Yale University IT admin spent $40M college money on luxury cars, houses | Hacker News Reader

Yale University IT admin spent $40M college money on luxury cars, houses

marketwatch.com

98 pointssamspenc40 comments

There are colleges all over the world that will treat a donation of a dozen used computers with reverence. Meanwhile an admin at Yale was able to make $40M worth of fraudulent purchases for IT equipment at a single department and no one noticed for 8 years.

If you are looking for a single example to encapsulate America's broken higher education system, this is it.

Yale is an elite, private institution, with a 40+ billion endowment. 40m is pocket change, relatively speaking. Most ivy league schools, have hardly anything to do with the problem of America's broken higher education in general. These elite schools have decades, and in some cases centuries, old legacy wealth. Being elite means they are highly selective, and if you are from someone with low or middle income that does indeed get selected to go there, chances are you are getting financial assistance from the endowment fund.

If this happened at a public institution, especially one part of a state system, it would be a much bigger scandal. While this is indeed scandalous, this is like crying over some rich people's pocket change, and not something that can be used as ammo against American universities on the aggregate. Again I am agreeing with your premise, American higher education on the whole is rife with waste, schemes, and scandals, but at least Yale and Harvard aren't vacuuming Stafford loans like Cal, Suny, or UOP.

I know no intuition that wouldn't notice a lack of over 8000 tablets in inventory.

Where I work everything not written off will be checked bi-yearly. By an independent department.

Something is fishy.

Sounds like the story was that the tablets were given to external participants in studies without the expectation of being returned.

>Most ivy league schools, have hardly anything to do with the problem of America's broken higher education in general.

If the elites couldn't send their children to Ivy League schools then I'm pretty sure America's broken higher education system would be fixed in no time.

The two problems are closely connected. If one were to audit the elite where I went, one would find many scandals like this, albeit more cleverly disguised and perhaps legal. Good questions to ask:

- How many state school faculty come from elites?

- Why do we structure education as an elitist competition for a brand stamp? Why should someone have an advantage in life by having "Yale" stamped on their CV?

Many countries have roughly equal funding to all school, and similar admissions standards. Universities are nice in that as a freshman, you can take a freshman course or a grad-level course. What's the upside of sorting kids by background and sending them to different universities?

All schools also strive to move up US News and be like Harvard/Yale. If Yale jumps off a bridge, the state schools WILL almost always follow. The impact of what happens at the elites is disproportional.

How does it encapsulate that? Can you explain? I see a story about a criminal.

Malcom Gladwell did a whole podcast series on this, season 2 of Revisionist History. But the idea is that some colleges like Yale, Harvard, Stanford have mega endowments that mean they can almost never lose money. Some rich people make huge multi million dollar donations just to make big headlines, but some small state college with a tiny endowment could have used that money across a much broader range of students.

*public colleges in the U.S. with well known names. They fight for a few hundred dollars so students can have basic stem programs while the admins profiteer and waste funds left and right.

Doesn't seem like she was an "IT admin." According to the article she was, "director of finance for its emergency medicine department"

When someone can get away with this for 8 years and no one notices you know college tuition is too high...

This is actually kind of tricky to catch. You have to have authorization limits not just per transaction, but also total per period of time.

Still, I admire this person's commitment to grift. Eight years she devoted to this fraudulent side hustle!

Or audits.

Or, a budget.

You'd think someone higher up would've noticed an anomalous increase in total transactions. Maybe she was smart enough to ramp up over time. Maybe a few million a year is really just a drop in the bucket.

Common security practices would help. Stuff such as...

1.) Separation of duties. A single person shouldn't be ordering and paying for $40 million worth of equipment. And a person shouldn't be able to order $2.1 million worth of computers within two-and-a-half months without someone noticing.

2.) Trend analysis for invoices. If there are multiple $10k purchases within a short period of time, someone should start asking why purchases are broken up into separate chunks. This is regularly done within financial institutions, and there's probably a former banking compliance officer or two at Yale who can advise the institution on creating build this very obvious system.

3.) Mandatory vacations. It's much harder to perpetrate fraud when someone else does your job for a week or two each year.

4.) Asset inventories. How does millions of dollars of equipment go missing without anyone noticing?

A red flag or two should also pop up when a school administrator starts driving multiple luxury cars to work.

Mandatory vacations especially, since most of these things are done by people in controller and similar corp finance rules. It's rather strange that an IT person could keep it going for so long - you'd think someone in the aforementioned roles would catch it way sooner?

In the university system you don’t and can’t report fraud. I’ve heard of multiple stories of grad students getting retaliated against successfully for doing that.

I honestly would say this varies between university system.

In some places there is a definite push to silence whistleblowers. In the US, it's easier to get away with this if the institution is private. I went to a state school in the US. If there's fraud going on, it's a mismanagement of state funds. If I came across large-scale fraud, I wouldn't go through institutional channels. I'd go straight the state attorney general's office. That takes the investigation out of the hands of people who can directly punish you.

Even so the professor committing the fraud is likely the person in charge of your phd or masters thesis so if you burn them you will have to start over

Your #3 point is great, I hadn't thought about it this way!

Yeah, I work in University IT, and everything we purchase goes through separation of duties. If I prepare an order, someone else has to do the order approval, and someone else has to mark the item received before it will be paid.

I don't know that she was especially committed to carrying it off well. She didn't file tax returns at all for 2017-2020, while working and presumably getting a W2? Isn't that just asking for someone to look at your situation?

With all the administration bloat that has been going on you'd think they could catch this much earlier. Asleep at the wheel.

I would be surprised if she was doing it alone, it's likely others are involved and were paid to turn a blind eye.

Unreal. How is she out on bond? There are so many loose ends here too. I wouldn’t be surprised if others were involved.

Non violent crime and they don't think she is a flight risk?

You are probably right. But I wonder how she could not be considered a flight risk. Her recent history includes a decade of a massive, deceptive (using a shell company, etc.), and brazen theft. And she's up for a possible 30 year sentence. Who is a flight risk if not someone like that?

I don't think you're allowed to use unproved allegations and the fear of a possible conviction as part of the calculation of a flight risk. After all, they are innocent until proven guilty.

Mostly, the court should look at family, employment, track record of appearing in court, financial status. The only thing that would mark her as a flight risk is finances as she is wealthy enough to run away.

However, if she does run she'll loose free access to the majority of her fortune which makes her less likely to run.

> I don't think you're allowed to use unproved allegations and the fear of a possible conviction as part of the calculation of a flight risk.

How would anyone be a flight risk if you exclude these factors.

Fear of a possible conviction is pretty much the only reason why anyone would give up their current life to flee.

Isn't the allegation considered proven in that she pled guilty?

That's true... I hadn't read the article before I commented. :)

Not to mention no criminal history and strong ties to the community. Plus family that would be hurt if she broke bond.

Talk about a lack of financial controls.

One benefit of being a public institution is your books are sort of open, someone would notice this. You can’t just add $5 million a year to your budget.

> Until then, she is free on a $1 million bond.

The fact that you can buy your freedom in the US is laughable

especially when it's possible (or probable) that it's paid by your stolen money.

The IRS wants a cut of the fraudulent income? What?? Feels pretty disingenuous to me..

Why is the title on HN "spent $40M", but the title of the article is "stole $40M"?

The spent the $40M mostly to buy tablets for the medicine dept, but then sold them and pocketed the money.

The headline makes it sound like this was corrupt sanctioned spending by a dept rather than theft from the dept. Don’t send those resumes before you read the article!

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