$ 320,000 Brian Burkeen Tire Fraud:  A Look Back

Brian Burkeen kisses his wife, Ginger, during a break before sentencing.

Two years and a month ago, July 16, 2020, Brian Burkeen, the former assistant chief of Indian River County’s Emergency Department was convicted of stealing more than 1,400 tires; sentenced to 12 years in prison.  His scam began in January 2012, he retired on February 9, 2018, was arrested on March 16 and an internal audit was requested the next month, on March 27, 2018. 

Here is a look back on what happened.  It all comes down to “lack of oversight coupled with unfettered trust by his superior.”

Six years after the fraud began in January, 2012, on March 27, 2018, Jeffrey R. Smith, Indian River County Clerk of the Circuit Court and Comptroller, requested the Internal Audit Director to conduct an audit of the Emergency Services Department’s alleged tire thefts.  John King was the Chief of the Emergency Services Department.

The following content is extracted from the “Internal Audit” by the Indian River County Clerk of the Circuit Court and Comptroller dated May 31, 2018.  The content was obtained through a public records request.  Edward Halsey, Internal Audit Director performed the audit.

From 2012 – 2018 Mr. Burkeen stole 1,469 tires.

Year                  Amount                 # Tires

2012               1,402.48                        12

2013               1,259.76                          6

2014               2,766.96                        12

2015             12,031.82                        54

2016            66,930.32                      338

2017          133,562.61                     573

2018          101,573.97                      474

Total          319,527.92                   1,469

As per the Internal Audit:

The Arrest Warrant, Clerk Case No: 2018CF406, dated March 26, 2018, Indian River County, Florida, State of Florida vs. Brian S. Burkeen cites six counts, the first count of which is first degree grand theft (over $100,000) involving tires.  The remaining five counts were for dealing with stolen property, … were dropped.

According to the Institute of Internal Auditors glossary, fraud is “any illegal act characterized by deceit, concealment or violation of trust…” 

The fraud triangle has three sides: pressure or incentive, opportunity, and rationalization.  This report delves into the opportunity side of the fraud triangle. Opportunity is the ability to commit the fraud.  In this situation. it appears there was principally one factor that enabled a member of senior management, Brian Burkeen, to circumvent established controls.   That factor was a total lack of oversight coupled with unfettered trust by his superior (emphasis added).

Included in the total is the $27,402.05 worth of invoices for tires that have yet to be paid for by the County but were picked up by Mr. Burkeen prior to his retirement and charged to the County. The County Administrator has denied payment for these invoices. 

From the time-period of January 2012 thru February 2018, invoices for tires which did not have installation charges were deemed to be tires paid for by the County but never used for County purposes.

The Goodyear Store Manager stated that he questioned Mr. Burkeen on why he was purchasing and picking up so many tires.  Mr. Burkeen’s response to the Store Manager was that the County had a policy of replacing for free any citizen’s tires damaged as a result of potholes on county roadways and that is why he needed so many tires. There is no such policy.

Brian Burkeen wrote on many of the tire invoices being processed for payment, false notations such as “stock” or various vehicle numbers for tires which do not match any fleet vehicle. These notations were an attempt to cover alleged thefts and circumvent internal control procedures. 

Segregation of duties is the concept of having more than one person complete a task. The segregation of duties is an internal control intended to prevent fraud. 

There are generally four areas for adequate segregation of duties authorization function, documentation function, custody of asset, and reconciliation or audit. There has always been a policy for segregation of duties for countywide purchases. The tire theft matter is a textbook case of a total lack of compliance with an established practice of segregation of duties.   Brian Burkeen took on three types of duties: authorizing the tire purchases, the documentation function, and custody of assets. 

Nonexistent was the reconciliation by an independent third party such as an equipment mechanic.

The tire invoices were processed for payment without a receiving report signed off by the Emergency Services Department equipment mechanics. The absence of the sign off from the equipment mechanics created opportunity for fraud. The equipment mechanics never received the tires.

