White Collar Fraud Watch: a Dancing CFO, a Spanish Princess and a Vatican Accountant

By | 1 year ago

An embezzling CFO, a tax-evading princess, and a money-laundering Vatican accountant walk into a bar. Oh, sorry, I meant a court room, to answer for their respective white collar crimes. This may sound like another GC witticism -– we think we're hilarious over here -– but this time, I didn't make anything up. As it turns out, these individuals are an actual bunch of white collar scofflaws. True story.

The Embezzling CFO
According to his LinkedIn, Michael LaJoice, 36, won the Community Hero Award from his local chamber of commerce. According to the Oakland County Sheriff, LaJoice won that award while “living a lifestyle, including philanthropy, with other people's money." Earlier this month, Bouchard admitted to embezzling $20 million over his twelve years as CFO of Clarkston Brandon Community Credit Union.

Wait. Do the math. He became CFO at 24? In the same year that he graduated with his accounting degree from Baker College? Which idiot made that hiring decision?

He confessed the theft to authorities after state auditors found "potentially serious accounting irregularities during a routine visit from the Department of Insurance and Financial Services.” LaJoice, who made $65,000 a year as CFO, allegedly used the stolen funds to buy a multi-million dollar home and a dance studio. (“I am the Lord of the Dance,” said he.) He also invested the stolen money into “a major $31 million redevelopment project in downtown Fenton that was to include a two-story restaurant with a dueling piano bar, a fresh market, 53 condominiums, a parking structure and retail space along the Shiawassee River."

So in twelve years LaJoice goes from a $65k-a-year CFO of a credit union… to a multimillionaire Lord of the Dance who owns both a mansion and riverside property development, and it took a pack of auditors to figure out he was stealing? Really?

LaJoice is currently being held in the Oakland County Jail on $1 million bond and will undergo a psychological exam to assess whether he is competent to stand trial.

The Tax-Evading Princess
Princess Cristina, sixth in line for the Spanish throne, married an Olympic handball athlete. (Handball is an Olympic sport? Who knew?) Princess Cristina sat on the board of the Noos Institute -– her Handballer Husband's nonprofit. The Noos Institute organized sporting events for regional governments and then allegedly overcharged the regional governments and received more than €5.6 million in public funds. Cristina's Handballer Husband currently faces corruption charges for this scheme along with fifteen other people.

Although prosecutors allege the Princess knew about the fraud, they couldn't prove it. She got into actual trouble because she and her Olympian Handballer Husband transferred €1 million from the Noos Institute into their jointly owned company (Aizoon). Then the Princess and the Handballer used that money for personal expenses and failed to pay taxes on the money. Now Princess Cristina faces tax fraud charges. (If this were a Disney movie, I'd pause here to break into song, but alas.) If convicted, BBC says that Princess Christina could face up to eight years in prison while her husband could face up to nineteen. Yikes.

The Money-Laundering Vatican Accountant
Although an Italian court recently acquitted Vatican accountant Monsignor Nunzio Scarano on corruption charges in an alleged "plot to use a private plane to try to smuggle 20 million euros (about $22 million) from Switzerland into Italy in a tax-evasion scheme," Scarano is still on trial for using his Vatican bank accounts for money-laundering.

Italy's financial police said the monsignor was suspected of transferring millions of euros in fictitious charity donations from offshore companies through his accounts at the Vatican's bank. […] Scarano had taken donations from people he thought were acting in good faith to fund a home for the terminally ill. [Instead], Scarano used the money to pay off a mortgage.

Pope Francis has been trying to stop corruption within the Vatican and to create transparency within the Vatican Bank for a while with a little help from our Big 4 buddies. At the Vatican now:

KPMG is implementing uniform, internationally accepted accounting standards to replace the Vatican’s previous crazy quilt of bookkeeping. EY […] is scrutinizing management of the Vatican’s stores, utilities, and other municipal services. Deloitte & Touche now audits the accounts at the Vatican bank.

In June 2015, Pope Francis named Libero Milone, the former chairman and CEO of Deloitte Italy, as the Vatican's Auditor General.

Finally, in December 2015, Pope Francis hired PwC as the Vatican's official outside auditor. That audit team is auditing the Vatican RIGHT NOW!

Wow, Vatican City is just crawling with Big 4 brethren! I wonder how much firm-branded swag the Pope got while the partners bid for the job? What I wouldn't give to see a photo of His Holiness sporting an EY luggage set or a KPMG laptop case. I'd settle for a PwC hot-water-activated-color-change-mug. Something. Anything!

Anyway, PwC will audit financial statements that include:

assets that would never be sold and thus have no market value — including St Peter’s Basilica, the Sistine Chapel and priceless art treasures by Michelangelo…though the Vatican is still considering whether and how they should be valued.

According to Bloomberg, “the Vatican’s total assets were worth more than $3 billion. Separately, the Vatican Bank, has 6 billion euros ($6.4 billion) in deposits, and assets under management and custody for clients.”

I would love to be on that audit team. I wouldn't even mind the group lunches… as long as Pope Francis could come along, too.

Image: iStock/Sohel Parvez Haque

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