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March 2015. A man is sitting on his couch watching a rerun of American Greed. This episode is about an accountant who stole $8.7 million from his employer and disappeared. Nobody's found him, and the man on the couch knows the face. He's hiked with that face. He has pictures of him from the trail, but the name they're saying on TV is not the name he knows, which is a problem, because the FBI has been looking for this guy for six years.

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This is oh My fraud. A true crime podcast where opportunity knocks and pressure and rationalization. Open the door. I'm Caleb Newquist. How's it going? How's it? How's it going? How's it going? What's going on? Um, let's let's dispense with the pleasantries and we will get into a quick fraud story, shall we? Okay. I came across this one recently, and it was interesting. Uh, and not for the crime necessarily, which is, you know, pretty banal, but, um, but rather the media coverage and what it was that caught my eye was virtually every story I found was going off of this, uh, Justice Department press release. And it's from August 27th, 2026, so very recent. And the title ran Porcupine Man sentenced to more than six years in federal prison for wire fraud and money laundering. And then there's a there's mostly local coverage. There wasn't a lot. There wasn't national coverage. But the local coverage from Kelo, Sioux Falls, South Dakota. Porcupine man sentenced for $4.7 million theft and wire fraud. Dakota News Network Porcupine man sentenced to six years in prison for wire fraud and KOLA Rapid City uh. Porcupine man sentenced to more than six years in $4.7 million tribal fraud case. And so, yeah, I read a couple of those headlines and I'm just like, porcupine man, what the hell did he escape from, like a freak show at Coney Island? Or maybe the freak show of the Badlands? I don't know, Porcupine Man.

Like, what a sight this guy must be. And so this led me down quite the rabbit hole, I have to say, of internet searches, which of course I, I this happens to me all the time. But porcupine, of course, a porcupine man. Turns out, among many other weird things, porcupine is a Marvel supervillain because of course look like why? Why is there a porcupine supervillain? But then there's another character in the X-Men called Quill. It's all very confusing and stupid, and, you know, we're just gonna have to leave it there for the case of this, for the purposes of this conversation. The point is, the porcupine man, a porcupine man, committed a fraud. And that's what's important for our purposes. Now, I think I'm thinking to myself, well, I've got a I've got an episode on my hands. This is a this is this is going to be what is this porcupine man? No, no. Porcupine is a tiny town in South Dakota and I grew up in Nebraska. I had never heard of porcupine, South Dakota and a porcupine man. The Porcupine man is a resident of this town of said town. Guy's name is Patrick Ross, and it reminded me that I grew up with Patrick Ross. But this Patrick, the fraudster Patrick is 56, so it's not the guy I grew up with. Anyway, but this. Yes, this Patrick Ross, he committed fraud. He stole 4.7 million from the Oglala Sioux Tribe from their general fund.

He got six six years in prison for his trouble. You know, nothing too remarkable about it. This guy Ross is a tribe member. And his coconspirator also a tribe member. I believe they were working in the Tribal employment rights office, and they intercepted checks that were being paid by contractors, and they just diverted them into a bank account that they opened for the purposes of just carrying out a fraud. And they managed to do this for seven years. And, you know, there must have been some kind of deception going on because they carried it on for so long. But, you know, none of the stories make that clear. But in any case, there you go. Some fraud. Porcupine man, a porcupine man. No, just a man from porcupine. Some fraud news, some fraud news from the High Plains. If you have comments, questions, or see a good story, either for a mention or even for an episode. Email us at admin@cpe.com. And do not forget to rate the show wherever you get your podcasts. It does help us out. Brings other people to the show. All right, that's enough business. Time for some fraud. James T Hammes was born in Milwaukee on April 30th, 1962. He was the oldest of three boys and accounting was already in the family. His father had briefly considered becoming a Catholic priest before getting married and becoming an accountant instead. Jim was the only one who eventually followed his dad into the profession.

