Executive Vice President
Contact
Doug Holland; [email protected]
We're still waiting for the auditors to complete the year-end report, so I have no statements to present this month.
I received this interesting story about a club in Colorado that learned some expensive lessons about trust and caution. Following is a report by Bruce Ream, president of the Jefco Aeromod'lers.
Report — Jefco Aeromod'lers (Bruce Ream, president)
From the day most of us enter into the fun of building and flying model airplanes, we begin to fly with people who share a passion for our hobby. All of us will find people within the hobby who we come to know as good friends and people we can trust, but beware — this trust can sometimes be betrayed.
I would like to share what the Jefco Aeromod'lers of Colorado recently went through when we found out that all of the funds in our treasury were gone. As we look back on this event we keep coming back to the question of how this could happen and what we should have been doing to prevent the catastrophic event.
We are a large club with over 280 members and therefore our treasury has always had a fair balance. As with all clubs it is sometimes hard to get people to volunteer for positions on the board. When a member steps forth to volunteer to be the treasurer, a sigh of relief goes off that somebody will do this difficult and time-consuming job — but beware. This is our story.
- Clue #1: The club bent the rules which required a two-year membership to be an officer. This person had only been a member for one year. As it started out, and as far as the board was concerned, everything appeared to be in order with bills being paid and reports from the treasurer that we had money in the bank. We had other board members' names on the account, so it could be checked on by other board members.
- Clue #2: It wasn't very long before the treasurer asked the board if he could open another account because a different bank was going to offer us a better deal on our credit card machine and we could have a debit card for miscellaneous small charges. He asked other board members to sign the signature cards for this new account, but as we later learned the signature cards were never turned into the bank.
- Clue #3: The treasurer volunteered to run our biggest fund-raising event. This event generates large amounts of cash and, of course, this was turned over to the treasurer for deposit in the club account. Nobody asked for a receipt for this cash, which later turned out to be a major problem when we had to prove how much money had been stolen.
- Clue #4: As time went on and people would ask for the treasurer's report, he would report this much money in the account and everybody took him at his word. Some bills were not getting paid on time and when he was questioned about it he would say that he "sent the check but would check on it." Soon afterward the person or company would be paid.
- Clue #5: The treasurer reported that the club was running low on funds and that we should consider raising the dues. When he was questioned about this he would say we had enough to pay the bills but if we kept spending the way we were we could run out. Many of the older members started to question how this could happen given our past record of having substantial amounts of money in the bank and that our spending habits hadn't changed.
- Final Clue: In order to cover up the fact that he had stolen all the money and the accounts were overdrawn, he reported to the club that the State of Colorado had fined the club for our monthly drawing and that they had seized all of our monies — over $15,000. It only took overnight for most of the club members to realize what had happened to the club money.
The next day we contacted the Denver Police Department, who referred us to the District Attorney's office. One of the smartest things we did as a club was to engage a criminal attorney who agreed to take our case, talk to the DA on our behalf, and file civil charges at the same time. Throughout the whole process he guided us as to what our next steps were and provided counseling as to what we could expect as the case proceeded through the justice system.
After a long investigation the DA's office determined that a theft had occurred and that charges against the treasurer would be filed. Theft of over $15,000 in Colorado is a Class 4 felony. He was arrested and posted bond.
As president, and along with our new treasurer, we spent many hours going through bank statements and old records in order to prove what had been stolen. Just getting access to these records with the banks proved to be a big task because his was the only name on the account.
He pleaded not guilty and tried to say that most of the charges on the debit card were for club activities. We again had to go through records to prove they were not club expenses.
In the end, after many months, he did plead guilty and was sentenced to six years in state prison plus restitution in the amount of $41,365.52. We found out during the trial that this was his fourth felony conviction.
The court also said that if he or his family could reimburse our club for $20,000 they would consider reducing his sentence. He is still in prison and the club has received $20,000. If and when he gets out he will be required to provide restitution of an additional $21,365.52.
Reforms and Lessons Learned
So what have we done?
- We now require two signatures on our checks: the treasurer's and that of one other board member.
- At each board meeting the treasurer must bring the original monthly bank statement to the meeting and show it to another board member.
- We require that once a year our books are audited by someone outside the club.
This has been a learning experience for all of us who have been through it. If you are a board member of your club you may come to the same conclusion we did: just because you can fly an airplane doesn't mean that you should be trusted.
Our club is fully recovered because of the generosity of all who have contributed money and time to make this the great club it is. We have the best field in Colorado and invite all of you to visit and fly with us any time you're in Colorado.
A-B-C — Always Be Courteous. Until later.
Transcribed from original scans by AI. Minor OCR errors may remain.