[On May 19, 2015, Mr. Burkeen received a Proclamation from the Indian River County Commissioners designating the week of May 17 – 23, 2015 as Emergency Medical Services week. Commissioner Zorc read and presented the Proclamation to Assistant Fire Chief Brian Burkeen.] 

On June 17, 2016, and again on June 29, 2016, former Finance Director Diane Bernardo contacted by email the Emergency Services Director John King to question and make recommendations about the issue of signing off on invoices. The emails were not about tire purchases. Diane Bernardo stated “Right now Jennifer (Staff Assistant) is signing off along with you. I would like to propose Don Jones (Mechanic) sign off on the car parts so he can verify the parts are being used and then forward the invoice to Jennifer for coding.” No changes were made by the department based on the recommendations.

Tire invoices were processed for payment without a receiving report signed off by the Emergency Services Department equipment mechanics. The absence of the sign off from the equipment mechanics created opportunity for fraud. The equipment mechanics never received the tires.

On August 30, 2017, Finance Director Elissa Nagy contacted by email John King requesting information on how receipt of items is verified at the Emergency Services Department. The request was not related to an invoice. The purpose was to question and make recommendations. John King forwarded the email to Brian Burkeen. Mrs. Nagy and Senior Accountant Raeanne Cone had a conference call with Mr. Burkeen to discuss this issue. Recommendations were made to have additional staff verify receipt of goods by signing off on invoices. Mr. Burkeen’s response was that he would take care of it. No changes were made by the department based on the recommendations.

The Staff Assistant Jennifer Pridgeon did not bring to Director King’s attention the high volume of tire purchases even though she confronted Brian Burkeen about the matter. She stated that she reported directly to Brian Burkeen not to John King and adhered to an established chain of command existing in the Emergency Services Department.

Brian Burkeen made diesel fuel purchases since January 2012 in the amount of $12,038.50 or 4,428.65 gallons with a county fuel credit card. Upon further investigation, it was discovered that it would be an extremely rare occurrence when an emergency truck or ambulance would need as much diesel fuel at one time as Mr. Burkeen purchased.

In addition, it has been determined that each Emergency Services vehicle in the fleet is assigned a gas card that stays with that vehicle. There would be no reason for Mr. Burkeen to use the card assigned to his vehicle to fill up another vehicle in the fleet instead of the card assigned to that vehicle. It is suspected that these diesel fuel purchases were actually for personal rather than for work related use.

In a meeting with Emergency Services Department staff, it was learned that shipments are dropped off at the Emergency Operations Center warehouse whether or not an employee is present to receive the shipment.

In summary, the estimate of the overall alleged theft loss is $332,077.79 made up of the following:

Tires — Paid                        $ 292,125.87

Tires — Unpaid                         27,402.05

Diesel Fuel                                12,038.50

Automotive Parts                           511.37

Total                                     $ 332,077.79

Emergency Services Chief John King

Fire Chief John King reported to the County Administrator. The County Administrator reports to the Board of the Indian River County.  While elected by the taxpayers, The Board ultimately reports to the Governor.  

From 2012, when the fraud began until June 2016 when he retired, Joseph Baird was County Administrator.  During that period roughly 150+ tires were stolen. Lack of oversight coupled with unfettered trust by his superior.

Former IRC Administrator Joe Baird

Indian River County Administrator Joe Baird was charged with driving under the influence in May, 2009.  According to the Indian River County Sheriff’s Office website, Baird, 51, was booked into jail at 10:27 p.m., according to jail personnel.  He was released on $ 500. bail.

Prosecutors say there was no mistaking it, county administrator Joe Baird was drunk that night when police stopped him, so drunk in fact an officer testified he could smell it on Baird’s breath from six  feet away.

“His eyes were glassy, the way he spoke to me, his speech didn’t seem normal,” Vero Beach Police Lt. Matt Harrelson said.

The officer testified Baird seemed unsteady on his feet, and his balance wasn’t very good.

And the dashcam video shows Baird had difficulty with all five  roadside sobriety tests, at times losing his balance and finding it impossible to correctly count backwards. In fact the police officer says Baird did so badly on the test, he quote ” slaughtered it.”