The family moved to Springfield, Illinois, in the 1970s. Hammes attended Glenwood High School in nearby Chatham, where he played football and wrestled. Someone who knew him back then, later on said there was a little of the All-American boy in him. After graduating in 1980, Hammes initially went in a different direction. He had a scholarship to attend a mechanics school in Iowa, but he didn't stay. He returned to Springfield and began studying accounting at Sangamon State University, which is now the University of Illinois, Springfield. That's where he met another accounting student named Joy Johnson during the spring semester of 1984, and they married that December. Hamas went to work for a Coca-Cola distributor in Springfield, and in 1986 he enjoy. Had their daughter, Amanda. The family eventually moved to Cincinnati and then Lexington, Kentucky. In Lexington. The family's life looked pretty ordinary. They took vacations to Florida, attended Christ the King Catholic Church, and Joy volunteered at God's Pantry, a local food bank. Somewhere along the way, hams defected to the dark side in the soft drink wars. In 1995, G and J. Pepsi Cola bottlers hired him as controller of its southern division. G and J is a multi-generational family business founded in 1925. It bottles and distributes Pepsi products, and in case you are not familiar with how the beverage industry works, you just understand that this isn't PepsiCo itself. But it's a independent bottler responsible for getting Pepsi Mountain Dew and you know, whatever else Pepsi owns into stores, restaurants, vending machines, gas stations, a distributor.

Right? And if you're a controller, that can mean different things at different companies. But here's what it meant at G and J. Hamas was responsible for the southern division's accounting and internal controls. He also supervised accounts payable and which is, you know, how G and J paid its vendors, made sure the bills get paid. So he had a hand in the money going out, the way those payments were recorded and the controls that were in place to make sure none of it went sideways. And by now you probably already see the problem. There was nothing, no one standing between James, Hamas and the checkbook because James Hamas was the person standing between everybody else and the checkbook. By the time he'd been doing the job for a few years, Hamas knew the system inside and out. He knew how vendors got set up, how payments got processed, how expenses were recorded, and what information eventually made its way from Lexington back to the company headquarters. And in 1998, he figured out how to use that knowledge for, let's say, opportunistic purposes. One of G. And J's legitimate vendors was a company called C W Zombie Company, another old family owned business founded in 1843. Very old family business. Zombie supplied plastic wrap materials used on G and J's Pepsi bottles. Hamas opened a bank account at National City Bank in the name of c w Zombie Company, and you'll note that that is not a similar name.

It is the actual company's name. Now, how National City allowed him to open that account without authorization from zombie is not known, not explained. But what we do know is that the signature card listed for that account has Hamas's own name and his own home address. Then, inside Ganga's accounting system, he created an unauthorized vendor account tied to Zumbühl. Now, because Zumbühl was a real G and J vendor, a check made out to them wouldn't look strange. G and J actually did real business with CW Zumbühl company. I have to imagine they did a lot of business with them. It stands to reason that they still do lots of business together. Inside G and J gym, Hamas could make a fraudulent payment look legitimate. An outside G and J. He had a bank account with the real vendor's name on it, and that's all he needed to make his scheme work as well as it did. The next step was getting G and J to send money there. And because Hamas supervised accounts payable, that part was probably easier than it should have been. When Hamas wanted one of these payments made. He would bring a check request to an accounts payable employee and tell them to issue a check using the unauthorized zombie vendor account he had created. According to court records later reviewed by the Association of Certified Fraud Examiners, the check request came without supporting documentation.

No invoice, no purchase order. Nothing showing that G and J actually owed zombie all the money. And normally that should just stop a payment. But the person asking for the check wasn't some employee from sales wandering into accounting with a handwritten note. It was the controller. Hamas supervised the department. He was responsible for the division's accounting, and he was the person who was supposed to know whether the payment was legit. So when Hamas told someone to cut a check, they cut a check. Then he gave them one more instruction don't mail it to Zumba. Ill give it to me. Hamas would then take the check and deposit it into the national city bank account he had opened in Zombie's name on the G and J side. The company appeared to have paid one of its regular vendors on the bank's side, a check payable to Zumba had been deposited into an account bearing that same name, James. Hamas was hiding his fraud inside something completely ordinary, And yet Hamas hadn't exactly gone to great lengths to hide who was behind it. As we said, the bank's signature card listed James Hamas's own name and home address and the backs of the G and J checks deposited into that account had his endorsement. So, in other words, the evidence was right on the checks this entire time. Once the money reached that account, Hamas could move it wherever he wanted.

