Dismissed from CAP for reporting financial fraud

[aestu]

Very briefly:

Am a CPA
Was an AEM member for years
Took an interest in CAP and joined as a full member
Unit commander wanted his spouse to co-sign wing checks (major no-no)
The unit commander had just purchased a new house (in fraud class they teach that sudden outlays are a strong correlative and/or causal factor in financial fraud)
I politely questioned this decision
Unit commander said he had a waiver from the wing commander
I asked if he had it in writing
He said the WC said so
I emailed the WC to verify and advised the UC I had done so
UC retaliates by giving me a 90-day suspension
A few days later a letter arrives from national saying I was being dismissed "in the interest of CAP"

I call and ask why, the excuse given was three misdemeanor arrests - two "young and stupid" and one fraudulent charge during a botched home invasion; no convictions. I had already passed my background check, and the date on the envelope didn't match the date on the letter, which was the day after the email to the wing commander.

Not sure where to go from here other than "sue CAP"

[MSG Mac]

You have 30 days to appeal the actions to the Region Commander. If he concurs with the decision, you can appeal it to the MARP at National HQ.

[RogueLeader]

Unless the arrests were made on the application- as you did not disclose them on your application; he does have sufficient regulatory grounds for your termination.  The timing may be coincidental, or it may be intentional.

That being said, I do want to congratulate you on being familiar with the regs to notice an issue and challenge it.  A couple of things that peak my interest:
Is the wife signing checks to him or herself?  If not, that is perfectly ok for her to sign checks (if she's on the approved list)
Are the checks being made out to "cash'.  If not, and doesn't conflict with above, no issue.

Regardless of above, I would not do anything that violates your suspension as it will jeopardize any appeal that you can file.  Good luck.

[Eclipse]

To start - you aren't anonymous here, so take that for what it is worth.

In regards to the actual issue, how is anyone below Wing signing checks in this age of WBP and WAs?

The appeals process is outlined in CAPR 35-3:
https://www.capmembers.com/media/cms/R035_003_B74F5A60C44CF.pdf

[aestu]

Unless the arrests were made on the application- as you did not disclose them on your application; he does have sufficient regulatory grounds for your termination.  The timing may be coincidental, or it may be intentional.

Definitely went full disclosure.

That being said, I do want to congratulate you on being familiar with the regs to notice an issue and challenge it. 

Yeah, it's the rules under both CAP and GAAP.

Is the wife signing checks to him or herself?  If not, that is perfectly ok for her to sign checks (if she's on the approved list)
Are the checks being made out to "cash'.  If not, and doesn't conflict with above, no issue.

CAP 173­-1, 11(g) specifically forbids members of the same household from cosigning checks for any reason, because there are ways to embezzle other than making checks out to cash, e.g., sweetheart deals and dummy companies.

Regardless of above, I would not do anything that violates your suspension as it will jeopardize any appeal that you can file.  Good luck.

Yeah, I mailed in my membership card and withdrew from an SLS course.

[aestu]

You have 30 days to appeal the actions to the Region Commander. If he concurs with the decision, you can appeal it to the MARP at National HQ.

The story goes that the decision was made by national, and I don't see MARP taking the case. Standard practice is that appeals must be exhausted before a lawsuit can be brought. I am prepared to go to that extremity, but I would really rather find a better way out.

[Eclipse]

CAP 173­-1, 11(g) specifically forbids members of the same household from cosigning checks for any reason, because there are ways to embezzle other than making checks out to cash, e.g., sweetheart deals and dummy companies.

It's actually 11 h for those scoring at home, but with that said...

11. Banking.
a. Units below wing level will not open or maintain bank accounts or petty cash accounts.

How do they have a checkbook to start with?

[aestu]

That's a very good question and I have no idea. They didn't have one, but they wanted to open one. It was very clear to me from the context that the couple were looking to embezzle.

