# Preventing Embezzlement in Booster Clubs: Cases and Red Flags

> How booster club embezzlement happens, from real cases: sole signers, debit cards, unreviewed statements, and concession cash, plus red flags and next steps.

- URL: https://boosterclub.org/finance/embezzlement/
- Section: Finance
- Updated: 2026-10-08

Booster club embezzlement almost always follows the same path: one trusted volunteer controls the bank account, the debit card, the deposits, and the records, and nobody else looks at the bank statement. Theft from booster clubs is rarely sophisticated. It succeeds because the controls that would catch it in a month were never put in place.

This page describes how theft happens in practice, using real cases, then lists the red flags and the steps the board takes when money is missing. Every board member shares responsibility here. Officers owe the club a fiduciary duty, a legal obligation to manage its assets with care, and a board that never asked to see a bank statement will have trouble explaining that to members.

## How Booster Club Theft Happens

The schemes repeat from case to case:

1. **Sole control.** One person signs checks, makes deposits, keeps the books, and receives the statements.
2. **Debit card use.** The club's debit card pays for personal purchases or withdraws cash at an automated teller machine (ATM).
3. **Counter withdrawals.** Cash taken out at the bank with withdrawal slips.
4. **Checks to self or family**, often labeled as reimbursements, sometimes with forged endorsements.
5. **Cash never deposited** from concessions, gates, car washes, and dues.
6. **Payment app transfers** from the club's app account to a personal account.
7. **False reports.** Treasurer's reports that show money the bank does not have.
8. **Quiet repayments.** Personal deposits back into the club to cover a shortfall before a review.

## Real Cases

The cases below come from official investigation reports by the Tennessee Comptroller of the Treasury. Indictments and charges are accusations, not findings of guilt.

### Concession cash kept, Franklin County, Tennessee (2018)

The Tennessee Comptroller's Office found that a middle school athletic booster club treasurer took at least $4,927 between November 2016 and March 2017. She kept at least $4,087 in cash from concession sales at basketball games, wrote a club check for $840 toward personal vehicle loans, and covered it with false entries in the records. A grand jury indicted her in November 2018. The Comptroller noted that club officials "failed to separate financial responsibilities, review bank statements, and ensure that two signatures were required and included on all checks."

### Debit card and withdrawal slips, Upperman High School, Tennessee (2024)

A fishing team booster club treasurer with direct access to the checking account and debit card took at least $14,806.82 between November 2022 and March 2024, according to the Comptroller's Office. She withdrew $11,215 in cash using 15 withdrawal slips, took $798 from ATMs, wrote eight checks totaling $2,393.82 to her husband and endorsed them with his name, and used the debit card for $400 in cruise charges. She also made $6,025 in personal deposits she said were repayments. A grand jury indicted her in July 2024. The Comptroller said the case "involved one person who was given too much control over all financial duties without others being involved."

### Payment app transfers and car wash cash, DeKalb County, Tennessee (2026)

Investigators found that a band boosters treasurer misappropriated at least $48,650.42 between 2021 and 2025. Of that, $44,821.92 moved from the club's payment app account to her personal bank account or to a family member; $2,543.50 collected through the app never reached the club's bank; and a car wash that raised at least $1,300 produced a $15 deposit. Investigators also questioned $74,040.97 in payments without documentation, and found that the treasurer gave the board false financial reports that overstated the club's bank balances. School officials noticed the discrepancies. The club dissolved in December 2025, and a grand jury indicted the treasurer in August 2026.

## What the Research Shows

The Association of Certified Fraud Examiners' 2024 *Report to the Nations*, a study of 1,921 cases worldwide, found:

- The typical fraud lasted **12 months** before detection.
- **43 percent** were detected by a tip, more than three times any other method.
- **32 percent** occurred mainly because of a lack of internal controls, and another **19 percent** because existing controls were overridden.
- Nonprofits had a median loss of **$76,000**.
- **84 percent** of perpetrators showed at least one behavioral red flag; the most common were living beyond their means (39 percent) and financial difficulties (27 percent).

## Red Flags

**In the records:**
- Bank statements unavailable, late, or "lost"
- Treasurer's reports with no reconciliation or no statement behind them
- Deposits that lag events by days or weeks, or are smaller than count sheets
- Cash withdrawals, ATM activity, or checks to "cash"
- Reimbursements to the treasurer or relatives approved by the treasurer
- Payment app balances that never move to the bank
- Statement address or online contact details changed without board action
- Unexplained personal deposits into the club account
- Vendors or the school reporting late or bounced payments

**In behavior:**
- Refuses to share duties or let anyone see the books
- Delays the financial review or the handoff to a successor
- Defensive or angry when asked routine questions
- Visible spending that does not fit known circumstances, or known financial stress

A single flag is not proof. It is a reason to look at the bank's own records.