Checks were written from the unauthorized zombie account directly to Jim Hamas and deposited into his personal account at Fifth Third Bank, sometimes within only a day or two of the original G and J payment. So the basic path was remarkably straightforward. Hamas kept doing this year after year, and by the final years of the scheme, the amounts were enormous. Between 2000 and 7 and February 2009, roughly $3.3 million in G and J funds passed through the unauthorized zombie account. Almost all of it then moved into Hamas's personal Fifth Third account. A significant amount moved again from there. Over that same period, investigators traced at least 1.6 million in electronic transfers from Hamas's personal account into a TD Ameritrade brokerage account. And these weren't always small transfers. The charge transfers into his brokerage account range from $9,260 to as much as $200,000 at a time, which meant Hamas wasn't just stealing company money and spending it as fast as it came in. He was investing a substantial portion of it. But some of the money was beginning to show up in his life. Hamas was a licensed pilot and an avid scuba diver, and he took trips to places like the Caribbean. When members of his family wondered how he could afford it, Hamas told them that he had done well on an investment in a software company. That was the explanation Hamas gave to his family.

For years, Hamas had managed to turn a legitimate vendor, an unauthorized bank account, and his authority over accounts payable into a pipeline that moved his employer's money into his own bank and brokerage accounts. But getting the money out of G and J was only half the problem, because every one of those checks still had to go somewhere in the books. And so the next problem was the accounting. Every fraudulent check reduced G and J's cash, which meant Hamas needed somewhere in the general ledger to put the other side of the transaction, Hamas would charge the fraudulent zombie payments to a miscellaneous account. But he understood that he couldn't just let that balance keep growing forever. A miscellaneous account with a growing balance is eventually going to attract attention, and attention was not especially helpful to what Hamas was trying to accomplish. So he moved things around. According to prosecutors, Hamas manipulated legitimate accounts in gas books to offset the amounts accumulating in the miscellaneous account. Then, when his division prepared its monthly accounting reports for company headquarters, Hamas altered those reports, too. He wasn't just making fraudulent payments. He was also changing the records afterward. So the people above him were looking at financials. He had already cleaned up. And once again, his position made that much easier. Hamas supervised accounts payable, could create vendors and approve payments, and was also responsible for the records and controls that reflected those payments afterward. There were even two zombie vendor codes in Garr system, one associated with the legitimate vendor relationship and another tied to the account Hamas was using for the fraud.

And like virtually every other accountant we've talked about on this show, Hamas didn't discover some secret flaw in banking technology. He didn't break encryption or exploit a loophole nobody had ever seen before. What protected him was authority. An accounts payable employee saw a request from the comptroller and processed it. Company headquarters received reports prepared by the Comptroller and relied on those. The person responsible for the controls was also the person overriding them. Fbi Special Agent Jonathan Jones later put it this way, quote, he got away with it for so long because he knew how to manipulate his subordinates and how not to raise accounting red flags, and he kept exploiting that weakness for more than a decade. The bear market of 2007 2009 hit Hamas hard. According to the FBI, he had invested a majority of the money he stole. And when the market collapsed in September 2008, he lost most of it. That left him in an unusual financial position for someone who had stolen almost $9 million, a huge portion of the money was gone. But the system he had built for taking more was still there, and Hamas kept using it into early 2009. In 113 day stretch in January 2009. Three transfers detailed in the indictment totaled $590,000. Another $190,000 followed on February 18th.

By then, the missing money was no longer his only problem. As his investments grew. Hamas started receiving 1099. He paid at least $2.7 million in estimated taxes using money stolen from G and J, but still failed to file personal tax returns for multiple years. Don't know why he would do that, but there you have it. And so by 2009, Hamas had managed to create the fairly unusual situation where he was stealing millions of dollars from his employer, voluntarily paying taxes on some of the proceeds, and still getting the attention of the IRS because he wasn't filing tax returns. Meanwhile, the fraud at G and J was reaching its end by February 17th. The company had begun reviewing checks issued to Zumbühl and discovered that $4.6 million had been deposited into an unauthorized account since at least 2004. By the end of that same day, the FBI was involved and had interviewed Ncjw's chief financial officer. James made his final transfer. On February 18th, 2009. So by the time he moved that last payment, people were already looking. And once they began examining the underlying transactions, the things that had sat unnoticed for years became considerably harder to explain. The company was dealing with checks supposedly issued to a legitimate vendor, but deposited into an unauthorized account at a different bank. Hamas's own endorsement appeared on the checks. Zambia's financial manager later confirmed that Hamas had no authority to endorse or deposit those checks, and that the real Zambia company never received any funds from them.

