So it was kind of cool. I thought to to go, okay, we actually did find one person who seemed to have to be exhibiting none of the red flag behaviors of fraud, which, again, is why so many people had her back and were like, we don't believe this possibly could have happened with Claudia.

Blake Oliver: [00:22:07] Before we move on from Claudia. I want to understand the nature of this fraud a little bit, and how maybe an internal control could have prevented it. I'm assuming it's going to be, again that there was not separation of duties. What was the. Caleb, do you remember the details of this? Like what was the what was she doing with the adding machine tapes?

Caleb Newquist: [00:22:22] Well, she was what she was doing is like she was making the collections. And Greg keep me honest, but like, she was making the collections and then the tapes were basically the tapes were um, uh, were uh, they did not include the amounts that she was setting aside for herself. Well, no. Yeah.

Greg Kyte: [00:22:43] They'd be yes and no.

Caleb Newquist: [00:22:44] Yeah. And but the total the total would match the, the expected total. But the numbers, the deposits, the actual deposits were made would not. And so the tape where the tape, the tape would just show you the expected total. And we talk about this in the, in the episode. But essentially if an audit had been conducted and I don't remember the regularity of the audits of the tax collector's office, but if anyone were would have footed the tape, they would have realized that the the math didn't work. So if the math doesn't math, then you would of course investigate further. But that never happened. And so that was how she was able to hide it. Uh, which is really remarkable because she was able to hide it for so long. That's. Yeah, it's kind of again, talk about mind boggling that that.

Blake Oliver: [00:23:36] Is so not it should have caught this.

Greg Kyte: [00:23:38] Should have an audit.

Caleb Newquist: [00:23:39] Would have uh would have hopefully easily have caught it uh, simply in like the most basic of procedures too, which is just to if you, if you get a as a as everyone on the call probably knows when you get a, when you get a document from a client, one of the first things that you do is you you put that schedule right, you add it up or you redo the math, right? And, um, that in this case, if they would have, uh, added up the tapes, they would have realized that the math didn't work.

Greg Kyte: [00:24:06] But again, like we said, you can't trust the external auditor to do the job of of implementing internal controls. The other problem is she had she was the one who collected the payments. And obviously, especially when we're talking, uh, someone who didn't use a computer, obviously there was there was there was going to be plenty of checks. And I don't think she could have done that, but I, I imagine the money she she took was the cash payments that she skimmed that off of there. Um, but but again, there was just no, there was no internal controls because that's one of the basic things is you have one, one person do the recording of the accounting. You have another person who handles the assets. And when you're talking about cash, you definitely need to have those into somebody. Somebody different needs to take care of cash than the person who's doing the accounting. So she was doing both. So it was it was just it was right there. And again she had that position for over 30 years. She only got in trouble for the last seven years, 6 to 7 years of that job. And you kind of wonder how long she was taking cash payments until she was like going, you know what? I could just, uh, I could just, uh, pocket that part. And, uh, that's like I said, so eventually that's what she did. And and again, because no internal controls.

Blake Oliver: [00:25:17] And there's no reason not to have at least that separation of duties separate whoever handles the cash. Yeah. From whoever handles the reconciliations. And we talked about this.

Caleb Newquist: [00:25:26] We talked about this. I think it was in the I don't remember if it was the Rita Crundwell episode, but we've talked about it where it's like you don't necessarily I think and I don't know, maybe people have different opinions about this, but like the separation of duties, you don't have to have like finance or accounting experts doing certain duties, so long as they are, as long as they sit with different people. So for example, in the, uh, in, in the, in the case of Dixon, the mayor, for example, could have been required to or someone else, someone who's not Rita could the the the requirement could have been that someone else had to approve all of the payments that were being made. And, um, that is something that anyone can do. Someone can review a list of transactions, like, here's all the checks that I need to cut this week, and someone in some kind of administrative role could just be like, could review it and say, okay, all good. As long as they are committed to the act of the monitoring of the review and just asking questions like saying, I've never seen this vendor before, what is this? And just asking simple questions like that. Something like that could be could be enough to deter someone from ever trying anything, and that's that. And again, no one needs to be a finance expert or an accounting expert. They can just be someone whose duty it is to review those things, ask questions when things look different than they're used to seeing, or just asking lots of questions in general about the payments that are being made.

