3 Secrets to Avoid Joining 1,100 Youth League Managers Jailed for Theft

Youth sports leagues are an $11 billion business.  And stealing from our leagues has become an epidemic.  Want proof?  Google search “youth sports financial theft.” You’ll get about 6,130,000 results.   Go to NYTimes.com and search for reporter Bill Pennington’s brilliant 3-article series this July on the youth league theft epidemic.

Or travel to Dakota County (MN) and see County Attorney James Backstrom.  He will tell you that between 2009 and 2014, his office has prosecuted six youth sports financial embezzlement, fraud and theft cases.  Most recently, he tried Rosemount Area Athletic Association finance manager Robert Reischauer who stole $113,000.

Go to a parent of the 300 football players and cheerleaders in the Vista, California Pop Warner and ask about Rachel Marie Owens.  Hear how, in 2015, the cheerleaders had to borrow money to attend a championship because Owens, the volunteer treasurer and a local math teacher, stole $100,000.

Or ask a parent in the Diablo Valley Football Conference (California) about their 64 year old treasurer Lynwood Peyton who in April 2016 was arrested for stealing $200,000.

Or a parent in the Pentucket (Massachusetts) youth football league about 54 year old treasurer James Potenza who stole $80,000.

Or a member of the Appleton (Wisconsin) youth baseball league about 41 year old trustee Rodney K. Schreiber Jr., who stole $14,000 to feed his gambling addiction by using the league’s ATM card at a casino.

All these are among the 1,100 or so youth league officials who have gone to jail for theft since 2009. Know how many of the 100+ governing bodies in the top 21 team sports can say that their members have never experienced a financial theft or fraud?  Answer: Zero.

The most common answer to why people steal from youth leagues?  Because it’s too easy. 

Most thefts happen via one of three methods:  i) stealing registration fee cash or checks, ii) unauthorized use of an ATM card, or iii) writing of checks on league accounts that only require one signer.   The good news?  You can immediately do three things to help theft-proof your league.

Step 1, if you now take cash and checks for registration fees, stop.  Use an online League Management System (or LMS) for electronic registrations.  To pick one, check out our feature on page 40 ranking the LN Top Ten LMS systems.  Ask the trustees of any league who have replaced cash and checks with an all-online registration system how much their receipts increased year-over-year.  The most common answer is 5% to 7%, which more than covers the cost of the LMS.

Step 2, cancel all league ATM cards.  Or if you really do need an ATM card, set one up at a bank other than your primary bank, or buy prepaid cards, and only fund the card with $500 at a time.

Step 3, require two signatures on checks over a certain amount, usually $50 or $100.

The theft epidemic also has volunteers and sponsors freaked out about backing youth leagues.  The antidote?  Transparency.  Go to a website called Guidestar, one of the major charity watchdogs that tracks nonprofits.  Sign up for free to access the 990 form, your non-profit’s tax form.  Go to “Advanced search.”  Put in your league’s name, or your league’s governing authority, Little League or Pop Warner or PAL, plus city and the state.  Click on 990 to find your league.   Lots to see here, including number of kids participating, revenues, expenses.  Make the link to your league’s 990 available online, or forward it to people you are recruiting as proof that your league’s finances are well-managed.

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