The paper trail was not subtle. It had just gone unchecked. Within days, Hamas was called to Gjs headquarters in Cincinnati, where the FBI questioned him on February 23rd about the fraudulent checks. Hamas repeatedly denied knowing anything about the scheme. And eventually he asked for an attorney. The interview ended and he walked out of Garr headquarters. He was supposed to return home to Lexington, but he never made it. The next day, February 24th, a federal arrest warrant was issued for James Hamas. When investigators searched his home, they found evidence suggesting that his disappearance had not been an impulsive decision. After a bad meeting with the FBI, Agents recovered boxes of records documenting the fraudulent transactions, but they also discovered that Hamas had been researching how to disappear. Prosecutors later said investigators found books and internet research about assuming a new identity. They also found a birth certificate and death certificate belonging to an infant who had died years earlier. So while Hamas had spent 11 years preparing the accounting records for the possibility that someone might look at the books, he had apparently also spent some time preparing for the possibility that someone eventually would look at the books. Now, there was also a much darker question surrounding Hamas by then that we are not going to spend a ton of time on, but there is some relevance. His first wife, Joy Johnson. Hamas, had died after a fire at their Lexington home in 2003.

Their daughter, Amanda was out on a date that night. Firefighters pulled Joy from the house, but she later died from her injuries. Investigators ruled the fire accidental. They found no sign of accelerants, although there were differing conclusions about exactly how it started. Nevertheless, Hamas was never charged with anything related to the fire. But after the embezzlement came to light and Hamas disappeared, members of Joy's family began publicly questioning whether her death had really been accidental. They raised those suspicions on American greed, and federal agents later reviewed the old fire investigation. Nothing conclusive came from it. The fire chief later said there was not enough evidence to accuse hams of anything. And so Hamas was an embezzler and a fugitive. There's no evidence establishing that he killed his wife. He remarried in 2006, three years after Joy's death. In May 2009, a federal grand jury returned a 75 count indictment against him, 38 counts of wire fraud and 37 counts of money laundering for a scheme the government valued at $8,711,282.42. The government now had a detailed case against James Holmes. What it did not have was James Holmes. For most of the next six years, Holmes was not hiding in another country or living anonymously in some big city. He was hiking. More specifically, he spent much of his time on the Appalachian Trail or Appalachian Trail, whichever you fancy. Also known as the A T, that's the 2200 mile route stretching through 14 states from Springer Mountain in Georgia to Mount Katahdin in Maine.

Many of you have probably heard of it, and maybe you even hiked part of it. There's a well-known book, A Walk in the Woods by Bill Bryson. It's very good. It was published in 1997. Very funny. It's about his attempt to thru hike it with a longtime friend. It was later made into a movie with Robert Redford and Nick Nolte. Mixed reviews. But anyway, as places to disappear go, the trail had some real advantages. People came and went constantly. Living out of backpacks for months at a time was completely normal, and hikers routinely introduced themselves using trail names instead of their real ones. And on the trail, James Hams became Bismarck. He grew a long beard, slept in a hammock instead of a tent and carried an iPod that he sometimes used to play music for other hikers. He was Catholic and apparently serious. Enough about it that on one occasion, when a group of hikers caught a ride into town for a big breakfast, Bismarck stayed behind so he could go to church. In other words, he didn't spend six years skulking through the woods trying not to make eye contact with anyone. He made friends. David Miller, who writes the A T guide, said Bismarck was unusually visible for someone on the trail. He appeared in hikers photographs and journals, showed up on social media and even sent Miller corrections and updates for future editions of the guide.

Stuff like whether a hotel was offering a special rate to hikers. So while the FBI was trying to find James Hams. James Hams was voluntarily helping maintain one of the standard guidebooks for the trail he was hiding on. There's a picture of him laughing during a water gun fight. If your plan for avoiding the FBI involves becoming a recurring character and other people's vacation photos, there might be some gaps in the plan. But Bismarck wasn't just visible. He was part of the community. One of the hikers who got to know Bismarck was Patrick Bradlow. The two spent about three weeks hiking together through Maine in 2014 and stayed in touch afterward. Hammes told Bradlow his name was Brian Wofford. But beyond the name, he gave him a surprisingly accurate version of himself. He said he was from Wisconsin, that he was 52, that he had a daughter and that he liked scuba diving. All true. He also said he was a widower. Also true. But he was also remarried, and Breslow had an interesting background for someone Hamas managed to fool. He was a retired federal bank examiner and a former certified civil fraud examiner for the U.S. Treasury. And he never suspected a thing. He had his story down, Breslow later said. I took it hook, line and sinker. Other hikers remembered him as friendly and helpful. He returned regularly to Trail Days, the annual festival in Damascus, Virginia, where thousands of Appalachian Trail hikers descended on a town of fewer than a thousand people.

