Vonya Global, 150 N Michigan Avenue, Chicago, IL (2026)

10/07/2026

A few weeks ago, I shared a post about the multimillion-dollar vendor kickback and inflated invoice scheme at Connecticut's Success Village housing cooperative.

This week, federal prosecutors announced that a third individual has pleaded guilty in the ongoing investigation, further illustrating how procurement fraud schemes often involve multiple participants and multiple breakdowns in internal controls. What's particularly noteworthy is that the latest guilty plea reinforces many of the governance concerns highlighted in the original case. Here are the internal control failures that allowed this to occur:
➡️ Inadequate oversight of vendor selection and procurement activities
➡️ Weak controls over competitive bidding and vendor approval processes
➡️ Insufficient review of vendor invoices and supporting documentation
➡️ Failure to independently verify that goods and services were actually provided
➡️ Limited monitoring of unusual spending patterns and vendor concentration risks
➡️ Inadequate conflict-of-interest identification and disclosure processes
➡️ Weak segregation of duties between procurement, vendor management, and payment approval functions
➡️ Lack of proactive data analytics to identify inflated invoices and suspicious payment activity

One of the recurring themes in procurement fraud cases is that the fraud itself is rarely sophisticated. Instead, multiple small control failures accumulate over time until significant losses occur. In this case, the scheme operated for more than two years and involved millions of dollars in payments before law enforcement intervention.

What Boards and Audit Committees Should Be Asking:
✔ How do we verify that vendor invoices accurately reflect goods and services received?
✔ Are competitive bidding requirements consistently followed and documented?
✔ What analytics are used to identify unusual vendor spending trends, excessive markups, or duplicate payments?
✔ How are conflicts of interest identified, disclosed, and monitored?
✔ Does Internal Audit periodically review procurement, vendor management, and accounts payable activities?
✔ Are there vendors that receive an unusually high concentration of organizational spending?
✔ How are vendor relationships monitored after onboarding?
✔ Would our current controls detect a kickback arrangement involving both employees and third-party vendors?

One of the most important lessons from the Success Village investigation is that procurement fraud rarely begins with a single large transaction. It often starts with small exceptions, inadequate challenge, and insufficient oversight. As additional guilty pleas emerge, the case serves as another reminder that strong governance, effective vendor oversight, and independent monitoring remain among the most effective defenses against fraud.

Guilty of fraudulent invoices & payments

09/30/2026

I recently facilitated an IIA Chicago event and in my research, I came across a World Economic Forum article written by Alison Martin of Zurich titled "Why Personal Resilience Belongs on the Boardroom Agenda" and thought it was worth sharing.

The article makes a compelling case that resilience is no longer just a personal attribute; it is a business imperative. Drawing on research involving nearly half a million employees, the article concludes that personal resilience is a significant driver of employee well-being, productivity, retention, and organizational performance.

One observation particularly resonated with me:

‼️Resilience is not simply "toughing it out." Instead, resilience is about creating the conditions that help people adapt to adversity, recover from setbacks, and maintain clarity and perspective when challenges arise.‼️

That message aligns closely with two frameworks that have influenced my thinking on leadership and adversity:

1️⃣The Positive Coaching Alliance (PCA) teaches that great coaches focus on effort, learning, and growth—not just outcomes.
2️⃣Ted Lasso reminds us to "Believe," "Be Curious, Not Judgmental," and "Be a Goldfish" when facing setbacks and challenges.

Neither philosophy suggests that people should simply endure difficult situations. Instead, they emphasize learning from adversity, supporting one another, and building environments where people can perform at their best.

From a corporate governance perspective, this raises an important question.

❓❓❓If resilience drives performance, retention, and organizational success, should resilience be viewed as an individual responsibility; or as a leadership and governance responsibility?

Boards and executive leadership teams may not be able to eliminate adversity, but they play a critical role in shaping culture, promoting psychological safety, and creating the conditions that help employees navigate challenges successfully. Research cited in the article suggests that organizations investing in employee well-being and resilience see measurable improvements in productivity and lower turnover.

Strong governance isn't just about managing risk.

It's also about creating an environment where people can recover, adapt, and thrive when adversity inevitably occurs.

What role do you believe boards and senior leaders should play in building organizational resilience?

