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Embezzlement

Hidden in Plain Sight: How Yale Missed a $40 Million Procurement Fraud

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For years, Yale University School of Medicine administrator Jamie Petrone lived a lifestyle far beyond what her job title suggested. She drove a Mercedes-Benz G550, a Range Rover Autobiography edition, and other luxury cars. She owned three houses in Connecticut and another in Georgia. Her social media accounts showed off her wealth for everyone to see. Yet it took nearly a decade before anyone at the prestigious Ivy League school asked how she could afford it.

The shocking truth: Jamie was orchestrating a massive fraud from inside Yale. She secretly ordered thousands of tablet computers—mostly Microsoft Surface Pros—and shipped them to an out-of-state business. That business paid her personally through her own company’s bank account. By the time an anonymous tip finally exposed the scheme in 2021, Yale had lost more than $40 million.

As told in an episode of Oh My Fraud, this case represents one of the most significant procurement fraud schemes ever perpetrated against an academic institution.

A Trusted Employee Exploits the System

Jamie joined the Yale School of Medicine’s Department of Emergency Medicine in 2008 and rose to become Director of Finance and Administration by 2019. With years of experience, she knew Yale’s procurement procedures inside and out, giving her the perfect roadmap to commit fraud.

In 2020, Jamie’s supervisors questioned why her department’s budget showed a big spike in computer purchases. She claimed the department was updating equipment and collaborating on a new project with Yale New Haven Health. No one pressed her further.

The $10,000 Threshold Trick

One simple rule made Jamie’s fraud possible: She could approve any purchase under $10,000 without extra oversight. Rather than submitting big orders for 50 or 100 tablets at once, she broke them into smaller requests—each one kept below the $10,000 limit. With no second approval required, her orders sailed through accounting.

According to the FBI, Jamie placed thousands of these small orders. In one case, she directed a coworker to purchase 100 Surface Pro tablets in 13 separate purchase orders. Twelve orders were for 8 tablets each, totaling about $9,100 each, and one order was for 4 tablets at $4,551. By splitting them up, she avoided the automated controls meant to detect high-value purchases.

Jamie then claimed the tablets were for department research or other official projects. Instead, she shipped them straight to a third-party reseller in New York, which sent payments to her company, Maziv Entertainment LLC. This arrangement racked up millions of dollars of profit, all at Yale’s expense.

Suspicious Spending Hiding in Plain Sight

While Jamie carefully hid the paper trail, she did not hide the results. She drove multiple luxury vehicles, including a Range Rover Autobiography and a Mercedes G550. She amassed four homes and flaunted her lifestyle on Instagram. Even without a full investigation, her lavish, conspicuous spending should have raised questions.

According to the Association of Certified Fraud Examiners (ACFE), “living beyond one’s means” is the top behavioral red flag among fraudsters. Despite this common red flag, nobody at Yale confronted the glaring mismatch between her university administrator salary and her multimillion-dollar expenditures—until an anonymous whistleblower reported seeing her load stacks of computers into her Range Rover in 2021.

The Anonymous Tip and FBI Investigation

In August 2021, Yale received a tip about large quantities of computer equipment leaving its campus. After confirming that Jamie was ordering suspiciously high volumes of tablets, the university notified the FBI. Investigators got a search warrant and began tracking packages Jamie sent from a FedEx location in Orange, Connecticut, to a reseller in New York.

Within days, they intercepted several boxes containing 94 Surface Pro tablets. Records showed she had recently placed a $144,000 order for more hardware—far beyond any legitimate department need. Realizing the investigation was closing in, Jamie turned herself in on September 3, 2021.

Guilty Plea and Aftermath

Jamie eventually admitted to the scheme, telling investigators she had done it for years—perhaps as many as ten. In March 2022, she pleaded guilty to one count of wire fraud and one count of filing a false tax return. She had not filed tax returns at all from 2017 through 2020, and earlier returns falsely claimed stolen equipment as business expenses.