He became a regular at the Montgomery Homestead Inn, where the owner, Susie Montgomery, later said, quote, I'd say he was one of my favorite guests. He was a smart man, interesting to talk to, a pleasant personality. All of the other people who stayed here liked him. He also formed relationships that lasted from one hiking season to the next, and one of the closest was with a woman whose trail name was Hopper. Her real name was Terri Hanavan. Her husband had died of cancer in 2009, and the following year she was on the a T spreading his ashes. That's around the time she met Bismarck. Hamas had been telling hikers that his own wife had died, that he had said goodbye to his daughters, and that he was wandering the trail in search of peace. Did the other hikers, the two of them, made perfect sense together. They were both experienced. They were both religious. To the people around them, they were both grieving the loss of a spouse. They hiked together for years and were known around the trail as a couple with a terrific reputation. And Bismarck. Bismarck had stories around a campfire at the Moorland Gap shelter. He told another hiker that he had played minor league hockey and had even filled in for some NHL games.

The hiker was apparently impressed. And then there was the software company. Before he disappeared, Hamas had told family members that a successful software investment explained the extra money he seemed to have. Years later, hiking the Appalachian Trail as Bismarck, he was still using essentially the same story, telling hikers he had invested in a lucrative software company based in Bismarck, North Dakota. So apparently, when you are inventing a new identity, there's really no reason to throw out material that's already been workshopped. Bismarck didn't spend the entire year on the trail. When the weather turned, he had to go somewhere. During the winters of 2012, 2013, and 2014, he spent time at a hostel called The Cabin in East Andover, Maine, where hikers could work off part of the $20 nightly rate. Hamas usually did. He helped build a garage. He helped install a heater. Carl Humbard, who also worked there, remembered Bismarck as being in good humor, very social and actually taking the work seriously, which he said most hikers didn't that last winter. Hamas went to Fort Wayne, Indiana, and rented a room at a place called Park View Studios. $158 a week. And according to the company's own website, no credit check, no deposit, no lease which, if you're a federal fugitive, is a fairly attractive set of terms. Hamas was also working. In February 2015, he emailed Patrick Bradlow from a gmail account under the handle Wandering Catholic. 0712. He'd been working crazy hours in Fort Wayne, he said.

Good for the paycheck, but not the best for the soul. He was counting down Springer fever was setting in Springer Mountain, Georgia, where the Appalachian Trail begins. If all went well, he'd be there two weeks from Sunday. Meanwhile, the real James Hams was hardly an obscure fugitive. America's Most Wanted featured him. We've talked about the American Greed episode. His face was being broadcast on national television while Bismarck was living like the rest of the world. Had forgotten James Hams ever existed. And somehow, for years, nobody connected the two. The FBI was looking for James Hams. The people on the Appalachian Trail saw Bismarck all the time. They just didn't know they were looking at the same man. But eventually, one of them did. Which brings us back to the man watching that American Greed rerun at the beginning of the story. His name, Hayden Krumm, a Mississippi businessman whose real name was chair. He had hiked the entire Appalachian Trail in 2014, and early in that trip, he spent about a day hiking with Bismarck and Hopper. Their first interaction was about as ordinary as it gets. Krumm was cooking oatmeal near a shelter, which is, you know, generally frowned upon because the food smells have a way of attracting, you know, mice and even bears. And Bismarck politely explained that he shouldn't be doing that. Krumm would later describe him as the nicest guy ever. After about a day, their paths separated.

