In this episode, a university's polished image hides a problem that starts with four sheets of paper and a fully booked calendar. What begins as a routine audit of athletic department accounts turns into a trail of redirected checks, lookalike bank accounts, and hesitant answers from a trusted insider.
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Welcome to the All Things Internal Audit Fraud, where things are not always what they seem.
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Each episode brings you a fictionalized fraud story inspired by real events with plenty of twists, red flags, and lessons for internal auditors along the way.
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A full court fraud.
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Part 1, cracks in the facade.
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Lordton University looked like a picture of success.
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Its Midwestern campus was beautiful, enrollment was growing, and its men's basketball team had just made a run in the national tournament.
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But internal auditor Annette Parker was about to find cracks beneath that polished facade.
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Parker had been assigned to audit the athletic department's accounts.
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During planning, she noted the areas of revenue that could be manipulated, as specified by the university's risk matrix.
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Among the six accounts she identified for the engagement, one stood out, money earned by renting the university's athletic facilities to outside organizations.
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The person in charge was Lucas Jackson, Lorton's associate athletic director and a former university basketball player.
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Jackson controlled the use of the athletic facilities, including the rental of the basketball courts, gymnasiums, and other athletic spaces to outside organizations.
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When Jackson missed the audit entrance conference, his assistant, Jonathan Fisher, attended instead.
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Parker asked Fisher for the rental scheduling records.
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He handed her four sheets of paper.
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Parker was confused.
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She knew how busy the facilities were.
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When she asked whether there were more records, Fisher told her Jackson handled that.
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He only kept the calendar.
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But when Parker reviewed the calendar, she noticed that it was fully booked.
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For Parker, the mismatch between the rental paperwork and the calendar was the first red flag.
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Part 2, getting the story on record.
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Parker needed to understand who had rented the facilities, how much they had paid, and where the money had gone.
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The calendar gave her a list of renters, but before contacting them, she interviewed Jackson.
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Parker did not yet have the full picture.
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Still, she wanted his version on record.
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She felt the documents would eventually reveal any contradictions in Jackson's answers.
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Jackson was usually charismatic and upbeat, but this time he was distant.
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He paused for long stretches after basic questions.
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He told Parker he alone managed the rental process and that all income went directly to Lorton University.
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But when she asked how payments were handled,
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He stumbled through an explanation about receiving checks and giving them to the office secretary for deposit.
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Parker did not rely on that explanation.
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She sent confirmation letters directly to the renters.
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Their responses changed everything.
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Part 3, Lookalike Accounts.
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Renters told Parker that Jackson required them to hand checks directly to him or mail them to his home.
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When one renter questioned those instructions, Jackson implied that failing to follow the way could cost the organization access to the facility.
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The checks were made payable to entities that sounded connected to the university.
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One was the Lorton Athletics Fund.
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Over five years, more than $216,000 flowed into that account through checks labeled Lorton BB, LU Gem, Lorton University B-Ball, and similar descriptions.
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But it was not a university account.
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Jackson controlled it, and the bank listed his home as the address of record.
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Another group of renters revealed a second account called Gym Rentals of Lorton.
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Jackson had listed himself as the sole owner of this business account and estimated annual sales of approximately $134,000.
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He tried to make the account appear legitimate by giving the bank documents tied to an unrelated corporation, Lorton Athletic and Faculty Foundation Incorporated.
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which was never an active entity affiliated with the university.
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Altogether, Jackson had redirected $590,000 in payments intended for the university into three bank accounts that he personally controlled.
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He used the money for his mortgage, personal credit cards, daycare, landscaping,
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utilities, dry cleaning, roofing projects, department store purchases, and gifts for his wife.
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Part 4, the final buzzer.
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Once Parker had assembled the renter's confirmations, bank records, and payment documentation, she briefed senior university officials.
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They decided the evidence supported a criminal case,
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whether Jackson confessed or not, and coordinated with campus police.
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When confronted, Jackson broke down and admitted using the funds for personal expenses.
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Investigators obtained an arrest warrant and Lorton terminated his employment.
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Jackson later pleaded guilty to theft and misapplication of university funds.
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He was sentenced to six months of house arrest
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and the university recovered restitution through its insurance.
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You've been listening to all things internal audit fraud, featuring fictionalized accounts inspired by actual events and brought to you by the Institute of Internal Auditors.
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IIA members can find the full story in this month's issue of Internal Auditor Magazine, along with bonus materials and lessons learned.
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Visit internalauditor.theia.org to read more.
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For additional fraud resources, including guidance and thought leadership from the IIA and the ACFE, visit theiia.org/fraudresources.
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Thanks for listening.
October 13, 2026