Resilience is critical well-being driver

09/22/2026

Here is another reminder that procurement and vendor kickback schemes can thrive when oversight breaks down.

The village General Manager and an HVAC contractor pleaded guilty to conspiracy to commit wire fraud in connection with a multimillion-dollar embezzlement scheme involving the Connecticut housing cooperative. The scheme involved submitting fraudulent or inflated vendor invoices and diverting portions of the resulting payments back to participants through kickbacks. Prosecutors allege the arrangement operated from 2022 through 2024 and involved millions of dollars in vendor payments.

While the facts of every fraud case are unique, the underlying control failures are often remarkably similar. Here are some internal control failures that allowed this to occur:
• Inadequate oversight of vendor relationships and contractor activities
• Weak review and approval processes over vendor invoices and change orders
• Insufficient monitoring of unusual increases in vendor spending
• Failure to identify and investigate conflicts of interest
• Limited independent verification that billed services were actually performed
• Inadequate segregation of duties within procurement, vendor management, and payment processes
• Lack of data analytics designed to identify duplicate, inflated, or anomalous payments

Portions of vendor payments were diverted back to individuals involved in the scheme through kickback arrangements tied to fraudulent or inflated invoices. The case demonstrates how procurement fraud often requires multiple control failures to occur simultaneously: vendor oversight, invoice review, payment approval, and monitoring all have to break down for a scheme to continue over an extended period. And in this case, they all did.

So, what should Boards and Audit Committees ask:
✔ How are conflicts of interest identified, disclosed, and monitored throughout the procurement process?
✔ What controls exist to verify that goods and services billed by vendors were actually received?
✔ Are vendor invoices subject to independent review and challenge before payment?
✔ How do we monitor for unusual spending patterns, duplicate payments, or rapid increases in payments to a particular vendor?
✔ Does Internal Audit periodically review procurement, vendor management, and accounts payable activities?
✔ Are vendor master file changes independently reviewed and approved?
✔ Do we perform periodic analytics to identify potential kickbacks, bid-rigging, or other procurement fraud indicators?
✔ Are employees and vendors aware of reporting channels for suspected fraud or unethical conduct?

Strong governance, effective vendor oversight, and continuous monitoring remain among the most effective defenses against procurement and vendor-payment fraud.

Facing maximum 20-year prison term

09/15/2026

Even organizations built around security, secrecy, and oversight are not immune to fraud.

A former CIA official has reached a tentative plea agreement after federal investigators discovered more than $40 million in gold bars, approximately $2 million in cash, and dozens of luxury watches at his Virginia home.

The perpetrator created a fictitious classified program, obtained government assets under the guise of legitimate operational needs, falsified educational and military credentials, and submitted fraudulent time records over a period of years. The Guardian has been following this story and has a series of articles in you're interested in learning more.

While the facts are extraordinary, the underlying control failures are familiar:

Internal Control Failures that allowed this to occur:
• Excessive reliance on a trusted employee operating within a highly specialized environment
• Insufficient independent review of requests involving significant assets and expenditures
• Weak verification of educational, military, and professional credentials
• Inadequate oversight of special projects and programs operating with limited transparency
• Management override of established approval and monitoring processes
• Insufficient challenge of unusual transactions and requests that fell outside normal operating patterns
• Lack of effective monitoring designed to identify concentrations of authority and control

One of the most striking aspects of this case is that many of the alleged activities occurred within an environment where security and controls would be expected to be among the strongest in the world. The case serves as a reminder that fraud often occurs not because controls do not exist, but because individuals find ways to circumvent them and others fail to challenge unusual activity.

What Boards and Audit Committees Should Be Asking:
✔ Where do we have excessive concentrations of authority within the organization?
✔ What controls exist to detect management override of established processes?
✔ How are unusual transactions, expenditures, or requests independently challenged and reviewed?
✔ Are employee credentials, certifications, and qualifications periodically validated?
✔ Which processes operate with limited transparency, and how are they independently monitored?
✔ Do Internal Audit and Compliance have sufficient access and authority to review high-risk activities?
✔ Are we relying on trust and reputation where verification and oversight should exist?
✔ What indicators would alert us that a trusted employee is circumventing established controls?

One of the most important lessons from this case is that trust should never replace verification. Organizations that build cultures of constructive challenge, independent review, and accountability are far better positioned to identify fraud before it becomes a headline.

