Less than six months after pleading guilty to forgery and receiving a suspended sentence, she went to work for a nonprofit and picked up where she left off.
Even when a nonprofit does a background check, it can be still get burned. The Concord (NH) Monitor (Annmarie Timmins) reports that Valerie Frabotta is accused of issuing herself checks totaling over $300,000 since she started in 2002 with the Capital Regional Development Council (civic organization EIN 02-0455162 Form 990).
Six months before she started, she had received a suspended sentence for forging $15,000 in checks from a previous employer. The CRDC executive director says that a background check at the time showed nothing, possibly because the conviction was so recent. It does not appear that Ms. Frabotta listed the previous employer on her resume.
There's no information in the story about how the fraud came to light and why it took so long to detect.
The Form 990 shows an organization with almost $900,000 in income from fees, government grants, and a small endowment. Expenses are about the same and the organization has a staff of just eight. According to the CRDC web site, it is the certified development company for SBA 504 loans for the state of New Hampshire. Thus, the organization has a loan portfolio and borrows money itself, and as a result there is plenty of cash around.
What this shows is that organizations really have to run periodic background checks of key financial personnel even after they are hired. It's not too extreme to suggest that a credit check and a criminal background check be run every year or every other year on staff who can write checks, especially in an organization too small to have robust internal controls, which is often the case with organizations with less than 200 staff or $10 million in expenses.