Karen Pletz, 64, was president and CEO of the Kansas City University of Medicine and Biosciences from 1995 until 2009. She had taken on many civic leadership roles and was honored as one of the area’s top businesswomen. She had a great reputation in her community up until late 2009 when questions began surfacing about how the school finances were being handled, which brought about her immediate termination. In March of 2010 the university filed a lawsuit and the federal indictment describes a scheme in which Pletz embezzled from KCUMB by wrongfully receiving more than $1.5 million in payments from the osteopathic medicine and life sciences school, according to fbi.gov.
Unauthorized Pay
She wrongfully took $1,409,500 from the University in unauthorized pay by causing minutes of nine executive committee meetings to be created when meetings did not even take place. The payments for the meetings were referred to as leadership stipends and leadership compensation. They were typically in the form of a $65,000 lump sum. When her secretary informed her that she had no signatures confirming the meeting, Pletz stated, “Well, you’re a smart girl, make sure you just fix it.” Anyone put in this situation would feel their job safety was being threatened. So the secretary did what many people would do and photocopied signatures to put on the meeting reports.
Travel and Entertainment She also submitted fraudulent vouchers to receive reimbursements for travel and entertainment expenses that she claimed were for business but they were actually personal. She traveled to places such as Florida, Wyoming, and South Carolina to visit friends and family and received reimbursements for all of them. She also received an $11,846 reimbursement for items purchased at a Vera Wang boutique at Halekulani Hotel in Honolulu, Hawaii. She also did not report the $50,291 she received from these trips as income on her federal tax returns.
Charitable Reimbursements
Pletz claimed $565,628 worth of fraudulent charitable deductions to such organizations as the United Way, Lyric Opera, the Deron Cherry Foundation, Boys and Girls Clubs, and Truman Medical Center when it was actually the university making the donations. Those fraudulent donations that affected the University were to Benedictine college. Pletz would write personal checks out to Benedictine College as a donation and then ask the University for reimbursement. For proof, she made copied of her checks and gave them to the school. The school would then reimburse her. They later found out that Benedictine never received any checks from Pletz. Pletz later allowed Benedictine to charge the $20000 on her KCUMB credit card. She then would claim the tax deduction for the donation, but would not include the $20000 income from the University. She repeated this fraudulent act two more times for a total of $65000.
Money Laundering
She was charged with four counts of money laundering due to monetary transactions using illegally derived property.
Results
Her indictment contained a forfeiture allegation where she had to forfeit anything she received using the money that she received fraudulently. This included items such as a Lexus convertible and her condo. In the end she was charged in a 24-count indictment. According to fbi.gov,”The federal indictment charges Pletz with 16 counts of stealing from the university, one count of attempting to interfere with the administration of internal revenue, three counts of making false statements on tax returns, and four counts of money laundering.” Unfortunately, there is not a happy ending to this story. On November 22, 2011 she was found dead in a Fort Lauderdale home that belonged to a family member. The cause of death was from acute intoxication from a combination of alcohol, alprazolam(Xanax), oxycodone and meperidine (Demerol), and was ruled a suicide.
Internal Controls There was obliviously a lack of internal controls during the years that this occurred. Of course when you have someone with a great reputation and wonderful personality as CEO, you wouldn’t think you would have to worry too much about it. As you can see after reading this case, even people you would never dream of doing such terrible things can easily fall into the temptation of money. The governing board was very much in the dark during this entire situation. They would approve budget amounts, but did not really monitor or look into the way the money was spent. Obviously something was going on with her getting all of the money back for travel expenses. She should have been showing proper receipts and showing that her trips were for business, which they would have found out they weren’t if they would have looked into it more. I also feel like they didn’t have proper whistleblower protection in place. I think if they would have had them in place, Pletz’s secretary could have called and informed them of what was going on immediately.

Sources http://www.fbi.gov/kansascity/press-releases/2011/kc033111.htm http://www.upi.com/Top_News/US/2011/11/23/Indicted-former-KCU-official-found-dead/UPI-57971322068285/

http://www.bizjournals.com/kansascity/print-edition/2011/04/08/fbi-court-filing-gives-insight-into.html?page=all