Financial fraud is a major problem in CAP. There's something like a double-digit incidence rate amongst orgs. The USAF and Congress are really not happy about it, much more so than any other issue with CAP, I think. That said, I don't think they're particularly eager to wade into the swamp.

[RogueLeader]

You have 30 days to appeal the actions to the Region Commander. If he concurs with the decision, you can appeal it to the MARP at National HQ.

The story goes that the decision was made by national, and I don't see MARP taking the case. Standard practice is that appeals must be exhausted before a lawsuit can be brought. I am prepared to go to that extremity, but I would really rather find a better way out.

It could be that your FBI check bounced (a possibility, as I don't know you.) but I doubt that National or even Region would be involved otherwise.  As you are, presumably, under the preliminary termination action(and haven't been officially kicked out yet) you do have certain rights and obligations under the regulations.  I would suggest you read up on CAPR 35-3.

Also, we do only have one side of the story, and it seems that there may be more to it, which should be left unsaid.  It won't do you or anybody else any good.  I wish you the best.

[Eclipse]

That's a very good question and I have no idea. They didn't have one, but they wanted to open one. It was very clear to me from the context that the couple were looking to embezzle.

"Wanted to open one"? That doesn't make any sense.  If they "wanted to open one" there woudn't be one to be signing, and even if they did
where would the funds to embezzle come from?  Wing Banker doesn't all for a mass-transfer of unit funds into some random account.

Financial fraud is a major problem in CAP. There's something like a double-digit incidence rate amongst orgs. The USAF and Congress are really not happy about it, much more so than any other issue with CAP, I think. That said, I don't think they're particularly eager to wade into the swamp.

This is 100% FALSE, and is an indication you are not as informed as you need to be on this issue. 
As a matter of fact this has never been a "major" problem in CAP.  Have there been high-visibility anomalies?  Yes.
Were units less then fastidious about their paperwork?  Yes. But "fraud" has never been a "major" issue in CAP in the
17+ years I have been involved, and the unqualified audits speak to that.

Since implementation of the wing banker program in and around 2007-2009, the control of the majority of the funds
are at the Wing level or higher, and the majority of the issues have been the inability of Unit FMs to submit proper forms
to get checks, or making deposits without notifying the Wing's WA, thus leaving orphan funds in the account.

"Major financial fraud"? No way. 

I don't know what was actually happening at your unit, but there's clearly more to the story.

[stitchmom]

You called them out and now they have a smear campaign against you.    I would cut my losses and move on someone above them is letting it go on. A lot of the world wants things to just to keep going above all else unfortunately.

[lordmonar]

CAP 173­-1, 11(g) specifically forbids members of the same household from cosigning checks for any reason, because there are ways to embezzle other than making checks out to cash, e.g., sweetheart deals and dummy companies.

It's actually 11 h for those scoring at home, but with that said...

11. Banking.
a. Units below wing level will not open or maintain bank accounts or petty cash accounts.

How do they have a checkbook to start with?

That's what I was wonder about.    Ever since Wing Banking.....Wing cuts the checks once you put in a payment request.   

[Holding Pattern]

I've put in 2 or 3 re-reimbursement requests... I get checks from Wing as a result, not from the unit. I've heard of no variances to this policy.

[Spam]

Fraud HAS (past tense) been a pervasive problem in CAP (from my 30+ years in, over five Wings and 3 Regions and 4 commands). Financial fraud: embezzlement of unit accounts raised by fund raising and from appropriated funds. Logistical fraud: screening and receiving DRMO assets which were then sold on the commercial market off base to gain cash. The result today: a vastly restricted ability to manage our own money, and to receive surplus DoD assets - for very GOOD REASONS.


Fraud is not, from that perspective, still a major problem due in part to the Wing banking program, as clunky and inefficiently administered (and as non standardized) as it is.  To avoid the types of scandals we used to have in the 80s and 90s, I'm satisfied that we have a good FM program, for which I thank our national command authority and our FM professionals.


