The Simple Invoice You Submit

Could Send You to Prison


Pastor Jack came up with what he thought was a brilliant idea. As much sought after speaker, he was constantly flying from city to city, accumulating an enormous amount of frequent flyer miles. The Churches at which he spoke regularly guaranteed to pay first class, round trip airfare for the speaking engagement. So he thought it would be okay to purchase coach fare and then upgrade free or cheaply with all of the miles stored in his frequent flyer program.


This seemed to work out great. The hosting Church had agreed to pay the first class fare and by Pastor Jack purchasing coach and upgrading free, he could realize a huge windfall in the difference between the price he prepaid for the ticket and the Church’s reimbursement of a first class fare. Until the error was caught while auditing the Church’s financial records!


Pastor Jack actions were fraudulent.


What Is Fraud?


Merriam-Webster defines fraud as:


  • a : deceit, trickery; specifically :  intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right; b :  an act of deceiving or misrepresenting :  trick


  • a : a person who is not what he or she pretends to be :  impostor; also :  one who defrauds :  cheat; b :  one that is not what it seems or is represented to be


The Pastor’s actions were fraudulent because they were deceptive in that he was paying a coach fare, but billing the host Church for a full unrestricted first class ticket – fraudulent because he intentionally perverted the truth in order to receive higher reimbursement.


Because of the enormous amount of money that was fraudulently obtained, this Pastor’s actions were considered to be a Class C felony in most states. A Class C felony is punishable by 3-15 years in prison, plus fines.


Unfortunately, the investigation did not stop at state level.


Wire and Mail Fraud


Once Pastor Jack mailed the invoice via the US Postal Service, UPS, or FedEx, he had become engaged in Mail Fraud.


Now it moves from the hands of a State Court into Federal jurisdiction.

Mail Fraud is described by 940. 18 U.S.C. Section 1341 as: “(1) having devised or intending to devise a scheme to defraud (or to perform specified fraudulent acts), and (2) use of the mail for the purpose of executing, or attempting to execute, the scheme (or specified fraudulent acts).”


Penalty for Mail Fraud is 20-30 years plus fines.


In addition to Mail Fraud he also committed Wire Fraud because some of the invoices were e-mailed to the Host Church.


Wire Fraud is described by 940. 18 U.S. C. Section 1343 as: “having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice.”


Wire fraud is punishable by not more than 20 years in Federal prison, plus fines.


But, the Host Church Agreed


Even if the Pastor of the Host Church agreed to this scheme, it is still fraud, including the Federal charges of Wire and Mail Fraud. Now, both have committed a crime – Pastor Jack for the act, and the Host Pastor as an accessory to and after the fact.


If the agreement between speaker and Host Church is first class airfare and the ticket is pre-paid by the speaker, he or she must only bill the Church for the actual payment that was surrendered for the ticket.


Host Pastors and Bookkeepers should be diligent to ensure what they are billed for is what has been actually spent. This is God’s money that we are dealing with and in addition to state and federal accountability there is a higher accountability that is demanded. We will give an account to God. Jesus instructed us that the One we are to fear is the One who is able to destroy both body and soul in hell (Matt. 10:28).


There Is More


This does not only apply to just an airline ticket. It can be anything that involves billing someone more than was actually paid. That is why you need an expert to look at your books NOW!


How We Can Help


Chitwood and Chitwood is the ultimate Church Accounting Firm in the world. With 77 years of experience, we have seen every trick there is in attempts to defraud Churches. You need our expertise because the huge majority of fraud cases go undetected by Churches. It takes our skill, knowledge, and experience to identify what others are trying to hide.


All Pastors and Churches, that are not our clients, should contact us immediately for an on-site audit of your Church financial records. Even if there is no fraud we can identify wasteful spending and ways to improve your ministry.


Don’t wait. Call us today at 800-344-0076. At Chitwood and Chitwood it is “A Ministry – Not A Job!”