The Vero Beach Police Department served an arrest warrant [stalking] for former Indian River County Administrator Joseph Baird on Tuesday, June 28, 2022.

[According to TCPalm, “It was a swan song for County Administrator Joe Baird Wednesday, February 10, 2016 as he addressed the Taxpayers Association of Indian River County for the last time.

Baird, who will retire on June 30, was greeted with a standing ovation from the group, which twice awarded him its annual ‘miser of the year’ award for his fiscally-conservative practices as county administrator.”]

According to Vero News.com, “After having served the community for 35 years, Indian River County Administrator Joe Baird bid farewell to staff, co-workers and members of the community who all wished him well at a retirement party…Bob Solari started things off noting that despite Baird’s reputation as a stern manager, it was clear that his staff enjoyed working with him and respected his dedication toward keeping the county budget streamlined and in the black.”

Retirement party with incoming and outgoing county administrators Jason Brown and Joe Baird with then-County Commissioners Bob Solari and Wesley Davis.

On June 29, 2016 Baird received an official proclamation regarding his upcoming retirement from Rep. Debbie Mayfield at the June 21 County Commission meeting.

Jason Brown, county administrator for Indian River County speaks outside of the Indian River County Administration Building during a press conference addressing COVID-19 in the county.[Kaila Jones/32963]

In July 2016, upon Mr. Baird’s retirement, Jason Brown became County Administrator. Prorating 1/2 2016 to 2018 until he was arrested, Mr. Burkeen had a few good years, stealing roughly 1,216 tires and embezzling $ 268,550 under the administration of Jason Brown. Lack of oversight coupled with unfettered trust by his superior.

County administrator Jason E. Brown released the following statement regarding Burkeen’s arrest: 

Upon learning of possible wrongdoing, a report was filed with the Indian River County Sheriff’s Office who initiated an investigation.  We continue to work closely with law enforcement officials.

We met with the Clerk of the Court and Comptroller, Jeff Smith.  His internal auditor is conducting a full review, and we have talked with the external/independent auditors who have been advised of the investigation.  

The allegations against someone we have worked with for many years are very upsetting.  Because this is an ongoing investigation, we are unable to provide further comment, other than to say we are extremely saddened and disappointed.

But during the entire timeframe of the fraud Mr. Burkeen with crimes, no other County employees were charged or determined to be involved based upon the investigation,” Brown said when asked if any employees have been disciplined for buying tires from Burkeen.

Further, “His actions hurt the fire department and county overall. He created a morale problem. He stole from all 160,000 taxpayers in Indian River County,” Brown said. “We fell behind on replacing ambulances and fire trucks because we didn’t have the funds to do so. The (stolen money) could’ve been used to purchase an additional ambulance.”

But later according to Indian River County Attorney, Dylan Reingold, Esq., there was no need to purchase new ambulances and firs trucks because the loss was covered by insurance.

Regarding no other County employees being charged or determined to be involved based upon the investigation, we raised the question with Attorney Reingold if the concept of Respondeat Superior had been considered in connection with the fraud.  (We are not attorneys; just courageous in gathering information.)

Respondeat superior is a legal doctrine which states that, in many circumstances, an employer is responsible for the actions of employees performed within the course of their employment. This rule is also called the “Master-Servant Rule,” recognized in both common law and civil law jurisdictions. In a broader scope, respondeat superior is based upon the concept of vicarious liability.

According to an email from Attorney Dylan Reingold on May 9, 2022, Mon, May 9, 12:45 PM,

“I just do not recall where the issue was internally raised.”

The Government Finance Officers Association of the United States and Canada (GFOA) presented a Distinguished Budget Presentation Award to Indian River County, Florida for its annual budget for the fiscal year beginning October 1, 2020. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as a financial plan, as an operations guide, and as a communications device.

Question: The Emergency Services operating budget for 2016/2017 was $ 424,447. At a normal budget review meeting for YTD or some such measurement, wouldn’t you notice $ 133,000 in missing cash?

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