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Fed investigation heats up of $2.6m in missing beef checkoff funds

Oklahoma Beef Council internal investigation documented $2.6 million in employee theft between 2009 and 2016.

The U.S. attorney's office in Oklahoma City, Okla., confirmed that it is investigating the alleged embezzlement of $2.6 million from the Oklahoma Beef Council.

In September 2016, the results of an internal investigation into potential Oklahoma Beef Council employee wrongdoing for former employee Melissa Morton, the director of accounting and compliance, were turned over to federal authorities in Oklahoma. At this point, due to an ongoing federal criminal investigation and civil matters, the Oklahoma Beef Council said it is limited in the details it can share.

The Oklahoma Beef Council did note that when initial evidence was discovered, it notified the appropriate officials of its intent to launch an internal investigation into the inconsistencies found.

“We immediately terminated the employee and hired an accounting firm to perform an extensive forensic analysis and assessment, which documented $2.6 million in employee theft between 2009 and 2016,” the Oklahoma Beef Council said.

The council provided this information to federal authorities in September 2016 to ensure that swift action could be taken. “Our goal throughout this process has been to speed recovery and restitution to the greatest extent possible. The board of directors and staff have cooperated fully with federal authorities as the investigation has moved forward,” the council said in a statement.

According to Tom Fanning, a cattle producer and chairman of the Oklahoma Beef Council, “Our board and staff take great pride in serving beef producers in investing their beef checkoff dollars to grow and protect beef demand. Discovering you have a staff member that did not share that vision and abused our trust has been a devastating blow to all of us. We have taken every step to address this matter to ensure we are following through in our responsibilities to Oklahoma beef producers and are awaiting the results of the criminal investigation.”

In the meantime, the Oklahoma Beef Council has taken the findings from the forensic analysis and assessment to strengthen its accounting systems and internal controls to ensure the integrity of the organization. It has moved forward in its operations with a third-party accounting firm to ensure an additional level of oversight and a greater level of segregation of duties. The council will be adding a new director of compliance position to the team to assist with checkoff compliance and outreach.

“We have taken what we have learned from this situation to create a stronger organization with a clear vision to moving forward in our mission of serving Oklahoma’s farming and ranching families,” Fanning said.

Polly Ruhland, executive director of the Cattlemen’s Beef Board, said, “Unfortunately, embezzlement can and does occur in both for-profit and nonprofit business environments, and when it happens, it most frequently involves a clever individual’s flagrant abuse of a significant level of trust and responsibility placed in him or her by an organization.”

Ruhland added, "I am not aware of another incident similar to this in the checkoff’s history, and I remain extremely confident in the audit and oversight systems of (the U.S. Department of Agriculture), the Cattlemen’s Beef Board and the beef checkoff program. I understand that when inconsistencies were discovered, the Oklahoma Beef Council board of directors took swift and appropriate action and has been fully assisting state and federal authorities.”

Ruhland said if wrongdoing of the Oklahoma Beef Council and the farmers and ranchers of Oklahoma is proved, she hopes that the “individual is brought to justice and appropriate restitution is made.”

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