## Controls That Stop Each Scheme

| Scheme | Control that stops it |
|---|---|
| Sole control | Segregation of duties; two signers; non-signer review |
| Debit card and ATM use | No club debit cards |
| Counter withdrawals | Non-signer reviews every statement line monthly |
| Checks to self or family | Two unrelated signers; nobody signs their own payment |
| Cash not deposited | Two-person counts, signed count sheets, deposit within one or two business days |
| Payment app transfers | Business accounts in the club's name, linked only to the club's bank; monthly reconciliation |
| False reports | Reviewer reads the bank's statement, not the treasurer's summary |
| Quiet repayments | Annual financial review and review whenever the treasurer leaves |

See [Internal Controls for Booster Clubs](https://boosterclub.org/finance/internal-controls/) for each control in detail.

## What to Do When Money Is Missing

1. **Do not confront the person alone or accuse anyone publicly.** Facts first.
2. **Get the bank's records directly.** Two officers request statements and check images from the bank, not from the treasurer.
3. **Protect the accounts.** The board votes to remove the person's signing authority; officers notify the bank, cancel cards, and change online banking, payment app, and processor passwords.
4. **Preserve everything**: records, emails, texts, and the books. Make copies.
5. **Quantify the loss** with a timeline. For larger or complex losses, hire a CPA (certified public accountant) or forensic accountant.
6. **Notify the insurer promptly** if the club has crime or fidelity coverage. Policies typically require prompt notice and may require a police report; read the policy. See [Booster Club Insurance](https://boosterclub.org/governance/insurance/).
7. **Report to law enforcement**: the local police, sheriff, or district attorney. In some states a state auditor or comptroller also investigates booster clubs; this varies by state.
8. **Notify the school or district** as the club's agreement with the district requires.
9. **Avoid private repayment deals in exchange for silence.** Agreeing not to report a crime in exchange for repayment can itself be unlawful in some states and can complicate an insurance claim. Get legal advice before signing any repayment agreement.
10. **Tell members the facts** once the board has them: what was found, what was reported, and what controls are changing. Stick to documented facts.
11. **Disclose on the federal return if required.** A club filing the full Form 990 answers whether it became aware of a significant diversion of assets during the year. The Internal Revenue Service (IRS) considers a diversion significant if it exceeds the lesser of 5 percent of gross receipts, 5 percent of total assets, or $250,000. The explanation goes on Schedule O without naming the person.

## Common Mistakes

- **"She would never."** Trust replaces controls, and the people trusted most are the ones with access.
- **Handling it quietly.** Private deals leave no record, often fail, and can leave the board exposed.
- **Letting the suspected person keep access** while the board decides what to do.
- **Relying on the treasurer's own records** to investigate the treasurer.
- **Fixing nothing afterward.** The same gaps invite the next loss.

## Checklist

### Prevention

- [ ] Adopt and enforce two-signer, no-debit-card, and two-person cash rules (board)
- [ ] Have a non-signer review and sign every monthly bank statement (reviewer)
- [ ] Hold a financial review every year and whenever the treasurer or a signer leaves (board)
- [ ] Carry crime or fidelity insurance (board)

### If money is missing

- [ ] Obtain statements and check images directly from the bank (two officers)
- [ ] Remove the person's signing authority and online access by board vote
- [ ] Preserve all records and communications (secretary)
- [ ] Document the timeline and amount of the loss (board or accountant)
- [ ] Notify the insurer and file a police report
- [ ] Notify the school or district as required (president)
- [ ] Disclose on Form 990, if filed, when the diversion is significant (treasurer)
- [ ] Adopt stronger controls and report them to members (board)

## Related Pages

- [Internal Controls for Booster Clubs](https://boosterclub.org/finance/internal-controls/) for the rules that prevent each scheme
- [Handling Cash at Booster Club Events](https://boosterclub.org/finance/cash-handling/) for concession and gate procedures
- [The Monthly Treasurer's Report](https://boosterclub.org/finance/treasurer-report/) for questions that expose false reports
- [Booster Club Insurance](https://boosterclub.org/governance/insurance/) for crime and fidelity coverage
- [Fiduciary Duties of Booster Club Officers](https://boosterclub.org/governance/fiduciary-duty/) for board accountability

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*This page is general information for volunteer-run booster clubs. It is not legal,
tax, or accounting advice, and BoosterClub.org is not a law firm, accounting firm, or
government agency. Rules change and vary by state and district. Confirm current
requirements with the IRS, the relevant state agency, the school district, and a
qualified professional before acting. If a fact on this page is out of date, we want
to know.*

## Sources

1. Tennessee Comptroller of the Treasury: https://comptroller.tn.gov/news/2018/11/8/franklin-county-woman-indicted-for-theft-from-booster-club.html
2. Tennessee Comptroller of the Treasury: https://comptroller.tn.gov/content/dam/cot/administration/documents/press-releases/2024/UppermanFishingBooster070324.pdf
3. Tennessee Comptroller of the Treasury: https://comptroller.tn.gov/news/2026/8/10/former-dekalb-county-band-boosters-treasurer-indicted--after-misappropriating-more-than--48-000.html
4. IRS: https://www.irs.gov/instructions/i990