Georgetown University’s Newspaper of Record since 1920

The Hoya

Georgetown University’s Newspaper of Record since 1920

The Hoya

Georgetown University’s Newspaper of Record since 1920

The Hoya

Former GU Employee Wanted for Fraud

A former administrator apparently fled the country after he was accused of embezzling more than $300,000 from the university, in the second major fraud case to come to light at Georgetown in as many years, according to recently unsealed court records.

Federal prosecutors accuse Pedro Paulo dos Santos, who held various positions at Georgetown from 1998 to 2005, of falsifying documents, diverting funds and inventing a fictitious company in order to obtain more than 100 fraudulent checks for nonexistent goods and services.

Dos Santos, who served as an associate director and program coordinator of the university’s Brazilian Studies Program from 2002 until his employment was terminated in 2005, told a university colleague that he was leaving for Brazil on March 23, 2005 – the day after he was first confronted by university auditors – and has since evaded capture by U.S. authorities, according to court records.

A federal grand jury indicted dos Santos in his absence last July on charges of bank fraud, mail fraud, money laundering and theft. The indictment and other court records remained sealed until earlier this month, when a U.S. District Court judge ordered their release.

The new allegations of fraud come only a year after a former edical Center administrator, Adriana Santamaria, was sentenced to 20 months in federal prison for stealing more than $350,000 from the university in a series of schemes from 1995 to 2002. Because Santamaria had stolen federal grant funds, which include overhead costs not associated with any individual program, Georgetown was forced to repay over $500,000 to the federal government. The university has cumulatively lost over $1 million as a result of the two incidents of recent fraud.

Although university officials said that they had implemented new safeguards to prevent such theft after they discovered Santamaria’s embezzlement in 2003, court documents show that dos Santos used similar methods to funnel money out of university accounts for almost two years afterward.

Court records indicate that, like Santamaria, dos Santos issued fraudulent expense vouchers and invoices for services never provided, forged signatures and deposited some of the stolen funds in relatives’ bank accounts before transferring them into his own accounts.

Prosecutors allege that dos Santos issued 118 fraudulent checks for consulting services to a fictitious lecturer beginning in 2001, drawn from a university checking account at Riggs Bank’s Georgetown branch on M Street.*

The scheme went undetected by the university’s internal audit mechanisms until January 2005, when Riggs Bank alerted Georgetown’s accounts payable department that dos Santos was depositing the checks into his own bank account, according to the court records.

University auditors later determined that dos Santos had issued fraudulent checks totaling about $311,000 from October 2001 to January 2005, court documents indicate. Dos Santos admitted the theft and offered to sign the deed for his house over to the university as repayment when confronted by auditors on March 22, 2005, according to the records.

But on the following day, a co-worker received a phone message from a caller identifying himself as “Pedro” saying that he was “10 minutes away from boarding” a plane to Brazil, according to a U.S. Secret Service affidavit.

“I will be in Brazil by the time you get this message,” the caller said, according to the affidavit.

Channing Phillips, a spokesman for the U.S. Attorney’s Office, told The Washington Times for an article last week that dos Santos is still believed to be in Brazil and that the indictment remains outstanding.

Phillips, who could not be reached for comment for this report, declined to comment to the Times on any potential extradition requests, citing Justice Department policy.

In 1999, dos Santos was convicted of illegally reentering the United States after deportation, a federal crime, according to the Secret Service affidavit.

Dos Santos was hired by the McDonough School of Business in 2000 and transferred to the School of Foreign Service’s Brazilian Studies Program in 2002, where he served until he was fired in arch 2005. Most of the fraudulent activities took place while dos Santos was an employee in the SFS, according to the indictment.

University spokeswoman Julie Bataille did not respond to questions regarding whether or not administrators performed a background check on dos Santos before he was transferred to positions with financial authority.

The newly unsealed court records, which describe the alleged theft in detail, indicate that dos Santos was able routinely to evade Georgetown’s financial oversight procedures and avoid suspicion by setting up a fictitious consulting service that he could use to receive and reroute university funds.

Prosecutors allege that dos Santos copied the credentials of a former Georgetown lecturer, Lilia Katri Moritz Schwarcz, to invent a resume for an invented consultant named Nelson Katri Arias. Dos Santos filled out expense vouchers for lecturing and consulting services he said Arias had provided, forged the required signature of departmental supervisor Naomi Moniz, then sent Georgetown invoices that appeared to be from Nelson Arias, Inc., a nonexistent company, according to court documents.

After Georgetown issued each of the 118 requested checks, dos Santos endorsed them as Nelson Arias and deposited them in either his own checking account or an account owned by his niece and her husband, the records indicate. Funds deposited into his relatives’ accounts were later transferred to dos Santos’ own accounts, according to the indictment.

Bataille said that the dos Santos allegations prompted Georgetown to add financial safeguards to its accounting system, which had already been bolstered by new oversight procedures in response to the Santamaria case. The reforms implemented after the university discovered Santamaria’s embezzlement in 2003 focused on reducing the financial authority given to individual administrators and creating new documentation requirements, she said.

“In light of the dos Santos case, over the past two years, Georgetown has also taken steps to increase oversight procedures, in particular by establishing new policies requiring review and reconciliation by financial managers,” Bataille said. “On the main campus specifically, there has been an increased enforcement of existing policies and procedures [and] the development of additional controls and procedures.”

Bataille said that new training requirements and increased communication between financial administrators have also been developed.

Administrators declined to comment on most aspects of the alleged theft. Chief Financial Officer Christopher Augostini and oniz did not respond to requests for comment yesterday. The Center for Latin American Studies, which oversees the Brazilian Studies Program, referred questions to Bataille, who did not respond to questions about the details of the case.

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