Far too often, nonprofit board members assume that their organization’s finances are safe because large sums of money haven’t gone missing. What they don’t know is that embezzlers rarely steal large sums of money. They don’t want anyone to know that they are stealing money so they do their best to stay “under the radar” in their illegal behavior. In fact, most embezzlement occurs in increments of $100 – $300 and are recorded as payments to fake vendors. Sometimes, the embezzlers even create fake invoices to justify the fake payments, further deluding board members who try to track funds carefully.
And, did you know that there is actually a group of criminals who prey on athletic clubs and programs? Many of these entirely volunteer-run organizations have minimal accounting controls making it easy to manipulate financial data and steal funds. In fact, just last month, another athletic program fell victim to an individual who stole up to $700,000 from their organization and a local business, both located in Paso Robles, CA. Read the story below.
Protect your organization – and your own liability as a board member – by ensuring that your organization is using proper accounting controls. Following is a list of several recommended controls any organization can implement to help prevent financial misappropriation. Employ as many as you can, check references and backgrounds on bookkeepers (volunteer, contracted and salaried) and remain diligent in monitoring your organization’s financial reports and accounts. If you need more assistance in protecting your organization, know that Spokes is always here to help!
Bookkeeper suspected of embezzling from Paso Robles business
By Matt Fountain
March 23, 2015
A Paso Robles bookkeeper was arrested last week on suspicion of embezzling at least $700,000 from a local manufacturing business over a period of six years and possibly embezzling money from the North County youth sports nonprofit where she was treasurer for about seven years.
Police say they are still investigating whether the nonprofit suffered any losses.
Denna Carol Serda, 56, was arrested following an investigation that included a Feb. 5 search of her Paso Robles home and a subsequent review of her personal bank accounts, according to Paso Robles police Sgt. Tod Rehner.
As a result of their investigation, detectives secured an arrest warrant for Serda, who turned herself in to the Paso Robles Police Department on Friday.
She was booked into San Luis Obispo County Jail on Friday on suspicion of felony grand theft exceeding $950 as well as forgery, and the San Luis Obispo County District Attorney’s Office is considering filing additional criminal enhancements for taking property exceeding $50,000, aggravated white-collar crime exceeding $100,000 and the denial of probation for a crime exceeding $100,000.
Rehner would not identify the nonprofit or the private company Monday, but The Tribune has learned they are Make-It Manufacturing of Paso Robles and the Paso Robles Youth Sports Council. Serda is no longer with either entity.
The Police Department said in a news release that Serda is suspected of embezzling more than $700,000 from her for-profit employer between 2008 and 2014. Officers believe Serda also forged more than 450 financial documents in order to embezzle those funds.
Detectives are compiling additional financial documents from the Paso Robles Youth Sports Council; that investigation remained ongoing Monday afternoon.
Greg Powell, president of Make-It Manufacturing, confirmed Monday that Serda was hired as his company’s bookkeeper in 2008.
Powell said he was served with a summons by the Internal Revenue Service, which stated that Serda and her husband, Steven Serda, were being audited for suspicious income. When he met with auditors, Powell said, he was presented with a document on his company’s letterhead approving an employee loan to Denna Serda with his signature at the bottom, which he said was forged.
Before hiring her, Powell said, he knew Serda for years through family and friends, as well as through local youth sports.
He said that he brought the matter to his insurance agent, who is also involved in the Paso Robles Youth Sports Council, for which Serda was treasurer.
“He literally went white,” Powell said. They then contacted police, he said.
Marc Dart, current president of the sports council, said Monday that Serda was one of the founding organizers of the 501(3)(c) and served as its treasurer from 2007 until January 2015.
The nonprofit consists of representatives from local sports organizations, elected board members and liaisons from the city and the Paso Robles Joint Unified School District to advise and petition the city and school district on matters related to youth sports.
Serda’s husband previously served as the sports council’s president beginning in 2006.
Dart confirmed that the organization’s board became aware of concerns about Serda from her employer and asked to discuss it with her. She came in accompanied by her husband, Dart said, and both promptly resigned in January.
Dart added that the organization has gathered financial records and is cooperating with detectives and the District Attorney’s Office.
According to court records, Denna Serda was convicted in 2003 in San Luis Obispo Superior Court for grand theft of more than $400 in property. She served 30 days in County Jail and three years of formal probation and was ordered to pay about $720 in restitution and $700 in other fines.
She remained in County Jail on Monday evening in lieu of $1.2 million bail.
All public phone numbers listed for Steven Serda in Paso Robles were disconnected as of Monday afternoon.
Assistant District Attorney Lee Cunningham said Monday that prosecutors had not yet filed charges against Denna Serda; Cunningham was not able to comment on the possibility of criminal charges against her husband.