Shell game shellacking; one tequila, two tequila; cryptocurrency con; and other highlights of recent tax cases.
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Wilmington, Delaware: Wendell Smallwood Jr., 31, a former Philadelphia Eagles running back and Super Bowl champion, was sentenced to 18 months in prison for wire fraud, conspiracy to commit wire fraud and conspiracy to defraud the IRS. Smallwood was ordered to repay the government $645,000. He pleaded guilty in December 2024 to orchestrating schemes that defrauded COVID-19 relief programs and the IRS.
Smallwood earned about $500,000 in NFL paychecks in 2020 and 2021 — after he began carrying out the fraud. His conviction marks a steep fall for the former athlete, who rose from Wilmington’s tough streets to making $3 million over six seasons with the NFL.
Scranton, Pennsylvania: William Freeman IV of Tobyhanna, Pennsylvania, was sentenced to 30 months in…
CLICK HERE to read the FULL Tax Fraud Blotter: Running backlash | Accounting Today article.
PROCUREMENT & EXPENDITURE (STOPPING KICKBACKS)
Procurement fraud usually involves inflated invoices or “fictitious” vendors.
- The Three-Way Match: Never pay an invoice unless you have matched the Purchase Order (PO), the Delivery Note (signed), and the Supplier Invoice.
- Vendor Master File Review: Review your vendor list annually. Look for suppliers with the same bank details or physical addresses as your employees.
- Dual Authorization: Implement a “Two-to-Sign” rule for all EFT payments above a certain threshold (e.g., R5,000).
- No “Cashing” of Checks: If you still use physical checks, strictly prohibit “Cash” as a payee and store blank checks in a dual-lock safe.