The former chief financial officer of a Dallas-based charity for children was recently sentenced to five years in prison after he pled guilty to wire fraud.
Federal prosecutors accused former Child and Family Guidance Center CFO Jeffrey Scott Keehn of a scheme that stole about $2.1 million from the nonprofit from 2016 to 2023. Keehn, 55, used the nonprofit’s checking account to write fraudulent checks to himself. He falsely claimed the payments were being made to medical providers and other vendors.
Each payment was less than $10,000 because the nonprofit required payments that exceeded that amount needed to be reviewed by higher-ups. In total, he submitted about 250 checks into three different bank accounts in his name, according to court documents reviewed by The Dallas Morning News.
The nonprofit’s mission is to provide affordable mental health services to children and families.
But…
PAYROLL & HR CONTROLS (PREVENTING “GHOST” SCHEMES)
Payroll fraud is often the hardest to detect because it “looks” like a normal business expense.
- Segregation of Duties (SoD): The person who adds new employees to the system must not be the same person who approves the monthly pay run.
- Mandatory Vacation Policy: Require all financial and HR staff to take 5–10 consecutive days of leave annually. Fraud often surfaces when the perpetrator isn’t there to “hide” the trail.
- Ghost Employee Audit: Perform a quarterly “Headcount Reconciliation” where managers must physically verify every name on their payroll list exists.
- Self-Pay Blocking: Ensure the payroll software has a hard-coded block preventing administrators from editing their own salary or bank details.