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Alex Simonka embezzled USCGA Athletic Assoc. funds

Just dropped into my inbox:

Fellow Alums: The Superintendent of the Academy, RADM J. Scott Burhoe, asked me to forward the following email, which he has distributed to the Academy staff re: the Alex Simonka investigation.
CDR Jim Sylvester, USCG (ret) ’71
USCGA Alumni Association
Dear Academy Community,
We all were deeply impacted by the tragic death of Alex Simonka last March. People have come to me wanting to know more facts to replace rumor and innuendo. Although I and the Academy administration strive to be transparent, we couldn’t share more information about the allegations of misappropriation of Coast Guard Academy Athletic Association (CGAAA) funds because doing so could have jeopardized an ongoing investigation.
Alex SimonkaWhen I previously reported that the U.S. Attorney had launched an independent investigation, I said I would say more when authorized to do so. The U.S. Attorney’s office has now given me permission to share critical facts. I’ve chosen to share them internally, understanding they will reach a wider audience. Public trust of institutions like ours requires complete, accurate public disclosure to preserve the high ethical standards we represent.
The investigation began in early 2008 after an anonymous letter was received by Government Accountability Office Fraudnet, and was referred to the Coast Guard Investigative Service. The letter expressed concern regarding the possible misuse of CGAAA funds. The subsequent investigation estimated that approximately $1.4 million had been embezzled from the CGAAA between 2004 and 2009.
In addition to being the Women’s Basketball Coach, Mr. Simonka was the Athletic Division Business Manager and CGAAA Director since 1993. In these positions, he played an essential role in the management and expenditure of CGAAA funds. When we were first advised of possible wrongdoing in August 2008, we acted immediately to remove his authority over CGAAA’s accounts.
Continuing concerns by the investigators led me to decide to place Mr. Simonka on administrative leave, and the Assistant Superintendent informed him during a face-to-face meeting on March 11, 2009. Although Mr. Simonka was not asked any questions, he offered a general apology and expressed regret. The Assistant Superintendent informed Mr. Simonka of the availability of counseling and support services – including services available through the Employee Assistance Program and at the Academy.
Mr. Simonka was first interviewed by the investigators on March 10 and he admitted embezzling CGAAA funds since sometime in 1999 or 2000, which he said were used to gamble. Mr. Simonka wrote checks from the CGAAA’s account payable to himself. In order to avoid detection, he created a record of “dummy checks” that made them appear to be payments to a legitimate vendor or for a legitimate CGAAA purpose.
Mr. Simonka told investigators he was solely responsible for the thefts and the investigation found no evidence that any other Coast Guard employee was involved in Mr. Simonka’s actions. The amount of funds taken before 2004 could not be determined. Unfortunately, it does not appear that the Academy will be able to recover any of the lost funds.
We cooperated fully throughout the investigation and I thank the U.S. Attorney, the Coast Guard Investigative Service, Internal Revenue Service Criminal Investigations Division, and Department of Homeland Security Inspector General which diligently investigated this matter.
The CGAAA operated for more than half a century, and developed its own ad hoc practices which lacked adequate internal controls such as segregation of duties and effective oversight over handling of funds. Before the reports that spurred the investigation, we had already begun the process of converting the CGAAA to a nonappropriated fund instrumentality under the auspices of the Assistant Commandant for Human Resources who approved it on March 24, 2009.
The former CGAAA is now the “Coast Guard Academy Athletic Activity Fund” and it is subject to the same financial management regulations that govern all similar instrumentalities, like the Coast Guard Exchange and the Cadet Fund. These regulations require segregation of duties to ensure that no one person handles all elements of a transaction. They also require greater transparency of fiscal operations and regular oversight by the Academy Comptroller.
With the cooperation of the Director of Athletics we have transformed the financial management methods of the Athletics Division. After implementing appropriate lessons learned, we will move forward with confidence that processes now in place will protect the integrity and effectiveness of these programs that are so important to Academy life.
RADM J. Scott Burhoe
Superintendent, USCGA
U.S. Coast Guard Academy Alumni Assn
47 Mohegan Ave
New London, CT 06320

This is gonna get uglier before it quiets down.