That said, we still, today - every year - have instances of normal, fallible human members trying to game the system, with unit slush accounts, unauthorized booster clubs, spousal sweetheart authorizations without review and use of CAP (and DoD host facilities) for commercial purposes, and sometimes that's not always completely run to ground as quickly and thoroughly as we'd like. To pretend that human nature has been changed by some new CAP procedures and by Gene Roddenberry-like fantasy of a supposed inherent goodness of human nature is short sighted. We need to remain vigilant, and to ask questions of each other in an open-kimono, above board fashion, and to act swiftly on any APPEARANCE of impropriety, and investigate it (and to be conscientious to avoid situations which would even hint at any such impropriety).


All that said... good luck. I'm not at all impressed with the results of command action on supposedly objective IG actions, in recent history ( remember: the IG folks investigate and make a recommendation, Command makes the call). If you're getting a DP action from NHQ, you need to ID from which level/which office the action to terminate you came, and address your protest to the level(s) above that one. If there is a "fix" in at Group, go to Wing. If Wing... got to Region, etc. before going with your nuclear option.


Strong recommendation: don't claim that you were dismissed for reporting fraud, if you have no concrete evidence that fraud occurred, versus improper procedural actions. You cannot speak to the intent of the other parties, and should limit your actions to the facts here, lest you be accused of libel.


V/r
Spam

[aestu]

Fraud HAS (past tense) been a pervasive problem in CAP (from my 30+ years in, over five Wings and 3 Regions and 4 commands). Financial fraud: embezzlement of unit accounts raised by fund raising and from appropriated funds. Logistical fraud: screening and receiving DRMO assets which were then sold on the commercial market off base to gain cash. The result today: a vastly restricted ability to manage our own money, and to receive surplus DoD assets - for very GOOD REASONS.


Fraud is not, from that perspective, still a major problem due in part to the Wing banking program, as clunky and inefficiently administered (and as non standardized) as it is.  To avoid the types of scandals we used to have in the 80s and 90s, I'm satisfied that we have a good FM program, for which I thank our national command authority and our FM professionals.


That said, we still, today - every year - have instances of normal, fallible human members trying to game the system, with unit slush accounts, unauthorized booster clubs, spousal sweetheart authorizations without review and use of CAP (and DoD host facilities) for commercial purposes, and sometimes that's not always completely run to ground as quickly and thoroughly as we'd like. To pretend that human nature has been changed by some new CAP procedures and by Gene Roddenberry-like fantasy of a supposed inherent goodness of human nature is short sighted. We need to remain vigilant, and to ask questions of each other in an open-kimono, above board fashion, and to act swiftly on any APPEARANCE of impropriety, and investigate it (and to be conscientious to avoid situations which would even hint at any such impropriety).

All that said... good luck. I'm not at all impressed with the results of command action on supposedly objective IG actions, in recent history ( remember: the IG folks investigate and make a recommendation, Command makes the call). If you're getting a DP action from NHQ, you need to ID from which level/which office the action to terminate you came, and address your protest to the level(s) above that one. If there is a "fix" in at Group, go to Wing. If Wing... got to Region, etc. before going with your nuclear option.

Strong recommendation: don't claim that you were dismissed for reporting fraud, if you have no concrete evidence that fraud occurred, versus improper procedural actions. You cannot speak to the intent of the other parties, and should limit your actions to the facts here, lest you be accused of libel.

You may not see what you describe as major fraud, but it is. Embezzlement is almost never just transferring funds from one account to another, or making checks out to cash. The revealing bit in what you say is "normal, fallible human members..." doing this or that. Mainstream organizations have rigid procedural rules to prevent that kind of behavior from being considered "normal members being normal".

(Counter-example: how normal people in third-world countries with very high rates of corruption think and act.)

This is also why whistleblower clauses and other anti-retaliation mechanisms exist. In any institution, there is almost always a bureaucratic mechanism to get rid of people a certain constituency doesn't like, and whistleblower clauses exist to defeat that by underscoring the underlying issue. But whistleblower clauses and the like only work if there is a consensus they are necessary. As you demonstrate, there is a cultural consensus in CAP against letting those procedures work as intended. Changing the culture of an institution is very hard.

