In this episode, one ordinary Thursday cracks open a decade of misplaced trust. What starts as a simple payroll question quickly spirals into a trail of inflated salaries, personal charges, and checks written to someone who was practically family. The money is gone, but the real cost runs much deeper.
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00:00:00 Dan Ramey
Hello, I'm Dan Ramey, contributing editor to Internal Auditor Magazine's Fraud Department and president and founder of Houston Financial Forensics.
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I am pleased to introduce this episode of Fraud on the All Things Internal Audit podcast, which provides fictionalized accounts of fraud based on actual events.
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Checks payable to deception.
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Part 1, the person everyone trusted.
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For nearly seven years, Sandra Daly seemed exactly the kind of employee a senior living community would want.
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She was organized, approachable, efficient.
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As the business manager at Maple Grove Senior Community, a memory care and assisted living facility, Daly was the financial face of the organization.
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She answered billing questions, helped residents fill out paperwork, and knew almost every resident by name.
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Daly also had near unchecked financial authority.
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collected rent, issued billing statements, and served as the main contact whenever residents or families had questions about charges.
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In a place where many residents depended on others to help manage daily life, that gave her enormous influence.
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And for years, no one realized she was using it to commit fraud.
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Part 2, the charges that did not add up.
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The first cracks appeared in early 2023.
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Two family volunteers, Margaret Holloway and Cynthia Marsh, began comparing notes after noticing unusual charges in their mother's bank statements.
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Both women found checks made out to a company they did not recognize, Crestfield Property Services, LLC, not Maple Grove.
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Even more alarming, many of the charges were the same amounts as their mother's rent.
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Holloway and Marsh brought their findings
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to the facility's executives.
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Maple Grove's initial investigation found similar charges involving 28 residents, totaling about $62,000.
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The facility hired outside forensic experts to review five years of financial records.
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While that was underway, Daley was placed on administrative leave.
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A few days later, she resigned.
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But the questions were only getting bigger.
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Who was Crestfield Property Services?
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Why were residents paying rent to that company?
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And why had no one at Maple Grove caught it sooner?
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The company behind the checks.
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When police financial crimes investigators became involved, the trail led straight to Daly.
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They alleged that she had been redirecting payments by instructing residents to make their monthly rent checks and money orders payable not to Maple Grove, but to Crestfield Property Services, LLC.
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Because Daley was the business manager, residents and families did not question the change.
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Many were told verbally during routine conversations in the hallway or at the welcome desk.
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It sounded official because it came from the person in charge of billing, but Crestfeld was registered to Daley's home address.
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When she received the checks, she endorsed them.
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Mobile deposited them into her own bank account and reconciled Maple Grove's records to conceal the shortfall.
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Investigators and prosecutors called it a brazen crime.
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What made it especially troubling was who Daly targeted.
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Many residents had dementia or other cognitive impairments, including Holloway's mother.
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Some residents could not remember whether they had already paid rent, and Daly guided them into writing a second check.
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Others, confused by changes in routine or unfamiliar paperwork, simply did what the person in charge of billing told them to do.
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Henry Marquez, lead prosecutor with the District Attorney's Elder Abuse Unit, said, Daley took advantage of some of the most vulnerable victims in our community.
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The True Scope.
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What began as a handful of suspicious checks became something much larger.
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The Financial Crimes Unit determined that Daley had stolen payments from 104 residents or their designated family representatives.
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The amount diverted exceeded $1.6 million.
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Forensic analysts later estimated the true figure could be as high as $2.5 million when duplicate and unreported payments were fully accounted for.
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In December 2023, police arrested Daley and charged her with felony theft.
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After her plea hearing, prosecutors presented testimony from family members, facility staff, and Maple Grove's corporate representatives.
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They described the emotional and financial devastation the scheme had caused.
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Daly pleaded guilty.
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She was sentenced to 15 years in prison and ordered to pay more than $1.6 million in restitution.
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Maple Grove repaid impacted residents using insurance proceeds and corporate funds.
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Part 5.
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The question that remained.
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After Daley's conviction, Maple Grove overhauled its financial controls.
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The facility moved to a dual authorization model for all resident billing, requiring a second employee to verify payment instructions before they were sent to residence.
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It redesigned billing statements to clearly identify the payee entity and direct families to a corporate verification number.
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Maple Grove also put formal escalation protocols in place so that any billing discrepancy raised by a resident or family member would automatically trigger a review above the local business office level.
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The changes addressed long-standing vulnerabilities.
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But one question remained, how had one employee been allowed to control so much?
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In the end, it took two family members comparing bank statements to expose what the organization had missed.
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As Holloway asked, why did it take me to find it rather than the people who work here?
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This has been the All Things Internal Audit Fraud Podcast, fictionalized accounts based on actual events, brought to you by the Institute of Internal Auditors.
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IIA members can access the full story in this month's issue of Internal Auditor Magazine, including bonus materials on lessons learned.
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To read more, visit internalauditor.theiia.org.
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For more fraud-related resources, including guidance and thought leadership from the IIA and the ACFE, visit theiia.org/acfefraud.