Krumm finished his hike, went home to Mississippi and months later happened to catch a rerun of American Greed. And the episode was about James Hamm's. Krumm had no intention of sitting down and solving a six year old federal fugitive case. He said he simply looked up at the right moment, saw Hamas face on the screen, and knew there was something familiar about it. At first, he couldn't quite place why. Then he pictured the beard and the glasses. Bismarck, the accountant the FBI had been trying to find for years, looked at an awful lot like the friendly hiker who had once gently corrected his trail etiquette. Crum started going through photographs from his hike and found pictures of Bismarck. Then he sent three emails, one to the producers of American Greed, one to the FBI and one to Hamas's daughter, Amanda. In the email to Amanda, Crum included photographs from the trail. In one of them, he zoomed in on Bismarck's eyes and asked whether they looked familiar. They did, for the first time in years, investigators had something much more useful than an old photograph of Hamas in an office. They had recent pictures, a trail name and information about a community where Bismarck was not only known, but predictable. He regularly attended trail days in Damascus, Virginia. Bismarck had been showing up for years, and in May 2015, he showed up again. The timing was almost absurd. The day before his arrest, Bismarck stopped at David Miller's booth at Trail Days and posed for another photo for his trail book.

According to another hiker, Bismarck was already preparing to head back onto the trail. His plan was to leave early Saturday morning, but the FBI got there first. On May 16th, agents went to the Montgomery Homestead in where Bismarck had stayed repeatedly over the years. Suzy Montgomery answered the door. Agents showed her a photograph of a clean cut James Hammes and asked whether she knew the man. She said she did. She knew him as Bismarck. Agents had positioned themselves around the house, including at the back, while Hamas was upstairs in his room. Within minutes, the man Montgomery knew as one of her favorite guests was being led out in handcuffs. Montgomery was allowed to hug him before agents took him away. He whispered to me, I'm sorry. She later recalled. She said she wasn't sure exactly what he was apologizing for. Quote, he knew how highly I thought of him. The timing was close enough that the story could have easily gone another way. Instead, after more than six years as a fugitive, James Hamas was finally in federal custody. And in the end, the FBI didn't find him because of a bank transaction, a phone trace, or some sophisticated surveillance technique. They found him because a guy watching a rerun on TV looked up at the screen at exactly the right time. When the FBI arrested Hamas, they didn't find $8.7 million stuffed into his backpack.

They did find more than $11,000 in cash, along with about $3,600 worth of gift cards. Investigators later recovered another $70,000 in cash from a storage unit in Fort Wayne, and authorities seized other money in property connected to Hamas as well. We already know that a lot of stolen money had gone into the stock market, and much of it had disappeared in the crash. He had also paid millions in estimated taxes. But could there have been more money hidden somewhere? Sure. But we don't know. There's nothing in the public record that tells us that by October 2015, five months after his arrest, Hamas was ready to plead guilty. The deal was straightforward enough. Hamas would plead guilty to one count of wire fraud. Agreed to pay nearly $7.7 million in restitution. File the tax returns he had skipped. And cooperate with investigators by explaining what had happened to the millions he diverted from G and J. In exchange, prosecutors would dismiss the other 74 counts against him at the plea hearing. Judge Susan delete delete delete, delete, not delight. Anyway. Judge Susan D asked Hamas whether he was pleading guilty because he was, in fact, guilty. Yes I am. Hamas said the restitution was divided between G and J and its insurer, roughly 6.68 million, to the company and another $1 million to Cincinnati Insurance. Prosecutors said Hamas retirement funds would be used toward restitution.

The harder question was how much time he should spend in prison. His lawyers argued that the six years he spent on the Appalachian Trail had changed him. He had no prior criminal record, and they portrayed his years as Bismarck as a period of reflection rather than simply six years spent successfully avoiding prosecution. His attorney, Zinaida Lockard, called the trail his road to redemption and even introduced a photograph of Hamas sitting on rocks beside a river, apparently deep in thought. There was also someone in court who knew that version of him very well. Terry Hopper Hanavan, who had hiked with Bismarck for roughly four years, spoke on his behalf. She told the judge that Hamas had helped guide her back toward her faith, and that the two of them had attended church services together along the trail. Prosecutors had a less charitable interpretation of those six years. They argued that Hamas had not disappeared because of some sudden panic after the FBI interview. He had researched how to vanish, gathered documents that could help him assume another identity, abandon his family without warning, and then spent years avoiding responsibility for what he had done. The government's explanation for the fraud itself was simpler sheer greed. The government asked for more than seven years in prison. Hamas attorneys argued for about three. Judge Delort went higher at sentencing in June 2016. She focused not only on the amount Hamas stole and the 11 years he spent stealing it, but also on what happened after he disappeared.

