The finance director of La Jolla Music Society, accused of embezzling about $ 113,000, was fired following an internal investigation, the organization said.
A police report was filed, but Music Society executives said they were still determining whether to take legal action.
A statement released on March 1 said LJMS fired Chris Benavides after determining that he had embezzled business funds for his personal use. The payments were discovered during a financial review by LJMS Finance Committee Chairman Stephen Gamp.
LJMS President and CEO Todd Schultz said the alleged embezzlement was uncovered last month when a transaction initiated by Benavides was questioned by members of the finance committee and was the subject of further investigation. Benavides was asked to explain the transaction.
“He didn’t get a satisfactory response,” Schultz said. “So we looked at the issue and established what was going on. On February 20, we met with him and he confirmed that the embezzlement was for personal use. He did not specify what the funds were used for, but we do know that some of the transfers were made to a mortgage company and we are investigating the rest.
Benavides could not be reached for comment.
According to Shultz, Benavides said he accidentally used the company’s bank account.
LJMS management has filed a report with the San Diego Police Department as required to file an insurance claim and recover some, if not all, of the money lost.
Police spokesman Scott Lockwood said the department’s economic crimes unit had been briefed. After completing an investigation, the unit will present any evidence it collects to the San Diego County Attorney’s Office, who will determine whether to file a complaint.
“Since something of this nature previously seemed inconceivable, there is also a comprehensive review underway to review and modify as necessary all existing procedures, internal controls and approval processes,” the Music Society statement said.
“We need to conduct an investigation to understand the scope of what happened,” Schultz said. “We will hire a forensic accountant to examine our books. We know some of what happened, but we need to find out more.
LJMS will consider civil action upon completion of the forensic audit and determination of total loss.
The flights are said to have taken place in fiscal year 2019-2020. Schultz said he was convinced they would have been identified sooner or later.
“With the process that we have now, we’ve figured it out, so I feel like our systems are solid,” he said. “Part of the investigation will not only be about what happened, but also the weakness that allowed this to happen. But it is premature to say what we need to change.
“It was inevitable that this would be found, because we have an audit every year, and the year under which it started is about to be reviewed,” Schultz added. “During this examination, we are certain that it would have been discovered. There are two aspects to the process that could have caught this, and the first one caught it. If not, the audit would have done so.
LJMS’s home, the $ 82 million Conrad Prebys Performing Arts Center at 7600 Fay Ave., opened in 2019. It contains a 500-seat concert hall, 2,000 square foot flexible performance space, a meeting / reception room and a large courtyard center. Schultz said LJMS had no accumulated debt and had fully covered the costs of building the Conrad.
But that doesn’t relieve the sting for some.
“For the staff who have been here for a long time, it is extremely difficult,” said Schultz, who was hired in december. “[Benavides] was with the company for 15 years and was part of the fabric of the organization.
Existing staff, with the support of the external auditors, will manage the financial operation while interviews for a new finance manager will be conducted, according to the LJMS statement.
“The Jolla Music Society remains well equipped to continue to implement its artistic and educational programs throughout 2021,” the statement said.
– San Diego Union-Tribune writer George Varga contributed to this report.
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