Greg Kyte: [00:27:02] And the excuse is and an excuse is valid for a city like Anson, Maine. Like you said, it's never top 2500 people in on any census ever. So it's a tiny town. So they go, we just don't have the resources to be able to implement internal controls. It's like but but you do, you know, and also because if with a half $1 million that you lost, you could have easily paid someone to just, you know, do the cash deposits kind of thing.

Caleb Newquist: [00:27:30] So I'll just I'll just bring up one real, like real life example from my own experience, which is my mom used to work in the treasurer's office of, uh, the county where I grew up in, in central Nebraska. It's like my hometown in central Nebraska. Is is basically Anson, Maine. It's like the population is the same. It has never been over 3000 people. Same kind of like, you know, essentially fact pattern. And in that treasurer's office, if I, if memory serves me right, there were at least three people working in that treasurer's office, my mom, and then at least two others, maybe three. And this was at the courthouse in the town square, like Americana, like total, total, total Americana. And and I just remember it's like, and when I think about that and I think about, you know, the what you just pointed out, Greg, is like, oh, well, you know, we we don't have the resources to do, uh, separation of duties. I'm like, there's three people working in Valley County, Nebraska, Treasurer's office.

Speaker4: [00:28:30] Right? Right.

Caleb Newquist: [00:28:32] Collecting and doing all these things. Like, there's got to be someone, someone go, go, go down to the go down to the clerk's office or go down to the, the, the, the, the, the, the county attorney's office or somebody and just ask them to review the checks that somebody wants to cut. I mean, there's there's someone somewhere that could fulfill that duty.

Speaker4: [00:28:53] And even.

Greg Kyte: [00:28:54] Guys even even update it says one last thing. Even updated systems like can, can, can be an internal control, because that's what caught, uh, Claudia Viles was they eventually were like, hey, you need to use a computer, here's some software. And then all of a sudden they're going, wait a second. The numbers in the computer don't match the numbers in the bank. And then. And then it was over. That was that was all it was it. So yeah. So even even sometimes it's just invest in in systems or invest in some technology. And that could also do it.

Blake Oliver: [00:29:23] All right. We got more frauds to cover. I'm going to let you guys choose the next one. Do you want to do the lotto fraud or do you want to do the Navy contracting fraud?

Speaker4: [00:29:30] Oh, I.

Greg Kyte: [00:29:30] Love the Navy contracting fraud. Is that okay, Caleb? That's. Yeah, it's.

Caleb Newquist: [00:29:35] Fine. Of course we'll.

Blake Oliver: [00:29:36] Get to both. We'll get to both. Fat Leonard. Fat Leonard.

Speaker4: [00:29:39] Fat Leonard.

Blake Oliver: [00:29:40] Was he known, uh, by his friends and family as Fat Leonard? Or is that something that, uh, you guys came up with? Oh, no.

Greg Kyte: [00:29:47] No, no, that's that's definitely that was his. That was his nickname that was used throughout the because he was a contractor to the Navy. So he was a Department of Defense contractor and he that. Yeah, it everybody was like, yeah, fat.

Blake Oliver: [00:29:59] Everyone called him fat Leonard. That's admirals are calling him Fat Leonard. Yeah, yeah.

Greg Kyte: [00:30:02] Yeah yeah, exactly. Yeah. A Francis what is it. What's his. And now I won't even. Francis Leonard Gibson, I think was his full name.

Blake Oliver: [00:30:10] Was his name, uh, Leonard. Glenn. Francis.

Greg Kyte: [00:30:12] Leonard. Glenn. Francis. There you go. So fat. Fat Leonard. Um. And he, uh. Well, go.