In October 2022, Jamie was sentenced to nine years in prison. She forfeited six luxury vehicles, four houses, and more than $560,000 held in her company’s account. Yale’s official loss totaled $40,504,200. The U.S. Treasury was also shorted over $6 million in unpaid taxes.

Lessons for Every Organization

This fraud shows how easily a single employee can exploit weak procurement controls—even at an elite institution with a $41 billion endowment. Here are some key lessons:

  1. No One Is Above Suspicion: Long-term employees often have the trust and insider knowledge needed to commit major fraud. Familiarize yourself with employees’ roles and watch for unexplained changes in lifestyle.
  1. Monitor Repetitive Sub-Threshold Purchases: Splitting one large order into many small ones is a common trick. Regularly examine patterns of similar purchases under approval limits.
  1. Heed Behavioral Red Flags: Living beyond means, unusual personal expenditures, or unexplained wealth should prompt further review.
  1. Take Every Tip Seriously: The ACFE’s research shows that most frauds are uncovered by tips. Encourage a culture that supports whistleblowers and investigates promptly.
  1. Don’t Overlook Tax Implications: Illicit income is still taxable. Filing false returns or failing to file can lead to extra penalties and charges.

Hear the Whole Story and Earn CPE

For more details on this case—along with expert insights on fraud and ethics—listen to the full “Oh My Fraud” podcast episode. You can also earn free CPE credit by enrolling in the course on Earmark. 

The story of how such a large-scale fraud remained hidden for so long offers valuable lessons about the power of small gaps in oversight—and the big price organizations pay when those gaps go unaddressed.

When Trust Turns Toxic: Inside the World of Pink Collar Crime

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Could your most trusted employee be secretly siphoning company funds?

In a recent episode of the Oh My Fraud podcast, fraud investigator Kelly Paxton shares how seemingly reliable staff—often overlooked for potential misconduct—can exploit organizational blind spots.

According to the Bureau of Labor Statistics, nearly 90% of bookkeepers in the United States are women. While many people assume women are less likely to commit fraud, Paxton warns that it’s not gender but position and access that matter most. By trusting certain employees implicitly and failing to establish strong controls, businesses inadvertently cause serious financial losses. 

As Paxton’s cases illustrate, ignoring stereotypes and adopting “trust but verify” strategies are crucial steps toward preventing fraud.

Kelly Paxton’s Path to Fraud Investigation

Kelly Paxton did not start out in law enforcement. She began her career in financial services as a commodities and bond trader. One day, a U.S. Customs agent called her brokerage firm asking about a suspicious client. Kelly alerted the agents, which led to a deeper conversation—and ultimately, a job offer. She joined U.S. Customs and conducted investigations into money laundering, narcotics, and other major crimes before moving into background checks for federal agencies.

Her investigative focus shifted when she joined a local sheriff’s office and noticed that nearly all the embezzlement suspects she encountered were women. Wanting to understand why, she discovered criminologist Kathleen Daly’s 1989 work referencing “pink collar crime,” a term describing embezzlement often perpetrated by those in bookkeeping or finance positions. Paxton’s takeaway: Access plus trust is the real key—90% of bookkeepers may be women, but it’s the opportunity that matters most.

Understanding Pink Collar Crime

Pink collar crime typically involves smaller amounts stolen over extended periods—fraudsters who make subtle “lifestyle” upgrades rather than lavish purchases. This can happen when the organization deeply trusts an employee. In many cases, they’re seen as family, invited into the home, and never suspected of wrongdoing. Victims are often embarrassed when they discover the truth and hesitate to report it—what Paxton calls “no victim shaming”: the more we shame victims, the less they come forward.

Key characteristics include:

  • Position-based access: Bookkeepers and finance staff control incoming or outgoing funds.
  • Incremental theft: A pattern of small transactions that grow larger over time.
  • Rationalization: Fraudsters may plan to “pay it back” but rarely do.
  • Deep trust: Employers assume loyal staff, especially women, “would never steal.”

