‘Credible Evidence’ Am. Samoa Retirement Fund Chief Stole Funds

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Pacific Islands Development Program, East-West Center With Support From Center for Pacific Islands Studies, University of Hawai‘i

‘Credible Evidence’ Am. Samoa Retirement Fund Chief Stole Funds Audit report alleges Luatua misappropriated $112,000

By Joyetter Feagaimaalii-Luamanu

PAGO PAGO, American Samoa (The Samoa News, Jan. 25, 2016) – The forensic audit of the Government Employees Retirement Fund (ASGERF) by an off island company has "credible evidence" that suggests over the course of three fiscal years, Executive Director Luatua Filisouaiga Ta’afua in partnership with the accounting supervisor appears to have misappropriated more than $112,000 from the fund.

In addition, other inappropriate practices relating to travel for board members, employees and others have resulted in a reduction in the fund’s retirement assets, says the report prepared by accounting firm, Squire & Company that was leaked to Samoa News.

It’s alleged that Luatua’s received salary overpayments of over $60,000 more than his approved salary and he also received an "unapproved loan" of $35,000 from the ASGERF. This report has been submitted to the Attorney General’s office for their review.

Last year allegations surfaced regarding Taafua about "questionable transactions," over the use of the Chairman’s signature rubber stamp without the proper authorization for checks issued out of the Administrative Account, as well as other suspect transactions made by Luatua in his role as the fund’s executive director.

At the time, the Board was said to have also asked Police Commissioner Save Liuato Tuitele to conduct an investigation into the matter, and they sought an off-island company to conduct a forensic audit of the fund and look at suspected misappropriations or fraud involving Luatua, who had since been placed on leave." Luatua has been Executive Director of ASGERF for approximately nine years.

Last year Paragon Wealth Management a Utah-based registered investment advisor company, was contacted by the ASGERF to conduct a full in-depth Investment Management Review. Paragon then contracted Squire & Company to provide a forensic audit for the ASGERF and "this request was the result of the recent discovery of possible misconduct by its Executive Director."

The forensic audit report indicates that based upon the premise that possible misconduct had allegedly occurred, a fraud examination was conducted, which included reviews of relevant records and interviews of personnel.

The report says that the "fraud examination commenced when Caroline Wendt (ASGERF Deputy Director) notified Fanene Morris Scanlan (former ASGERF board Chairman) of questionable vendor payment checks, which were signed by the Executive Director Luatua.

Dwayne Asay, CPA (Fraud Examiner) was to analyze certain questionable transactions initiated or approved by the ASGERF Executive Director and as per request from current Chairman Tofala Iafeta. The scope was limited to the administrative bank account for the fiscal years ended September 30, 2013 and 2014 and for the period October 1, 2014 through June 2015 with an emphasis on payments made to the Executive Director, related parties and potential fictitious vendors.

EXECUTIVE DIRECTOR’S SALARY

Among other issues mentioned in the report, the Executive Director’s salary is included. It’s alleged that according to the QuickBooks detail, gross salaries paid to the executive director were $85,343.75; $84,746.46 and $114,100.29 for the fiscal years ended September 30, 2013, 2014, and 2015.

The report says approved salaries per documentation and discussions for Tofala were $65,000 for Fiscal Year ended September 30, 2013 and up through June 9, 2-14 and $75,000 from June 9, 2014 until October 1, 2014 at which point it went to $85,000 for the fiscal year ended September 30, 2015. "Differences in approved salaries and actual amounts paid results in an over payment of salaries for the fiscal years ended September 30, 2015, 2014, 2013 of $69,034.50."

The report say Fraud Examiner Asay inquired with the ASGERF Deputy Director about the additional salary payments to the Executive Director and she responded that consistent with the Commissioner’s report she stated that "she (Caroline Wendt) did ask the Executive Director about the extra pay checks and he told her that it was for his paid leave."

UNAPPROVED LOAN

It’s alleged that on November 5, 2012 the Executive Director made a $35,000 deposit in the ASGERF administrative account and had Deputy Director Wendt write out a check to the Executive Director for the same amount. On November 8, 2012 the bank returned the initial check.

"Accordingly, the fund was short $35,000." It’s alleged that on September 20, 2013, a payment was received for $5,280.07, the next year two payments were made — on November 3, 2014 a payment was made of $25,000 while on the 14, another payment was made in the amount of $4,719.93. The report says that according to Wendt, the Executive Director said he had applied for a loan with the Navy Federal Credit Union and had received a check for $35,000.

However, his bank would put a hold on the funds for a period of time. Because of the delay in access to the funds, the Executive Director deposited the check in the ASGERF’s administrative account and had Caroline process a check back to him for the same amount, so he could have immediate access to the funds. However, the deposit was returned three days later, says the report.

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