Blake Oliver: [00:30:18] Ahead. I was going to say I was just going to give the details of this fraud. Right? He ran a company called Glenn Defense. Marine Asia, provided services to US Navy ships and Asian ports, and he engaged in a massive bribery and corruption scheme that lasted for years, involving numerous high ranking US Navy officers. Something shocking about this. It's the first time an admiral was ever, uh, was he convicted? An admiral was convicted on federal charges for bribery. Yeah. Um, and and I'll let you guys discuss the scheme. How did, uh, fat Leonard skim his share? His unfair share of taxpayer dollars.

Speaker4: [00:30:57] Right.

Greg Kyte: [00:30:58] You want me to take to handle this? Well, I can.

Caleb Newquist: [00:31:00] I can talk about it just in real general sense, like this. This is this is this was one of Greg's favorites. And so. Yeah, but but so I'll, I'll get in some words while I can. But one of the main things that he did was that he was he, he did everything for, um, when, when these ships would come to port, like, there's all these things that they need, right. And the one that is so memorable to me is that they needed water so they would fresh water. Yeah, they would need fresh water. So on the ships and so and they're not going to, they're not going to like dock it right next to, you know, the, the, the, the, the water station, um, where, where they bring in the pit. So they have to have little dinghies or whatever that, you know, travel back and forth and, to, to, to carry supplies. And one of the things was fresh water. And he would charge for these services, right. As a contractor. He was like they would they would arrange to have certain services performed and he would do them security, you name it. And um, but what what ended up happening was.

Speaker4: [00:32:02] That.

Caleb Newquist: [00:32:03] He would invoice, uh, for these services, and he would be charging exorbitant amounts for these services when compared to, like, what they were, you know, being charged elsewhere. So there, I don't know, 2 or 3 times. Um, and Greg, do you remember the details of the water one? Yeah. It seemed like that there was some there was some very specific details about that. Yeah. Where someone was reviewing it and said, this is impossible. We can't hold the ship, can't hold as much water.

Speaker4: [00:32:33] As you're.

Caleb Newquist: [00:32:34] Saying that you brought.

Speaker4: [00:32:35] Us.

Greg Kyte: [00:32:36] Right, right. Exactly. Yeah. That's that was one of the which which was one of the, one of the many times that a that that something like that surfaced and was then just flatly ignored where it's like, just shut up and don't worry about it and pay the invoice because here's, because here's the the way that Leonard that fat Leonard was able to give these inflated invoices was. First off, dude was amazing at what he did. He like he was he what? He got these they were called Bravo Zulu's, which were like letters of commendation from high ranking people within the Navy because he did such a great job because here he so he was he would did a great job. He did a lot of dirty work that the that the Navy just didn't want to do when their people were at foreign ports. So like, he would have like and so and just to prep everybody some of this is super cringey and not really easy to hear, but like you'd have sailors who would be on shore for R&R time because they'd been at sea for whoever knows how long they'd get in some huge bar fight, or they'd be taken to jail for some sort of sexual assault, and the Navy would be like, we need those guys out of there. But we we don't want to be the ones who are paying off the local police to get our people out of the Hoosegow so fat Leonard be like, I got you.

Greg Kyte: [00:33:51] And he'd go and he'd take care of it, and he'd just add it to his invoice and they'd be like, that's awesome. We don't want to get our hands dirty. This is a guy who'll get his hands dirty for us. That's amazing. And then, so he was already providing services above and beyond what, uh, what what would be expected to the delight of the officers. But then this was a big thing that worked in his favor as he had two, two, two tragedies that helped him immensely. One was the USS Cole attack. I don't know if you guys remember that, but that was when a little tiny boat went up to a big ol, you know, Navy ship. And and again, you know, I'm sure that in my mind, I'm sure what's happening is that people on the ship were going, get your boat away from us, or we will have to open fire on you. But again, it's not going to look awesome if it's like they didn't turn around. So we so we blew them up and it's like, yeah, that was a fishing boat full of fishermen and fish. So this boat's coming closer and closer and eventually. And the thing that in this case it was full of, um, plastic explosives blew a hole in the side of the ship, killed a bunch of sailors.

