As first reported by The Athletic, a former employee in the finance department of the Jacksonville Jaguars is facing federal charges for allegedly stealing more than $22 million from the team over a four-year period. The employee, Amit Patel, was a mid-level employee who worked for the team for at least five full seasons, beginning in 2018. How did it happen?
According to the charging document, prosecutors allege that in 2019 Patel became the “sole administrator” of the Jaguars’ virtual credit card (VCC) program, which allowed him to ultimately embezzle funds from the team. Prosecutors allege that Patel used fraudulent credit card charges of $22,221,454.40 to purchase:
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Bets with online gambling websites
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Tesla Model 3
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Nissan pickup truck
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Membership at a country club
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Condo in Ponte Vedra Beach, Florida
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Personal travel
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Cryptocurrency and non-fungible tokens (NFTs)
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Patek Phillippe watch worth $95,000
Every Employee Theft Has a Motive
Patel’s attorney has stated that he used the vast majority of the $22 million not to fund his lifestyle, “but in a horribly misguided effort to pay back previous gambling losses that utilized the Jaguars’ VCC program.”
According to the team, the Jaguars engaged “experienced law and accounting firms to conduct a comprehensive independent review, which concluded that no other team employees were involved in or aware of his criminal activity.”
How Did the Alleged Perpetrator Pull It Off?
So how was Mr. Patel, working alone, able to steal the equivalent of the initial contract for the eighth pick in the most recent NFL draft?
The Athletic spoke with multiple people who indicated that Patel wasn’t a finance mastermind, but rather a guy in the right place at the right time. While the Jaguars are an NFL franchise with an estimated market value of approximately $4 billion, the team’s finance department was understaffed. In addition, the team has experienced some turnover in key positions and switched to a new credit card system, both of which created an opportunity that Patel was able to exploit.
While many employees who commit fraud will flaunt their ill-gotten gains, according to one person who knew Patel during his time at the Jaguars, “he was super basic.” He didn’t wear fancy clothes or brag about the trips he took on private jets. He was not someone you would assume was stealing millions of dollars from his job.
The Jaguars switched to a virtual credit card system about a year after Patel’s hiring. A virtual credit card is a digital version of a plastic credit card. They are normally considered more secure than having employees carry around physical cards, and keep the information private when making online purchases. In addition, VCCs can offer better controls over spending and easier expense reconciliation.
Patel’s job was to oversee the budget activity for each department, and he was responsible for helping each of the department heads code individual expenses. He worked with multiple different department heads and had connections with everyone across the organization.
Patel helped prepare the Jaguars’ monthly financial statements, oversaw department budgets and acted as the administrator of the VCC program. According to Patel’s attorney, the Jaguars were short-staffed. “Normally you’d have segregation of duties, those kinds of internal checks and balances and they had lost people through attrition…You’re supposed to have Person A do this part and Person B do this part as a check and balance and segregation of duties and all of a sudden he was doing both roles.”
The federal charging documents state that as the sole administrator of the VCC program, Patel could create user accounts, approve new VCCs, request changes to the available credit for the VCCs and classify all VCC transactions in the organization’s general ledger. It is alleged that Patel created fraudulent entries to ensure that the total dollar of VCC expenses matched the balances paid by the Jaguars. He would identify legitimate recurring VCC charges, such as catering, airfare and hotel charges. He duplicated those transactions, inflated the amounts of the transactions, created fictitious transactions that might sound plausible and moved legitimate VCC charges from upcoming months into the current period.
How the Fraud Could Have Been Avoided
As The Athletic interviewed officials from other NFL teams or other professional sports franchises, they were all surprised at the lack of oversight over an employee with so much control over spending. One former finance employee for another NFL team said their CFO ran their team’s VCC program, accounts payable received the statements for the cards and then a manager approved each report. If proper segregation of duties had been put into place, Patel’s scheme could have been caught much earlier.
In addition, Patel’s alleged fraud would likely have been detected had the Jaguars been analyzing actual results versus budget. If each department head was receiving a monthly update of expenses versus budget and investigating significant fluctuations from budget, that should have alerted someone to the potential problem.
Mr. Patel is expected to plead guilty to charges of wire fraud and illegal monetary transactions, his attorney stated.
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