Hides gold bars in his basement!

09/10/2026

Here's another reminder what can happen when oversight breaks down.

Albuquerque Public Schools administrator guilty of , money laundering, and racketeering. More than $3 million in vocational education funds were diverted and over $1 million was paid in kickbacks.

While the details of every fraud scheme differ, this case highlights a common risk: when a trusted employee gains the ability to influence vendor selection, approve expenditures, and circumvent independent review.

As usual, internal control failures allowed this to occur:
• Excessive authority concentrated in a single individual
• Inadequate oversight of vendor selection and procurement activities
• Failure to identify and monitor conflicts of interest
• Insufficient review and approval of vendor invoices
• Weak monitoring of unusual vendor spending patterns
• Lack of independent verification that goods and services provided matched payments made
• Inadequate fraud risk assessment within procurement and disbursement processes

The scheme continued for years and involved the use of public funds intended to support vocational education programs. That is a reminder that fraud often persists not because controls are absent, but because red flags are not challenged.

What Boards and Audit Committees Should Be Asking:
✔ How are conflicts of interest identified, disclosed, and monitored?
✔ What controls exist to prevent a single individual from influencing vendor selection, contract approval, and payment processing?
✔ How are high-risk vendors monitored after onboarding?
✔ Are analytics used to identify unusual spending patterns, sole-source arrangements, or rapid increases in vendor payments?
✔ How frequently are procurement and accounts payable controls independently assessed?
✔ Does Internal Audit periodically review vendor relationships, procurement practices, and disbursement activities?
✔ Are employees comfortable reporting concerns through whistleblower channels without fear of retaliation?

One of the most important lessons from this case is that trust should never replace verification. Organizations often devote significant attention to financial reporting controls while underestimating the fraud risks that can arise within procurement and vendor management processes. Strong governance, effective oversight, and well-designed controls remain among the best defenses against these types of schemes.

Diverted millions meant for education

09/10/2026

I will be facilitating a session for the IIA Chicago Chapter next week on Mental Toughness and Overcoming Adversity at Work. I found this article while researching the topic and thought I would share.

When I think about adversity in the workplace, I often think about business challenges, organizational change, or economic uncertainty. However, some of the most difficult obstacles employees face stem from toxic workplace behaviors, including the abuse of power.

The article highlights a troubling statistic: more than two-thirds of employees who do not feel protected from workplace harassment cite fear of retaliation as the reason they remain silent. It also explores how power abuse can manifest through intimidation, retaliation, favoritism, micromanagement, public humiliation, and manipulation.

Mental toughness is often described as the ability to persevere through challenges, setbacks, and adversity. While developing resilience is important, organizations also have a responsibility to create environments where employees can raise concerns without fear and where leaders are held accountable for their actions.

From a corporate governance perspective, this is not simply an HR issue. Boards and executive leadership teams play a critical role in establishing the culture, ethical standards, reporting mechanisms, and accountability structures that help prevent abusive behavior from taking root.

Strong governance and healthy culture do not eliminate adversity, but they can prevent organizations from creating adversity for their own people.

What role do you believe boards and senior leaders should play in identifying and addressing abuses of power before they become cultural or reputational risks?

Power abuse persists in the workplace

09/02/2026

This week's fraud headline comes from the Wall Street Journal. It's another reminder that strong governance and effective oversight matter.

The founder of First Liberty Building & Loan recently pleaded guilty to wire fraud in connection with a $140 million Ponzi scheme that allegedly defrauded approximately 300 investors. Investors were promised attractive returns from short-term business lending activities, but investor funds were instead used to make Ponzi-style payments to existing investors and finance personal expenditures.

While every fraud scheme has unique characteristics, the underlying control failures are often remarkably similar.

• Excessive concentration of authority in a founder-led organization
• Insufficient independent oversight of investment activities and lending decisions
• Lack of transparency regarding the actual use of investor funds
• Weak monitoring of related-party transactions and conflicts of interest
• Inadequate verification that reported returns were supported by legitimate operating performance
• A culture where trust in leadership appeared to outweigh healthy skepticism and challenge

As auditors and risk professionals know, fraud rarely occurs because controls fail in a single area. It is usually the result of multiple governance, oversight, and monitoring breakdowns occurring simultaneously.