His daughter had already lost her mother years earlier and then, without explanation, lost her father to his second wife, was left behind and eventually divorced him. After the sentencing, his first wife's sister, Jane Ryan, told the Associated Press, quote, he has given me and my entire family a lifetime sentence of heartache. Dalot said Hamas had caused, quote, more collateral damage than she had ever seen in a case before her. Hamas told the court that he had been selfish for much of his life and said he had changed. I am terribly sorry, he said. Judge court sentenced him to 96 months in federal prison, followed by three years supervised release, and ordered him to continue paying restitution. Hamas lawyer called the sentence unreasonable and filed notice of an appeal, but Hamas remained in federal custody for years afterward. Federal prison records indicate that he was released in 2022, roughly 13 years after the day he walked out of Garr headquarters and disappeared. Okay, So did we learn anything? Yeah, sure. A few things. Um, Hamas did not steal $8.7 million because G and J had no accounting procedures. He stole it because he had enough authority to work around those procedures, and there wasn't enough oversight to stop him. And that's really the frame for everything that follows. You know, you got segregation of duties, right? Hamas oversaw accounts payable. He could create a vendor, he could approve a payment, he could control how payments were recorded, and then he could prepare or influence the reports that went to the executives.

And he was also responsible for internal controls. And, you know, we'll say it one more time for everybody in the back. That is a lot of authority concentrated in one person. Yeah. The whole idea is that segregation of duties is supposed to make fraud difficult, if not impossible. By requiring more than one person to complete a transaction from beginning to end. Maybe not impossible. That's overstating it, but close to impossible. Very difficult. Very, very, very, very difficult. The person creating a vendor should not also have the authority to approve payments to that vendor. The person approving those payments should not control how those payments get recorded. And the person responsible for reviewing the controls probably should not be the same person overriding them. Hamas fraud worked because he could touch too many parts of the same process. And there was the vendors. The vendor records were part of the problem two G and J legitimately did business with C w zombie company, but Hamas created a second zombie vendor code inside the accounting system, and he used it to route his fraudulent payments. A simple review of the vendor master file would have raised a very basic question, which is why do we have two versions of the same vendor? Did anyone ever review that file? Did G and J have regular audits that maybe would have flagged it? The reporting doesn't tell us.

Then there is documentation. Hamas repeatedly brought accounts payable employees check requests without supporting documentation and told them to issue the checks anyway. That is a control failure. Before we get anywhere near sophisticated fraud detection. If a payment normally requires an invoice, purchase order or other supporting documentation. That requirement should not disappear because the request came from someone senior enough to make people uncomfortable saying no. If anything, exceptions requested by senior employees deserve more scrutiny, not less. Hamas benefited from the normal workplace instinct to defer to authority. The controller asked for a check, so the check got issued, and we should not understate the practical effect of this in the real world. I mean, we kind of maybe we gloss over it a bit, but if your boss comes to you and asks you for something, usually you do it. Sure, you might ask questions, but you're unlikely to doubt their intentions unless you really, really don't like them, you know? I mean, maybe that's what we talked about that in past episodes. Greg Kite and I where it's like, maybe you just need an accounting department with a bunch of people that don't like each other anyway. Most people are going to give their bosses the benefit of the doubt. If you do ask, hey, you got an invoice for that, they'll say, yeah, but not on me. Let me forward it to you.

What are the odds you're going to follow up? And another thing, once those checks were issued, there was still another missed opportunity to catch Hamas. He had opened the unauthorized Zumbühl account using his own name and home address, and he personally endorsed the checks that G and J believed it was sending to a vendor, a reconciliation that only confirms that a check cleared is not enough if nobody ever looks at who actually received it. Reviewing canceled checks and endorsements would have made the scheme much harder to sustain. None of this required some sophisticated fraud detection system. It required people to look critically at the work being performed by someone the company trusted. And that is probably the simplest lesson of the whole case. Trust is not an internal control. All right. That's it for this episode. And remember, if your disguise is glasses and a different haircut, you are not Clark Kent. If you have questions, comments, or suggestions for stories, drop us a line at OA fraud@cpe.com. This episode of Oh My Fraud was written by Zack Frank and me, Caleb Newquist. Oh My fraud is created, produced and hosted by me, Caleb Newquist. Zack Frank is my co producer, audio engineer and music supervisor. Laura Hobbs designed the logo rate review and subscribe to the show wherever you listen to podcasts. If you listen on the earmark app, you can earn free CPE. Join us next time for more avarice, swindlers and scams from stories that will make you say oh my fraud!