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Trust But Verify

President Reagan said trust but verify. In the last week, two prominent business and school leaders pled guilty to bilking local towns. In the more famous case, the former superintendant of the Toms River school system pled guilty to a scheme in which he received over a million dollars in bribes for steering insusuance contracts to crooked vendors. Since his salary was about $225,000 per year with a significant pension, it is somewhat difficult to understand why he would do this and now face years in federal prison where there is no parole.

In Perth Amboy, an insurance broker pled guilty to bilking the school system of over 2 million dollars through a non-existent wellnes program.

These are not isolated cases as the former business administrator in Westfield pled guilty in the last year to taking bribes. He was also highly compensated.

Without the standard analysis that greed made them all commit these financial white-collar crimes, a better question is how they were able to get away with it for so long. The Perth Amboy scheme was in operation for six years and the Toms River Superintendant’s scam also was in place for years.

Obviously, towns should put in place strong audit and compliance procdures so that these crimes cannot go undetected for years. The cost of not verifying can be very high.

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