What Boards and Audit Committees Should Be Asking:
✔ How do we independently verify management's representations regarding financial performance and cash flows?
✔ What controls exist to detect management override of established processes?
✔ Are related-party transactions identified, reviewed, and approved through an independent process?
✔ Is there adequate segregation of duties around the movement and reporting of funds?
✔ Do we have effective whistleblower mechanisms that allow concerns to bypass management?
✔ Are internal audit, compliance, and risk management functions empowered to challenge senior leadership?
✔ What fraud risk indicators are being monitored and reported to the Board on a regular basis?

One of the most important lessons from cases like this is that strong financial results and a charismatic leadership team should never reduce the rigor of oversight. Effective governance is designed for the times when trust is misplaced.

Candidates face calls to return funds

08/29/2026

A former Williams-Sonoma executive recently pleaded guilty to participating in a $16 million kickback and commission diversion scheme involving warehouse equipment purchases, logistics services, and real estate transactions. The executive used a shell company to receive kickbacks from vendors and diverted brokerage commissions that should have been paid to legitimate third parties.

It is another unfortunate case of internal control and governance failures.

Here are some risk indicators worth noting:
1️⃣Excessive authority concentrated in a single executive responsible for vendor selection, contracting, and project oversight
2️⃣Inadequate conflict-of-interest disclosures and monitoring
3️⃣Weak due diligence over third parties and vendor ownership relationships
4️⃣Insufficient review of large procurement and real estate transactions
5️⃣Lack of analytics designed to identify unusual vendor payments and commission arrangements (which is much easier these days with AI)
6️⃣Limited independent oversight of strategic sourcing and capital project expenditures

For Boards and Audit Committees, this case serves as a reminder that fraud risk extends well beyond finance and accounting functions. Procurement, supply chain, facilities management, real estate, and vendor management activities often involve significant spending and can create opportunities for kickbacks, self-dealing, and undisclosed conflicts of interest.

Strong governance requires periodic conflict-of-interest certifications, robust third-party due diligence, data analytics focused on vendor risk, and independent reviews of high-dollar sourcing and contracting decisions. Internal audit should also periodically evaluate procurement and vendor management controls.

Fraud schemes of this nature rarely succeed because controls do not exist. More often, they succeed because oversight fails to challenge trusted individuals with significant authority.

❓❓❓What do you believe is the most effective control for preventing executive-level kickback schemes: vendor due diligence, conflict-of-interest monitoring, data analytics, or independent procurement reviews?

VP will be sentenced in federal court

08/26/2026

Come join me on September 16 for a 3-hour cruise on Lake Michigan.

The IIA Chicago Chapter's Career Advisory Committee warmly invites you aboard the Island Party Boat’s Enchantment for an unforgettable evening of professional connection, food, drinks, and skyline views — all while earning 1 hour of CPE!

Join the IIA Chicago Chapter on the lake

08/21/2026

A former finance director was recently sentenced to 6.5 years in prison after embezzling more than $10 million from his employer over a 16-year period. According to prosecutors, he concealed the fraud by altering bank statements, paying personal expenses with company funds, awarding himself unauthorized bonuses, and directing company funds to personal accounts.

While the dollar amount is shocking, the more important question for Boards and Audit Committees is: How did this go undetected for so long?

Almost every case I post on Facebook reveal common control breakdowns:
• Inadequate segregation of duties within the finance function
• Lack of independent review of bank reconciliations and cash disbursements
• Overreliance on trust in a long-tenured employee (Trust is important but it is not an internal control)
• Insufficient monitoring of executive compensation and bonus payments
• Failure to obtain bank information directly from financial institutions
• Weak internal audit coverage of treasury, cash management, and disbursement processes

Boards and Audit Committees should view this case as a reminder that prevention is not simply a management responsibility. Effective oversight requires periodic reviews of fraud risk assessments, independent validation of key financial controls, direct engagement with internal and external auditors, and ongoing scrutiny of areas where a single individual has the ability to both execute and conceal transactions.

Fraud schemes rarely begin as $10 million thefts. They often start with a small control failure that goes unnoticed. This case started small and built steam over 16 years. Strong governance, independent oversight, and a healthy degree of professional skepticism remain some of the most effective defenses against financial misconduct.

Former finance director pleads guilty

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