Where Most Needed

Back-to-back stories bring home the risk to charities of gambling-related embezzlement wherever casinos appear.  The Omaha World Herald reported the story of Sister Barbara Markey, accused after an audit of diverting $307,545 in funds from the Archdiocese of Omaha, including $81,149 in cash  and $67,656 on casinos.  The nun appeared in court on Friday, maintaining her innocence of the charges.  Defense attorneys claim that it is a misunderstanding over the use of proceeds from a popular marriage preparation manual that Sister Markey co-wrote. 

Earlier in June, the same paper reported on the sentencing of Cory Pelnar to a five year probation after she paid back $180,000 stolen from St. Bernadette parish where she was business manager.  There is also a civil suit that claims that the total taken was $335,000.  As part of the probation, Ms. Pelnar must attend meeting of Gamblers Anonymous (national service office EIN 95-2273317 Form 990) for 18 months. 

The lack of internal controls in small charity organizations (they usually have solo bookkeepers) puts them at particular risk for this type of fraud.  The National Coalition Against Legalized Gambling (EIN 38-3244246 Form 990) claims that rates of pathological gambling tripled in Iowa after legalization of casinos (to 5% of the adult population).  They say that more than half of all pathological gamblers eventually commit felonies, usually financial crimes like embezzlement, and that most have never before committed a crime—so background checks aren't going to help.