Mystery of the Missing Money

Accusations fly in $26,000 Keno shortfall at VFW post

March 10, 2013

Ten months after Keno was installed in the bar at VFW Cherryland Post 2780 in April, 2010, an audit discovered that $26,000 in gambling revenue was missing.

The person who conducted that audit, Richard Thibeau, was then just a rank-and-file member, but he had an accounting degree and almost two decades of criminal investigation experience in the Army and he was recruited to take a look.

Since then, Thibeau has been elected post commander, and he said he believes a former quarter master at the post is responsible for the missing $26,000 from Keno.

A MURKY CASE

The case, though, is complicated, largely because of poor bookkeeping practices used until the missing funds were discovered and the number of people who had access to an office where money was stashed in a safe that was often kept unlocked.

Thibeau brought the findings of his audit to Grand Traverse County Sheriff’s detectives in 2011, who launched their own investigation. They sent a police report that named as a suspect the former quarter master, Douglas Jordan, to the prosecutor’s office.

Jordan denies embezzling any money and said he believes someone else at the post was responsible. Jordan also passed a lie detector test administered by the Michigan State Police.

Detectives used search warrants to get personal bank account records for Jordan and they found nothing suspicious, according to a police report. They also served a search warrant to get player’s club card information from the Grand Traverse Band casinos and they found that Jordan’s player’s club account had been inactive since 2009.

DECLINED TO PROSECUTE

Nonetheless, police brought the case to prosecutors for consideration two times. In October, 2011, Alan Schneider, then the county prosecutor, declined to prosecute.

This January, Robert Cooney, newly elected prosecutor, said the sheriff’s department brought the case to his office to have another look.

Cooney said he would typically let any decisions made by Schneider’s administration stand unless new evidence had come to light, which had not happened in this case.

Nonetheless, due to the significance of the allegations, he said he agreed to have an assistant prosecutor review the case.

"It is a significant crime. It’s someone stealing from a charitable organization," Cooney said.

However, while Cooney wouldn’t say he believes no crime was committed, he does believe that there is not enough evidence to bring a case to court.

FRUSTRATED BY THE CASE

Thibeau is frustrated that prosecutors would not take the case, especially this January, when he personally talked to a young prosecutor who was reviewing the case.

"He said there’s insufficient evidence to guarantee a conviction," Thibeau said. "And my response was, "˜You’re not there to guarantee a conviction.’" The controversy at the VFW Post began after Jordan, who had been quarter master since 2005, reported confusing and seemingly inaccurate financial reports to members at meetings in June and July of 2010. The amount of money in the Keno balance he reported fluctuated wildly, Thibeau said.

Due to his investigative and financial background, Thibeau volunteered to conduct an audit of the Keno machine and other members voted to let him proceed.

RECORDS WERE DESTROYED

One of the first things Thibeau learned as he dug into records was that Jordan inexplicably destroyed earnings reports from the Keno machine after he took deposits to the bank.

Jordan told police he destroyed the records because he didn’t think he would need them again.

Thibeau figured out how to get the Keno machine to produce weekly sales reports going back to when the machine was installed. Thibeau also got the bank records to find out what Jordan had deposited.

When Thibeau tallied what was deposited and compared that to the numbers from the Keno machine, he found that beginning on April 29, 2010 through Nov. 24, 2010, the amount missing from Keno deposits was $26,268.

The first week, $406 was missing from the deposit. The next week, $733. Some weeks, as little as $22 or $13 was missing. In one deposit, there was an overage of $162. In another, $6,974 was missing.

SLOPPY BOOKKEEPING

Jordan denies taking the money but he agreed that his bookkeeping practices were sloppy. And he said he believes money was embezzled, just not by him.

Jordan said one problem was that he didn’t regularly make deposits at the bank.

"We had never really worked with (Keno machines) before, so they weren’t deposited each week. Sometimes it was deposited every month," Jordan said.

Jordan told police that a lot of people, including bar staff, had access to an office where receipts were often kept in an unlocked safe.

One bartender told the detective: "Overall, there was always a lot of money around the bar area and anybody could have taken it."

Jordan said shortly before he was relieved of quarter master duties amid the investigation, he found out money was missing. He started making weekly deposits and he tightened the books.

"I knew I didn’t take it, so I instituted a weekly accounting," Jordan said. "What I wasn’t doing, like I say, I did not know better because I never worked with it before."

Jordan said Thibeau’s allegations are groundless.

"Since they couldn’t get anything on me legally, now they’re just going after my reputation, is what it comes down to," Jordan said.

"˜THERE WAS MONEY MISSING’

Jordan, though, agrees that Keno money went missing while he was in charge of it, just less than what Thibeau alleges.

"I will say there was money missing -- not the amount that they were saying, but there was money missing," Jordan said.

He said Thibeau’s audit found more money missing than what was actually gone because at the time the post only used one bank account. By state rules there should have been a separate account for Keno. He believes that Thibeau’s analysis missed some Keno money that was mixed together with general fund money.

Jordan also said he believes he knows who took the money.

He said he wouldn’t say who in an interview, but he named a former bar employee to police, someone who he said witnesses saw playing Keno without paying. He also named another person, but the alleged embezzlement continued even after that person left the VFW staff.

SHOULD HAVE KNOWN

Nonetheless, Thibeau, who was elected post commander in April, 2012, is not convinced of Jordan’s innocence.

He said someone playing Keno without paying would not explain the missing money.

He said he does not believe bar staff could have stolen the money, because if they had, Jordan should have noticed the discrepancy when he made the deposits.

Thibeau believes the case is simple and Jordan has managed to make it confusing.

"The machine tells you how much there should have been put into the bank; the bank account tells you how much was put into the bank," Thibeau said. "The difference is what was stolen."

"˜SADDLED WITH IT?’

This is a case where even the origin of the Keno machine is in dispute.

Jordan told the detective investigating the case that the Keno machine was brought in after a vote by the membership and that he was "saddled with it," according to the police report.

That was contradicted by what Paul Smith, the then-acting quarter master, later told a detective.

"Doug Jordan and (assistant quarter master) John LeBrun were the two that wanted the Keno machine in the VFW," the detective wrote of his conversation with Smith. "He stated that the two of them did this on their own."

In fact, Smith told the officer that the membership had not even voted to install the machine.

Lebrun denied that -- he said the membership voted to install the Keno machine.