Greg Kyte: [00:34:55] And because you've got these these naval ships that have to dock at just commercial ports sometimes. And so that that's what happened with the USS Cole. So all of a sudden there's this, there's this need for security for, for, for Navy ships while they're at commercial ports. And so fat Leonard, he's like, I got you. And he starts doing this thing called the the the the Ring of Steel. I think you called it, um, where he eventually. I mean, it started off a little bit more prosaic than this, but it eventually was four barges that formed a rectangle and steel cables between the barges. You'd open up the cables, the Navy ship would go in, and then basically nobody's allowed. And and again, like Caleb said, he provided security so they would have ships going around the perimeter so the Navy didn't have to turn ships away. These fat Leonard's guys would. Um. So again, it took care of he even had, uh, had frogmen who would dive underneath to make sure there was nothing, no explosive planted underneath his ring of steel. Wow. Um, and then and then and then 911 happened, and then everybody was like, uh, whatever it takes to protect our troops. Here's all the money. So Fat Leonard was like, I'll do whatever it takes to protect your troops.

Greg Kyte: [00:36:06] Give me all the money. So. So that was part of it. He was amazing at what he did. But then the other thing is, he grew up on the on the docks. In an emerging economy, bribes were commonplace for him. That's just that was just how you did business for where he was at in the world. And so he started using that same marketing, uh, technique with Navy officers where it started with, here's some cigars, here's a nice dinner. He he he loved to wine and dine people so that the officers would be like, hey, where we look we're we're in the, we're in the, the the Pacific Ocean. Where should we dock our ships? Hey, I know this great guy named Fat Leonard. He'll take good care of us. Let's go there. Because they got, you know, they would. They would get cash. They'd get trips. I mean, it was just he he he, like, lavished gifts on these people. Fun fact in the armed forces, at least at this time, maybe it's been raised for inflation, but at this time you could only accept gifts up to $20 of cash value. He's given these guys Michelin star meals, which are, you know, hundreds of dollars per plate, which that alone is blowing up your $20 limit. Um, so, okay.

Blake Oliver: [00:37:14] Well, I want to say that brings us to this. The crux of this fraud, which is inflated invoices. He's overcharging the military. The admirals are happy to pay these bills because they're getting kickbacks. Their people are happy. He's providing a really, you know, valuable service to them personally. Yeah. Um, but not okay to do that, right? With taxpayer money. So, like, what control was put in place after this or could have been put in place to catch and detect this sort of thing?

Greg Kyte: [00:37:44] The. Well, so so the the funny thing is there were controls in place already and that was, that was the I mean, you had people who were bringing up going, hey, this isn't right. These invoices are not correct. So, so really and and you had what was what was it? Kayla? I think the numbers, 27 cases that were presented to the NCIS, the naval Naval Criminal Enforcement Service, or whatever. Service investigative service. Yeah, yeah, yeah. Enforcement doesn't start with an eye, does it? I'm.

Caleb Newquist: [00:38:16] No, I don't think so.

Greg Kyte: [00:38:17] Uh, yeah. Okay. So, um, so, so so they were there. I mean, really, it's interesting.

Caleb Newquist: [00:38:24] When the corruption went pretty deep, I think is what Greg is getting.

Speaker4: [00:38:27] Yeah. So it.

Blake Oliver: [00:38:28] Was being detected.

Caleb Newquist: [00:38:29] The the controls were being circumvented. Yeah. And and so there. So that's why the the conspiracy, that's why there were so many.

Speaker4: [00:38:37] It was right.

Caleb Newquist: [00:38:37] It was a, it was a conspiracy. Yeah. Yeah, yeah.

Greg Kyte: [00:38:40] Because management override of controls is something that happens all.

Speaker4: [00:38:43] The time actually. What it was. Yeah.

Blake Oliver: [00:38:45] So maybe if there had been like a whistleblower who had brought this up publicly and gone to Congress or something, it could have gotten caught.

Speaker4: [00:38:50] Right.

Greg Kyte: [00:38:50] And there finally was a whistleblower.

