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Michigan Cracking Down on Youth Sports Business Crimes

4 Nov, 2015

By: Tracey Schelmetic

Sad but true: when a market becomes lucrative, it’s susceptible to corruption. And youth sports is no different, as a number of developments have proven.

News stories of felony arrests for embezzlement of youth sports funds are on the rise, and investigators say youth sports clubs and teams need to put more safeguards in place to ensure that one person isn’t mismanaging (or misappropriating) the funds. Often, youth sports groups have little oversight in place to ensure that money is being accounted for correctly, according to the Michigan Gaming Control Board, which oversees non-profit sports money management in that state.

This year alone, the Michigan Gaming Control Board arrested a 51-year-old youth baseball charity coach for allegedly embezzling $20,000 from his team’s funds, and a 25-year-old cheer coach at Farmington High for bilking her team’s fund for about $9,000. A 44-year-old woman was charged last month with embezzlement and writing bad checks in her position as treasurer for the Westland Hockey Association For some youth sports coaches and managers, the prospect of easy money is simply too tempting.

"Some people we find to just have larceny in their heart," Michigan Gaming Control Board Executive Director Richard Kalm told ABC affiliate WXYZ in a recent interview. Kalm and a team of trained investigators are cracking down on sports charity gaming fraudsters in Michigan.

"We have put a lot of new rules in place at various events," said Kalm. "We explain to various charities and organizations what safeguards have to be in place and if they choose not to we shut them down."

Too often, said Kalm, youth sports group treasurers are “all powerful,” and may control all accounts as well as access to details of the accounts. The way to prevent it, he said, is to spread the money management duties over several responsible people who can engage in checks and balances on one another. Youth teams should build some oversight and accountability procedures into their money handling practices, and ensure that there is transparency into how funds are managed.

Kalm and his team appear to be doing a great job: there has been a flurry of arrests of treasurers and coaches charged with misappropriating team funds in youth sports across Michigan. Arrests in other states are becoming more common, as well. In July, a Framingham, Massachusetts man was accused of stealing more than $200,000 from a youth soccer league, and the former treasurer of a New Jersey youth baseball league admitted to embezzling more than $100,000.

It seems clear that more states need to follow Michigan’s example and form a taskforce to root out widespread cases of youth sports embezzlement. In the absence of professional investigators, however, it’s up to parents to ensure that the money they’re shelling out for their kids’ sports activities is being used properly.

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