Green Room

$433K Union Theft Not Reported Because of “Potential Impact on Membership”

posted at 12:30 pm on March 11, 2013 by

The theft of more than $433,000 by a former local treasurer was covered up by the Maryland State Education Association (MSEA) because the union feared the “potential impact on membership and loss of members,” according to an insurance claim document obtained by the Salisbury Daily Times.

Denise Inez Owens was the treasurer of the Worcester County Teachers Association (WCTA) when she stole state and national dues money to feed her gambling addiction. MSEA discovered the embezzlement in March 2009, but failed to report it to authorities. Instead the union persuaded Owens to sign a confession and agree to a restitution plan. Owens then resigned her union position and returned to work as a middle school teacher without notifying the school district of her predicament.

MSEA ordered a forensic audit of the local union’s finances, then filed an insurance claim that stated the offense was “Not reported because of potential impact on membership and loss of members.”

The cover-up was not discovered until the Daily Times found evidence in WCTA’s IRS filings in February 2012. The union had failed to submit required paperwork because of the mess Owens had left behind. It asked the IRS for leniency because “a substantial amount of money was embezzled.” The newspaper turned over its findings to law enforcement authorities, who subsequently filed charges against Owens. She pleaded guilty to a single count of theft and was sentenced to two years in prison.

The story will probably end there, but authorities haven’t completely closed the case yet.

“We are certainly looking at anyone who had a role in the theft of the funds, or anyone involved in a cover-up,” said Worcester County State’s Attorney Beau Oglesby. “Their actions continue criminal behavior, and we are happy to charge and prosecute.”

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Shouldn’t those who are in charge of the union involved in the coverup of $400,000 stolen from members be charged? Are they not complicit?

Shouldn’t the thief be charged with income tax evasion? Shouldn’t we get a share of that money as tax?

originalpechanga on March 11, 2013 at 12:36 PM

Look for that Union Label!

Vanceone on March 11, 2013 at 12:37 PM

So, even thought she stole close to a half million bucks, she will not lose her pension. lol!

Blake on March 11, 2013 at 12:40 PM

Shouldn’t those who are in charge of the union involved in the coverup of $400,000 stolen from members be charged? Are they not complicit?

Misprision of a felony, I think – knowing a felony was committed and not reporting it to the authorities.

mrsknightley on March 11, 2013 at 12:42 PM

I ran a med small start up company. I was young and hired a CFO twice my age. He embezzled a large number. He hired an attorney that I knew. The settlement was restitution which we needed instead of prosecution.

His getting me to sign a statement saying i would not file charges protected him from jail.

I had previously worked for a regional CPA firm I reported the number to the IRS as taxable income for him. He had to pay taxes on the money. He could not take reimbursement as a business expense.

It is not a deduction.

seven on March 11, 2013 at 1:32 PM

Look for that Union Label!

Vanceone on March 11, 2013 at 12:37 PM

“Stolen in the USA”

“Stolen from the USA” Oops, that should be the Government/IRS label.

parke on March 11, 2013 at 1:35 PM

Call it re-distribution. No harm in that, eh?

BobMbx on March 11, 2013 at 2:13 PM

Why am I not surprised…

RedInMD on March 11, 2013 at 2:22 PM

The “membership” must be delighted.

Barnestormer on March 11, 2013 at 2:35 PM

… ad an EDUCATION UNION at that!!

Don’t these people ever get mothly audits??

Khun Joe on March 11, 2013 at 3:41 PM

Since it wa a union thug – it wasn’t embezzlement embezzelment….

dentarthurdent on March 11, 2013 at 4:45 PM

seven on March 11, 2013 at 1:32 PM

The most boring accounting classes I ever took were “systems” and “auditing”. Of course they meant nothing to me at the time (that’s why I always advise people to get some real-life experience with a BBA before pursuing an MBA). Only after a few years on the job did I realize the importance. I read all these stories about theft and shake my head…without an accomplice they are so easy to prevent.

Khun Joe on March 11, 2013 at 3:41 PM

Please read above. And I’ll add that theft prevention is the role of the organization, not the external auditor whose job is primarily to opine on the financials as stated (e.g. if you make $100 but your employee steals $25, as long as you only report the $75 net your auditor will usually be happy). Only a small part of an external audit is a test of the internal controls. Internal audit is different but they obviously didn’t do that either.

I bet I could go into 100 “non-profits” and find some problems in 80 of them. It’s not their money and they don’t have shareholders to report to, so they don’t seem to care.

teejk on March 11, 2013 at 5:02 PM

“Move Along. Nothing to See Here,” said Governor O’Malley

bobnox on March 11, 2013 at 5:26 PM


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