Speaker4: [00:38:52] There finally was. Yeah.

Greg Kyte: [00:38:53] Who wouldn't shut up. And and so so it was a case number 28 with the NCIS that finally, finally went through. So.

Speaker4: [00:39:02] All right.

Blake Oliver: [00:39:02] Yeah. Well, I got to keep us moving along. We got to talk about lottery fraud because this one, I think, might be a, might be a little trickier to detect because it involved the rigging of an electronic lottery. Mhm. Um, the episode is called a lotto fraud. Eddie Tipton in the Multi-State Lottery Association, and Eddie Tipton, former security director of the Multi-State Lottery Association, uh, rigged the Hot Lotto game to win a $16.5 million jackpot in 2010, which raised suspicions when a trust in Belize claimed it at the last minute. Yes, that does seem a little bit suspicious. Investigators identified Tipton as the ticket buyer through surveillance video. Oops. He had programed the random number generator to produce predictable numbers on certain dates, and he'd been doing this since 2005, 2005 with his brother Tommy and friends also claiming rigged jackpots. So he got away with it for five years, it sounds like. Uh, this seems like it would be really difficult for any accountant to detect, given that he had programed the random number generator to not be so random. Like how do you how do you control for that? I'm curious to, you know, get your take on this. Is there any any other salacious details of this fraud that we should share with our audience today?

Greg Kyte: [00:40:22] Yeah, there's there's tons. I mean, they they did have controls in place with the Multi-State Lottery Association. But by the.

Blake Oliver: [00:40:30] Way, what states are we talking about?

Greg Kyte: [00:40:32] Oh gosh, I wish I could tell you it was a it was I think there was 13 different states that specifically had the hot lotto lottery. But, you know, and it was it was California, I think I want to say Oregon was one of them. But yeah, it's it's just this, you know, kind of a state's kind of a, yeah, scattershot of different states because because again, the way that a state, a state. Well, like for instance, um, what was it I, I, I one of my one of my hobbies. I love buying lottery tickets when I'm out of state because I, because I live in Utah and Utah does not have a state lottery lotto because we're far too pious for that here in the state of Utah. But I've won the lottery in 14 different states, um, including Georgia. I've won the Georgia State Lottery, um, for, I believe, $2. And I have the check. It's been laminated and it's up on my my wall. That's my. Those are my my souvenirs I get when I travel is lottery small dollar lottery winning, uh, checks. Um, but I went to Wyoming and I was up there and I wanted scratchers because that's the easiest way for me to get my small dollar lottery winnings. Like, we don't we we don't do scratchers. All we do is Powerball and, um, mega millions, like the big ones because they're like the. Apparently the little ones are how people get gambling problems. And the big I don't know what the the person the clerk couldn't really explain why the Wyoming was so weird like that. But different states, you know, buy into different lottery associations with different frequencies and regularities and different games and everything like that.

Greg Kyte: [00:42:04] So he specifically rigged this one game. But part of the problem and part of how he did that was he was the guy who wrote the program for these digital draws. So this wasn't balls in a, you know, in a, in a wind tunnel that gets sucked out of a tube. This was a digital draw kind of thing. So he wrote the program, and not a lot of people understand the program. And he was even able to send like, there's certain documents that you have to send in to another corporation to back up that your stuff was really random, and he just did the the kind of like Rita Crundwell, she faked invoices to cover her tracks. This guy basically faked reports to send in to those guys, and they just didn't, you know, and even like, uh, Claudia files. They didn't they they didn't do the equivalent of footing the the the tapes with the, the reports that he sent in. Um, but he was a highly, highly specialized guy doing a highly, highly specialized job. And he was, like you said, he was head of security. So even they whenever he was working on the computer to that was that did these digital drawers. There was a camera that was in the room that was on that was watching him and that was recording keystrokes. But he had enough skills to where he could go in and he could like he could orchestrate a glitch in that system for while he's doing the stuff that he's doing to cover cover his own tracks.

Blake Oliver: [00:43:26] There's no tape for these, uh, for these minutes here. That sort of. Right.

