The Portola Valley Schools Foundation, a major donor to the Portola Valley School District and recently defrauded of $182,500 from its investment account, is insured to cover such losses, a foundation executive said.
The foundation should have a full recovery without an impact on the funding for the school district, co-president Randy Von Feldt told the Almanac. "We do have insurance and our account also has fraud protection," he said. "It's clearly a case of identity theft and fraud that any organization could be a victim of. … I'm confident that we'll get to recovery and be able to move forward and learn from the experience."
The irregularities in the foundation's accounts turned up during a reconciliation of the books in November, a monthly routine during the annual fall fundraising campaign, Mr. Von Feldt said. A series of false checks, written between early September and early November 2013, transferred money from the foundation's Charles Schwab account into a JP Morgan Chase account at an unknown location, deputies from the San Mateo County Sheriff's Office said.
The checks were pre-printed with the foundation's name misspelled and without the foundation's address, but did include the correct account and routing numbers on the bottom of the checks, deputies said. The check numbers were "significantly out of sequence," Mr. Von Feldt said.
Checks for between $15,000 and $20,000 were written out to "Eye For Design LLC" with a mailing address in Monroe, Connecticut. When asked whether checks for such amounts needed counter-signatures from foundation executives, Mr. Von Feldt said that the counterfeiters appear to have forged legitimate-looking signatures of two foundation members.
The foundation's past annual donations to the Portola Valley School District have ranged from $800,000 to $1.2 million.
Since learning of the situation, the foundation has informed its donors, Mr. Von Feldt said. A few have expressed surprise about the foundation's vulnerability to identity theft and fraud, he said.
The foundation is staffed by volunteers with one paid employee to manage the database of donor names, Mr. Von Feldt said.
Investigators from Charles Schwab and the U.S. Postal Police are working on the case, deputies said. Investment management firm BNY Mellon, based in New York City, has joined the investigation, Mr. Von Feldt said.