Fraud Case Analysis
Fraud Examination & Forensic Accounting
Professor: David L. Cotton Meriann El Haddad
Student Travel Agent Fraud Analysis
Christopher Ryan Thomas, who ran a travel business, was sentenced for stealing students’ spring break funds. In September 2006, Thomas was selected as a travel agent by the senior class at Hampton University who were planning a spring break trip to the Sunset Beach Resort and Spa in Jamaica. From November 2006 through April 2007, Thomas collected approximately $200,000 from approximately 200 Hampton University students, which he deposited into his business account. From November 2006 through April 2007 Thomas spent trip funds collected from students on personal expenses totaling thousands of dollars. Thomas did not disclose these purchases to the trip participants.
In addition, in early 2007, Thomas was planning to hold a concert at Hampton University. He spent a substantial portion of the trip funds to rent the Convocation Center and to pay all other concert expenses, including expenses for entertainment, lodging, travel, and promotion. The concert related expenses totaled approximately $67,000. He didn’t get any authorization from any of the paying students for these disbursements. The spring concert was unsuccessful and resulted in the loss of substantial funds, with no profit returning to Thomas. Thomas was in short of cash and couldn’t make a full payment to the Sunset Beach Resort and Spa.
The fraud was discovered by the trip students when they checked into the Sunset Beach Resort and Spa and learned that Thomas had not paid their lodging expenses, resulting in a balance due to the Sunset Resort and Spa of approximately $90,825.
a) Type of fraud:
Asset misappropriation – cash
c) Fraud Triangle
I) Motive: We believe that one of Thomas’ motives for committing this fraud was greed. He spent part of collected trip fee on personal purchases. The second motivation might be financial pressure. It is
Professor: David L. Cotton Meriann El Haddad
Student Travel Agent Fraud Analysis
Christopher Ryan Thomas, who ran a travel business, was sentenced for stealing students’ spring break funds. In September 2006, Thomas was selected as a travel agent by the senior class at Hampton University who were planning a spring break trip to the Sunset Beach Resort and Spa in Jamaica. From November 2006 through April 2007, Thomas collected approximately $200,000 from approximately 200 Hampton University students, which he deposited into his business account. From November 2006 through April 2007 Thomas spent trip funds collected from students on personal expenses totaling thousands of dollars. Thomas did not disclose these purchases to the trip participants.
In addition, in early 2007, Thomas was planning to hold a concert at Hampton University. He spent a substantial portion of the trip funds to rent the Convocation Center and to pay all other concert expenses, including expenses for entertainment, lodging, travel, and promotion. The concert related expenses totaled approximately $67,000. He didn’t get any authorization from any of the paying students for these disbursements. The spring concert was unsuccessful and resulted in the loss of substantial funds, with no profit returning to Thomas. Thomas was in short of cash and couldn’t make a full payment to the Sunset Beach Resort and Spa.
The fraud was discovered by the trip students when they checked into the Sunset Beach Resort and Spa and learned that Thomas had not paid their lodging expenses, resulting in a balance due to the Sunset Resort and Spa of approximately $90,825.
a) Type of fraud:
Asset misappropriation – cash
c) Fraud Triangle
I) Motive: We believe that one of Thomas’ motives for committing this fraud was greed. He spent part of collected trip fee on personal purchases. The second motivation might be financial pressure. It is