Greg Kyte: [00:43:30] Right. Or instead of, you know, it went to where it was just recording, you know, you've seen it where like, it was like a blip every 16 seconds or something like that. So you couldn't really tell what was going on while he was doing this stuff.

Blake Oliver: [00:43:42] So this guy's a security director. He can circumvent all of the systems, all the controls in place in this electronic system, but most so most. So how did he get caught?

Greg Kyte: [00:43:51] It was because in so it was in, um, it wasn't okay. Now now I'm having a it was it was Iowa.

Speaker4: [00:43:58] Iowa was.

Greg Kyte: [00:43:58] Yeah. It was, it was in Iowa. Yeah. So in Iowa they have a bunch of very because obviously we all know if you're an employee of the lottery, you can't play the lottery because that's just if you win. Even if you win completely legitimately, everybody's like, that looks horrible. So you can't play. So he he obviously couldn't play these games. But Iowa had additional rules. And maybe this is I guess I never checked to see how common this was was that. But I don't I don't think it is very common. The person who buys the ticket has to be the same as the person who claims the ticket. So he bought the ticket and he's on camera at this, you know, because and again, Iowa seems like it went above and beyond to have like to make sure cameras were installed. They had access to security cameras at all the convenience stores in the whole state where they sell these lottery tickets. So they were able to look at, look at the the tape and identify that it was him doing it. But then it wasn't a crime that he it wasn't a crime. It wasn't criminal for him to buy the ticket. It was just against the rules for him to win the lottery. But what was a crime was him then passing the ticket on to somebody else to try to work its way out. So. So there was all these red flags and, and that and, and the main source we had was actually a book written by one of the Das, I think, for the, the state of Iowa, who, who worked the case, who he was like, everybody thought this was a stupid thing and that it was wasn't worth our time. Because you're looking at law enforcement has a limited time, limited budget. And, uh, but eventually he just dug his teeth into it and rode it all the way till he found what was happening.

Blake Oliver: [00:45:34] Well, so this is a good example of why perhaps those, uh, transparency laws like in Iowa around winners of lotteries are important. Because if the public doesn't know who the winner is, how do you know that there wasn't fraud involved? And I think we could we could broaden this potentially to all sorts of different types of enterprises or government situations where in addition to having good internal controls, you should also have a system that is transparent, like audit trails. Right? A great example of that, you can have an audit trail in any electronic program that should never be changed, right?

Caleb Newquist: [00:46:10] Like anyone can review at any time.

Blake Oliver: [00:46:13] Right? Right. And that's basically kind of what Iowa system is in a sense. Like we know who the winner is so we can question their motives perhaps. Yeah. And in other states where that's not required, he never would have gotten caught.

Speaker4: [00:46:27] Right. And and and.

Greg Kyte: [00:46:28] That was the thing even like the, the the so he he was able to have his brother buy tickets in Colorado. I think it was um and and because again he, he knew the information. So he just passed the information to his brother and his brother bought the ticket. And it was only in hindsight that it was like, oh, you know, again, through this transparency, which was in Colorado, where the investigators could go, who who's what, like they started, you know, sent sent a letter around to all the state lottery divisions going, hey, is anybody you know, anybody have any, you know, weird transaction, you know, weird, weird winners, uh, and or winners that line up with this name or that have anything to do with this. And somebody was like, oh, here we have one. Here you go. Um, which which again was a little bit of luck, but also like you said, it was because of transparency that they had those, that information available.

Blake Oliver: [00:47:17] So in the time we have left I want to address the biggest fraud that is on our list. And I'm only giving you like five minutes to do it guys. So this is a real challenge here. We're going to talk about pandemic fraud. Now I don't think we need to like educate everything, everyone on pandemic fraud because we've all heard about it. Pptp fraud, eidl fraud, IRC fraud. Yeah, I just want to get your takeaways, having lived through this over the last however many years now. Like. What are your biggest takeaways from the pandemic fraud stories that you have uh, covered? Or another option is just tell us some of the craziest things you've seen people do with the money or both. Yeah. Caleb, uh, what's your favorite?

