Minnesota Auditor Sentenced to Five Years in Prison for $2 Million in Fraud

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Who audits the auditor? This story is a stark reminder that even those entrusted with checking the books need to be checked from time to time. A now-former auditor for the Minnesota Department of Revenue has been sentenced to five years in prison for a scheme to defraud the state – and its taxpayers – out of $2 million. What’s most surprising, however, is that the crime had eluded her fellow colleagues for five years!

Accountability in public officials is a bedrock component of the public trust, which is why this story is so corrosive.

The State Revenue Commissioner has already taken steps to reform the process so something like this can never happen again; the office is moving to a new integrated tax system and putting in place updated approval requirements. Plus…he’s hired a new internal audit manager whose sole job will be to improve the quality and efficiency of the audit process while keeping an eye on detecting fraud.

Two million dollars is a lot of money – and five years is a long time – but every year fraud costs states in the hundreds of millions. Public interest, scrutiny, and action must be extended to that as well, because there is only one point and purpose for having an auditor. One word, in fact: accountability.

Source: Today’s ”Fraud of the Day” is based on an article entitled, ”Former Department of Revenue auditor sentenced to prison,” by James Walsh published by the Star Tribune, Sept. 7, 2011.

Minneapolis — The architect of a scheme to defraud Minnesotans out of nearly $2 million was sentenced to five years in federal prison Wednesday.

Pamela Dellis, a former auditor for the Minnesota Department of Revenue, said a gambling addition caused her to concoct a scheme that involved creating more than 200 phony state tax refunds. Dellis enlisted her sister and niece to help with the fraud that lasted nearly five years.

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