Metro 3 D.C. Schools Paid Mystery Company $59,000; Same Worker Handled Purchases With Credit Cards; Firm Named on Invoices Cannot Be Located Dan Keating Washington Post Staff Writer 1,365 words 1 September 2003 The Washington Post WP FINAL B01 English Copyright 2003, The Washington Post Co. All Rights Reserved Three District public schools for which the same employee handled purchasing paid $59,000 with government credit cards to a company that cannot be located for items that may not have been delivered. Bank statements show that the payments were made last winter to Mott's Sales & Service of Temple Hills. Mott's is not a registered corporation and has no telephone listing or Web site. Its invoices give an address that is an apartment building, but no apartment number is listed. The managers of the complex said that they had never heard of the company and that mail addressed without an apartment number would not have been delivered. The phone number on the invoices is for a cellular phone account no longer in service. When shown the invoices, the school system's chief operating officer, Louis J. Erste, questioned whether Mott's is a real company and whether any of the listed products -- which range from toilet plungers to computer software -- were purchased. Erste said school investigators will try to determine whether the records were fabricated to cover up embezzlement with the credit cards. In one case, invoices say Moten Elementary School paid Mott's $4,900 for purchase and installation of Classworks software in January. But the sophisticated teaching and testing product sells for at least $20,000, and an official at the company that makes the software said there was no record of the sale. "I haven't found anything that says Moten, and I certainly don't know anything that says Mott's Sales & Service, and we've never had a reseller by that name," said Theresa Poprac of Nebraska-based Curriculum Advantage. "Why they said it was our software is pretty stupid." Another invoice, written to justify a $2,400 payment to Mott's in December, says Moten received 300 gross of chalk -- 43,200 pieces of chalk -- and 500 chalkboard erasers. D.C. school officials said it would be unusual for a school to order such large quantities. "Oh my goodness. Chalkboard erasers?" said Moten Principal Charlene B. Quander. "They last forever. That's ridiculous." Quander, in only her second week at the Southeast Washington school, said she did not know what supplies were delivered last winter. Business manager Lorelle S. Dance handled purchasing at Moten and the other two schools, Rudolph Elementary and the Hamilton Center. Dance was suspended with pay from her job about a month ago based on reports of other questionable credit-card transactions at those schools.

Dance said in an interview in July that the purchases she made were arranged by the principals at the schools where she worked and that all she did was handle paperwork. Asked Friday about the payments to Mott's, Dance's attorney, former corporation counsel Frederick D. Cooke Jr., declined to comment. The bank statements and invoices for the Mott's charges were obtained under a Freedom of Information request by The Washington Post and cover six weeks between late November and the beginning of January. Ten of the 35 invoices include math errors -- for example, listing 10 items at $47 each for a total of $478. Some invoices are dated a month after the accounts were charged. The invoices are inconsistent in design, and product descriptions usually lack brand names. The company slogan on the bottom of the invoices reads that Mott's is "the source" for computer equipment and software, but the items purportedly purchased by Moten included 20 toilet plungers, 27 bottles of degreaser, 30 bottles of drain opener, floor stripper, bandages, 20 mops, file folders and 5,400 pens. Moten paid Mott's more than $30,000 during the six weeks. The flurry of charges came just as Moten's principal was retiring and before the arrival of an acting principal, who promptly froze the school's card use. According to the invoices, Hamilton paid Mott's for 250 chalkboard erasers, more than 21,000 pieces of chalk, 50 moisteners for sealing envelopes, porcelain cleaner, network equipment, a $2,000 computer rack and toilet paper. Invoices for Rudolph list 5,400 pens, $630 worth of staples and thousands of dollars for networking equipment and "training for computer lab." At the same time that the schools were paying Mott's for cleaning and stationery supplies, they were also making credit-card payments to established companies for similar items. In November and December, for example, Moten spent $30,000 with Capital Services & Supplies, a vendor registered with the District that sells supplies to many schools and city agencies. Dance, 39, was suspended July 31 after The Post inquired about $240,000 in credit-card payments from schools where she worked. Those payments, made to contractor Wiggins Telecommunications, included several charges for which invoices were missing and work could not be verified. Dance has twice filed for personal bankruptcy protection, in 2000 and 2001, and has since had payments withdrawn from her paycheck to cover debts. In the interview in July, she said her personal financial situation was irrelevant to her use of government credit cards. Five other school employees, including two principals, also were suspended with pay pending the outcome of a school system probe of payments to Wiggins. Erste said Friday that the payments to Mott's would be added to that review as well as to an ongoing federal criminal investigation of the Wiggins transactions. Charles C. Wiggins, 59, owner of Wiggins Telecommunications, said in a July interview that he had never heard of Mott's Sales & Service. According to public records, Wiggins and his family have used an address in the same 10-unit apartment building that is listed as the address for Mott's. Some of the invoices from Mott's list the same products and provide the same descriptions of items as the invoices from Wiggins Telecommunications for computer networking equipment. Wiggins's attorney, Bruce Richardson, declined to answer questions about Mott's on Friday. "My client is cooperating with everyone who is doing an investigation currently," Richardson said. "We're reviewing all records that relate to my client or reputedly are related to my client. There's other, more culpable parties, the investigation will show, than Mr. Wiggins himself." In the interview in July, Wiggins said he did not steal any money. He said he could not explain the details in the invoices from Wiggins Telecommunications because school employees, and not his company, created them. He said he processed credit-card charges approved by school officials, who generated invoices to explain the charges. The 790 D.C. credit cards, which are used by city agencies as well as the school system, are intended for incidental purchases up to $2,500. Rules forbid splitting purchases to buy more expensive items that are supposed to go through competitive bidding and formal procurement procedures.

After news articles this summer about abuse of the program, the school system and the city froze the cards, which were used to charge more than $40 million in the previous two years. The city and schools are retraining employees and putting stricter rules and tighter limits in place. Dance, who had charged a total of $435,500 on her government cards, used the cards to make purchases at Rudolph and the Hamilton Center. Although she also handled buying at Moten, the credit card at that school was in the name of librarian Carol Asomani. Asomani, one of the employees suspended over school payments to Wiggins Telecommunications, did not respond to telephone messages left at her home. The only other credit-card user to purchase from Mott's was Ludlow-Taylor Elementary business manager Sandra Weekes. According to invoices, the school paid Mott's $4,124 for padlocks, bandages, toilet paper, five toilet brushes, networking equipment and motherboards, among other items. Weekes also was suspended in July for payments involving Wiggins. She has an unlisted number and could not be located to comment.

1. Explain the fraud,
2. explain why you selected this particular case.
3. Describe the internal controls that were absent/ignored/or colluded against which enabled the fraud to occur.