Caleb Newquist: [00:48:04] I think, um, well, I love, I love, uh, I, I love a good, uh, corrupt politician. So, uh, the representative, the state rep, the state rep in Florida, uh, Joseph Harding, I believe is his name is. Yeah. Um, he, uh, that that that story was delicious and satisfying and and and the, uh, he had been in office, I believe he'd been elected to this the Florida State House and um had been in his had had had been serving for about a month when he started, when he started, um, he he started an idol, an idol fraud. He, he, he submitted, uh, you know, bogus paperwork about his businesses. Um, and I think, uh, the other, the other, uh, uh, aspect of that story that was interesting is, was his brother in law, uh, went even bigger. Um, and had had millions in PGP and Eidl and, and, uh, and other, you know, pandemic aid fraud. Um, and, um, and so, yeah, I love a good corrupt politician story. Um, uh, I think, you know, in terms of takeaways, I think one thing that Greg and I have talked a lot about is having all experienced the pandemic the way we all did. I think we all kind of remember kind of the early days and thinking about how crazy it all was, how how uncertain everything was, and how much we didn't know not only about just, you know, the virus, but also, you know, businesses being shut.

Caleb Newquist: [00:49:41] Like, how are people going to how are people going to make ends meet? How are they going to keep their businesses going? And so I think the the kind of the, the fast moving legislation that, that that provided the aid, you know, that was the avenue that we took. But the alternative and now we have in the resulting of it is that lots of people got aid that needed it. But then we have this big fraud and we talk about all these big fraud stories. But I think it's probably it's at least arguable. And Greg would probably say it's true that the alternative would have been worse, which is that we didn't provide aid to people, we didn't provide aid to businesses. And the economic kind of consequences of that would have been far more severe than, um, than the amount of fraud that we're seeing, for example. So, um, I think that is the I don't envy, I guess, the people in the positions of power who have to make those kinds of calls, um, and, and, and basically have to, uh, account be held accountable on either side of it. And I think because the fraud is a is a massive problem, uh, but not providing aid to people who desperately needed it, uh, would have been probably worse. So.

Blake Oliver: [00:51:00] So to summarize, to summarize your position.

Caleb Newquist: [00:51:03] A rock and a hard place.

Speaker4: [00:51:04] Yeah.

Blake Oliver: [00:51:05] Billions of dollars of fraud, but worth it because we prevented a terrible recession.

Caleb Newquist: [00:51:12] I mean, yeah, I don't know. I mean, maybe, maybe someone smarter than.

Speaker4: [00:51:16] Me.

Caleb Newquist: [00:51:16] Could say, well, this is how we would have navigated it, but I don't see how we would have navigated that without providing the aid.

Greg Kyte: [00:51:22] Well, they're trying they're trying to thread the needle of going, okay, we don't want to be fast and sloppy, but we don't want to be overly slow and over. We can't we can't be overly slow and overly precise. And so that that's why if all of us who who were in public accounting or did anything with PGP, that we remember that it was like we'd have clients calling us, uh, and saying, hey, uh, what? So do I qualify. And it's like today you do, you know, or how how much do I. And what can I spend the money on? Well, here's what you can do right now. There could be another press release in an hour that changes this and that. And the reason why there was all those adjustments was not just that they were trying to make sure that people got relief. That would actually be that would actually be relief, but was also to try to prevent people from committing fraud, like I remember with the loans that I. So I'm a controller, in-house controller for a group of medical office buildings. And so we we got to two different LLCs. Each got a Pptp loan. It was pretty small because we have a small staff and it was based on staff. But I remember one of the things is you had to you had to submit your. 941 your payroll tax to to support how much money you're actually paying to employees. And I go. Right there it you know I put them in. They can go double check to make sure I didn't fabricate these. And, uh, and then I, you know, anybody who's lying is going to get caught right there, but there's so many people who don't care, and they just are like, I want cash now. And if I get it, I win and the consequences be damned.

Speaker4: [00:52:59] And that seems to be all the money.