I attended a lecture by IG national and they definitely said there's double-digit incidence of financial malfeasance in various orgs. The USAF agrees. As you identify, for various reasons, they are not interested and/or empowered to do anything about it. The tendency to keep things going is too strong.

You are probably very experienced and versed in CAP. So I will take your advice to heart on that basis.

However, your claims about libel are not correct. In the United States, it's very hard to charge someone with libel, because truth is always a defense, and the burden of proof lays with the plaintiff. Since it is extremely hard to prove a negative and because doing so would require full disclosure - and because the very fact one party is motivated to sue the other indicates that the accusations would be considered credible by most people - in practice, it's almost never possible and/or worthwhile to sue someone for libel. Especially so far as retaliation goes. Not so in Europe, however...

[aestu]

You called them out and now they have a smear campaign against you.    I would cut my losses and move on someone above them is letting it go on. A lot of the world wants things to just to keep going above all else unfortunately.

Yeah, pretty much. I don't want to move on because I liked doing CAP and I don't want that door to close behind me. There is also the statute of limitations to consider.

[FW]

Forgetting the reasons for the 2b, you have an absolute right to appeal.  If the 2b is direct from NHQ, you appeal directly to the MARP.  That said, I've never heard of a member in a squadron be terminated at the National level unless the member application was falsified. 

I find it difficult to believe a squadron has a checking account.  WBP is a well oiled machine today, and it would be almost impossible to hide significant funds.  Fraudulent expenses would be picked up at wing by the wing administrator or finance officer.  Finance has a system of checks and balances to insure there is little chance of FWA.  Since it's not 1 April, I assume you have a valid issue, so good luck with your appeal, and whistle blower complaint.

[PHall]

aestu, you were given some very sound advice from Spam and I suggest two things.
1. Follow his advice and 2. Stop posting about this.

[West MI-CAP-Ret]

This sounds scary!  Rather than suing CAP, going through the go through your chain of command, with all your 'ducks-in-a-row' seems like the first step.


Everything could be a coincidence, or retaliation.  Personally, I wasn't aware you can receive CAP membership unless you're free of criminal convictions.  Youthful indiscretion aside, if in fact you were convicted of crimes over the age of 18, it just might be that the system 'gamed you.' Meaning, CAP probably initially ignored your convictions and seeing that you're now a professional, needed/wanted your expertise.  Now you're a trouble maker and because of regulations, CAP can dump you and I don't think you'd have a case.


WORD TO EVERYONE... I love CAP, but don't be a whistle blower.  Ever.  You can send things to the IG, but withhold your name.  Most likely nothing will come of it because you didn't include your name.  What you can do is do a Memorandum for Record, stating your understanding this is a non-standard practice... and quietly leave.  Just go.  Can't fight City Hall, and you can't fight CAP.  Sad but true.  I used to say that 99.5% of CAP members are great, honest and professional people, but that percentage has come down some.  I'm getting discouraged by hearing more of these stories (I ran afoul of the system a couple years ago in which several members of this group asked the question I would of asked which was "This story sounds so incredulous, there must be more to it..."  Fair, but sadly there wasn't anything more to the story.


Finally, is CAP really worth suing over?  Really.  At the very least, if government funds are being wasted, then the Air Force needs to know, but realize you should resign your membership before you do such a thing (in case you ever want to return, because you can't return if you resigned during an investigation or to avoid 2b, etc).  Actually, if you're this worked up about this, go volunteer with the Red Cross, Scouting, or even the Coast Guard Aux...


Good luck.

[Brad]

In addition to the MARB, I feel that this could very well come under the IG's F/W/A umbrella, particularly with the sketchy checkbook.

https://www.capmembers.com/cap_national_hq/inspector_general/fraud-waste-and-abuse/