Sunday, November 22, 2009

The truth is an affirmative defense! Updated Again

Last year for a short span of time I had a post up concerning Chris Allen, who was one of the leaders of the Klein ISD Education Foundation. Which is a 501(c)3 non-profit organization which was formed in 2000, but is joined at the hip with the Klein ISD school district. It is operated out of the Klein ISD Admin building by district employees using district resources, so it's "independence" is somewhat suspect (see section B). Chris Allen, whose wife was (correction: still is) a school teacher at Klein Oaks HS (correction: Schultz Elementary), was a VP of Operations at First Service Credit Union. The Klein ISD Education Foundation spent a lot of money supporting the bond election. Chris Allen resigned from First Service and the Foundation in 2008, purportedly due to illness, but the truth was that he had been confronted over a series of ATM withdrawals. You see, since 2006, Mr. Allen had been transferring money from accounts that were dormant to a dummy account he had created, then using an ATM card to withdraw the money. I attempted to confirm the information that had been passed to me at the time but no one would confirm the information, so I posted it with a disclaimer that I had not been able to confirm any of it but that I trusted the source of the information. Mr Allen threatened to sue me if I did not take it down. I complied simply because I could not afford to fight any lawsuit, even though I was sure the information was largely correct.

On Thursday, Chris Allen pleaded guilty to embezzling more than $30,000 from his former employer and could be looking at up to 30 years in federal prison and a fine not to exceed $1,000,000 and five years supervised release for bank fraud.

These are the sort of people you have acting as cheerleaders for the Klein ISD bond.

My source tells me that from a cursory review of the audit trail data, the loss was most likely exceeding $30K. Further, my source tells me that the Credit Union was warned by an employee that this very sort of embezzlement scam was possible a year before Mr. Allen began his embezzlement run. At the time, the person who warned them was told not to worry, because it would be so easy to find that nobody would bother trying. There is however some speculation that this warning was in fact the genesis of Mr. Allen's plan. He was not however, very careful carrying out this plan because he used the same ATM, a First Service ATM that he was responsible for, and he made the withdrawals himself, after parking his personal car in front of the ATM where the camera could see the license plates. Had Mr Allen been intelligent, he would have paid a bum to make the transaction while he stood off to the side out of view of the cameras and he would have used a different bum and a different ATM every time. He also would have used terminals that other employees had logged into but were idle in order to make the internal transfers. Had he done all that, then the CU would have had a far more difficult time identifying the culprit. They would still have been able to determine that it was an inside job, but they would have had a much more difficult time determining who was responsible. But thankfully, criminals are lazy and dumb, which is why they are criminals in the first place. I only hope that First Service has learned it's lesson and tightened it's internal controls to prevent just such a incident in the future.

Update II:
It has come to my attention that after having been fired from First Service and a Secret Service investigation launched, Mr Allen was hired by Pulse EFT as a project manager:

Chris Allen’s Experience

  • Project Manager, Implementations

    PULSE EFT Association

    (Public Company; Financial Services industry)

    November 2008March 2009 (5 months)

    I Oversaw project implementations for financial institutions, processors, ISOs, and other organizations who utilize the Pulse switch for their transaction processing. I also assisted these organizations with the ATM and Debit card programs, including increasing efficiencies, new start ups, program changes, etc.

Now personally, I find it quite disturbing, that a man fired for embezzlement and who is under investigation by the feds can get a job IN THE FINANCIAL SERVICES INDUSTRY working with the same kinds of technology he used to bilk his former employer's customers. I ask you: How is this possible?


Anonymous duhmoose said...

Thank you for posting this. I am glad to see he will be brought to justice for his actions.

November 23, 2009 6:55 AM  
Anonymous EricPWJohnson said...

in 2005 when I sic'd the justice department on Klein ISD for advertizing the bond issue during elementary open houses (always the most attended) and having "special" voting sessions to stack the deck for that issue that passed by just s few hundred votes

Larry Allen accused my of all sorts of things that night at the board meeting - he was livid almost screaming that how dare I interfere with the district and so on and so forth.

November 23, 2009 6:10 PM  
Blogger Jean said...

I don't live in the Klein District, but WOW! Good on you for exposing this bum. This guy's arrogance finally caught up with him, it seems.

November 26, 2009 8:55 AM  
Anonymous Anonymous said...

I cannot find any information on what he was sentenced to? I used to work with him and I was just wondering. Does anyone know?

May 12, 2010 9:55 AM  
Blogger Rorschach said...

Anon, I have put in an inquiry with the PIO for the DOJ US Attorney that was handling the case to inquire. He was tro have been sentenced on Feb 12, 2010, but it is possible his sentencing may have been delayed. If I learn more I will post an update.

May 12, 2010 12:25 PM  
Anonymous Anonymous said...

I was able to locate his record in the federal prison system I belive but would still like more information.

Register #43528-279 Age/Race/Sex : 41-White-M Release Date: 07-29-2012 :ocation: BASTROP FCI

May 12, 2010 5:34 PM  
Anonymous Anonymous said...

I worked for Chris and he was an unreasonable man & very hard on his employees. I knew that he was very driven and was willing to do anything to move up the corporate ladder. But I'm curious to know what could have made him start embezzeling money? Could it have been a drug problem?

January 14, 2012 8:30 PM  

Post a Comment

Subscribe to Post Comments [Atom]

Links to this post:

Create a Link

<< Home