Blake Oliver: [00:53:01] That seems to be. How all this money was obtained fraudulently is, is they just made up tax returns, just filled out the forms with fraudulent businesses, employees, and there was not a verification that occurred on the other side. Right. And the argument I think Caleb made very well, uh, succinctly, is that there wasn't time to do all that verification. Who was going to who was going to actually compare. Right. Right.

Greg Kyte: [00:53:26] And and there is time now. And people are doing it now because there's this uproar of how much how much money was stolen.

Blake Oliver: [00:53:33] But in the meantime, Vineeth, who bought a $58,000 Pokemon trading card with his $85,000 Eidl loan. I mean, you know, I don't know if the government's going to be able to sell that Pokemon card for $58,000.

Greg Kyte: [00:53:46] Not if he took it out of the case.

Blake Oliver: [00:53:49] Yeah. Did he play with it? I mean.

Speaker4: [00:53:51] Right. Come on, come on.

Greg Kyte: [00:53:53] Yeah, I don't know. I have no.

Speaker4: [00:53:54] Idea.

Blake Oliver: [00:53:55] Yeah, well, Caleb and Greg, thank you so much for doing this round up of government frauds. Um, any, like, big takeaways that you want to leave the audience with. You know, these are government accountants who want honest, transparent government that handles taxpayer funds fairly honestly. What what can what what can you offer them from your 60 plus episodes of oh My Fraud? How can we be better?

Greg Kyte: [00:54:29] Um, I would say I mean, one of the big takeaways I that that I think is huge for everyone is, uh, is is basically the concept of professional skepticism. Um, you know, it's it's trust but verify and also maybe don't trust. That's how I that's what I say professional skepticism is because we we see that with Rita Crundwell in Dixon is that people people just she she was in the job for a long time. She was very she she was very knowledgeable. She knew all the numbers. Even if they were her own fraudulent numbers, she knew them backwards and forwards. So people just gave her a pass and they didn't scrutinize her to the level that they should have. Same with, um, Claudia Viles and Anson Maine. She was incredibly trustworthy. And so people just gave her a pass and they didn't. You've got to you've got to you have to go. Someone here is maybe stealing money from this organization. So when you stop, you know, stop, stop just implicitly trusting people and verify everything that you can.

Blake Oliver: [00:55:30] How about you, Caleb?

Caleb Newquist: [00:55:31] I mean, I wish I, I mean, we Greg and I talk about that a lot, which is be more cynical. I mean, yeah, yeah.

Speaker4: [00:55:41] I mean.

Caleb Newquist: [00:55:41] That's, that's I think probably my cynical take I think my more optimistic take is, um, just thank you to all the people that are committed to public service in this way because it really is important work. And it's you you're all, like, kind of unsung heroes in the sense of, uh, you know, being a CFO or a comptroller or comptroller or whatever role it is in finance and accounting for state, local and federal governments, like a lot of that stuff is is really like I said, kind of you guys are unsung heroes for, uh, for all of us taxpayers. And so, um, thank you for your service and thank you for doing the work. I mean, there's, I think, uh, there's a lot of good work to be done in, in public service on the finance and accounting side. And it doesn't get the it doesn't get the recognition it deserves.

Blake Oliver: [00:56:36] Greg and Caleb, I think that's a great way to wrap this. I am Blake Oliver. I've been speaking with the host of the Oh My Fraud podcast, Greg Kite and Caleb Newquist. Subscribe to Oh My Fraud by going to Ohmydollar.com/support scribe. You can find it on all major podcast platforms as well as YouTube, and you can earn free CPE, free Nasba CPE for your CPA license renewal or CMA renewal or enrolled Agent renewal. You can do that at Earmarked App. Create a free account, locate the Oh My Fraud channel on the earmark app register and, uh, earn a free CPE. Just take a quick quiz after you listen to each episode. And there's 60 plus episodes now, so you can get all of the CPE you need. And a lot of it's accounting because fraud is accounting. Get your Ana requirement out of the way with oh my fraud. So that is again oh my fraud. Com and earmarked app.