Yale Administrator Allegedly Stole $40M With Fraudulent Purchases

Former Yale administrator Jamie Petrone recently pled guilty to wire fraud and filing false tax returns for stealing $40 million from Yale by buying computers and reselling them for personal gain.

According to MarketWatch, the fraud began in 2013. Petrone would buy computer tablets and other electronics with Yale’s money, then sell them to a company in New York that would sell them to customers. The money from the sale was funneled into an account for a wedding photography and videography company she owned, according to prosecutors.

Petrone was hired at Yale in 1999 and began working for the medical school in 2008, most recently working at director of finance for its emergency medicine department, according to MarketWatch.

Over the eight years that she ran the alleged scheme, Petrone told investigators that 90 percent of the purchases she made were fraudulent, adding up to $40 million. She used the money to buy Mercedes, Cadillacs, a Range Rover, and a Dodge Charger. She also co-owned three properties in Connecticut and another in Georgia.

Yale is the recipient of billions of dollars in taxpayer funds at the federal, state, and local level of government. 

Taxpayer money into Yale included $6 billion saved in special tax treatment on their $42.3 billion endowment since 2015; $3 billion in federal contracts, grants and direct payments in a recent four-year period; special tax treatment of their nearly $3 billion in tax exempt bonds; and tens of millions of dollars in state payments annually.

Previously, a similar scam in 2013 saw a city comptroller from Dixon, IL steal over $53 million thanks to lax oversight and nonexistent accounting controls. 

While responsibility for a crime always rests on the criminal, institutions that receive taxpayer dollars also have an obligation to implement basic accounting controls to prevent fraud.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com