When Pink Collar Crime Turns Deadly: “Red Collar” Cases

Most pink-collar crimes involve embezzlement without violence. However, some cases escalate to “red collar crime,” where financial fraud intersects with homicide. As Paxton explains, desperate fraudsters may resort to extreme measures when they fear exposure.

The Lori Isenberg Case

One chilling example is Lori Isenberg, a nonprofit executive director in Coeur d’Alene, Idaho. Her organization provided housing for low-income individuals—hardly the type of place where you’d suspect significant embezzlement. Yet over three years, Lori allegedly stole between $500,000 and $2.5 million by creating fake accounts, forging checks, and misusing her daughters’ and husband’s names.

When investigations closed in on her scheme, Lori took drastic action. In February 2018, on the same day local news broke a story about her suspected fraud, she took her husband out on a boat trip in the freezing Idaho winter. He mysteriously fell overboard and drowned. An autopsy revealed a lethal dose of Benadryl in his system. Lori claimed it was a suicide attempt gone wrong—an explanation contradicted by digital evidence showing she researched how to drug someone with Benadryl.

After disappearing for four months, Lori was eventually caught and accepted an Alford plea, which essentially concedes that a jury would likely find her guilty without formally admitting guilt. She received 30 years for second-degree murder, with an additional 5 years for her financial crimes, making it highly unlikely she will ever be released. The Lori Isenberg case underscores how far a fraudster might go to avoid being exposed—a stark reminder that misplaced trust and weak internal controls can have devastating consequences.

The Role of Trust, Bias, and Access

Society is conditioned to trust women—parents instruct children to seek a “nice lady” for help if they’re lost, for instance. This assumption carries over into workplaces, where female employees handling finances often face less scrutiny.

Paxton recalls her own days in U.S. Customs: “You put two women in a Honda Accord, and no one thinks anything is unusual. You put two men in a Ford Focus, and they’re pegged as cops.” Similarly, a “helpful bookkeeper” can escape suspicion for years.

What About Sentencing?

Sentencing for embezzlement and related fraud varies widely:

  • Federal Cases: They follow sentencing guidelines based on dollar amounts and other factors.
  • Local Cases: Judges can have broad discretion. Some jurisdictions impose tough sentences, while others might view fraud as a “civil matter,” limiting law enforcement intervention unless there are other serious elements (e.g., homicide).

This inconsistent approach can embolden perpetrators who believe they can dodge severe penalties—until a high-profile case, a dogged investigator, or a high-stakes victim (like a large corporation) brings full prosecution.

Avoiding Blind Spots: Trust but Verify

Rather than assuming anyone is “too nice” or “not smart enough” to steal, Kelly Paxton encourages businesses and nonprofits to focus on position-based controls:

  1. Segregate Duties: Ensure no single person handles every financial task.
  2. Surprise Audits: Don’t just check large transactions; occasionally review smaller ones.
  3. Vendor Verification: Confirm that vendors and accounts are legitimate, especially if newly created.
  4. Encourage Transparency: Cultivate a culture where employees and clients can report suspicious activity without fear.
  5. No Victim Shaming: Publicizing embezzlement—when safe to do so—helps others learn and prevents repeat offenders from quietly moving on to the next company.

Learn More from Kelly Paxton

Kelly Paxton now hosts the Fraudish Podcast (formerly Great Women in Fraud), interviewing fraud investigators, victims, and even fraudsters themselves. She also covers topics like red-collar crime, employee embezzlement, and how biases impact investigations. Her new book, Embezzlement: How to Detect, Prevent, and Investigate Pink Collar Crime, is available on Amazon.

For a deeper look at Lori Isenberg’s story—and other fraud sagas—listen to the full episode of Oh My Fraud. You can also earn CPE credit by downloading the Earmark app and completing a short quiz related to the episode.