L.A. Unified moves to close charter school over alleged misuse of $2.7 million

Los Angeles schools Supt. Ramon C. Cortines has moved to shut down a San Fernando Valley charter school over the alleged theft or misuse of as much as $2.7 million by the school's founding principal. The problems at NEW Academy Canoga Park turned up in an audit released Monday by the inspector general's office of the Los Angeles Unified School District.More than "$2 million of misappropriated and unaccounted public funds is egregious," Cortines wrote in a letter to the board of the school. "Students have been inexcusably deprived of funds that were designated solely to further their education."As a charter school, NEW Academy is governed by its own board of directors, independent of L.A. Unified, which authorized the school. Los Angeles has more charters, public schools that are independently run, than any school district in the nation.Virtually no local charter schools have been forcibly shut down by the district, although several have closed after officials failed to renew an expiring charter agreement, which typically lasts three to five years.The elementary school of about 500 students faces a charter revocation hearing. The chairwoman of the school's board contends that NEW Academy should survive because students are thriving.Although the school's scores are still in the lowest 30% of schools statewide, according to last year's data, its students' gains on standardized tests have been among the region's strongest each of the last three years."It is clear that our school has been a victim of fraud," board chair Maggie Cervantes said in a statement. "The school is taking aggressive and necessary steps to recover its assets and work to successfully resolve this issue. These steps have included terminating the employment of the former principal of the school."The former principal, Edward Fiszer, could not be reached for comment. Although not identified by name in the published audit, Fiszer was the target of the inquiry, officials confirmed.NEW Academy Canoga Park opened in 2005 as an unusual example of public-private collaboration using school bonds and other funding sources to combine a new school with low-income housing.The school's visible face, Fiszer, the author of three education and motivational books, was once honored as a "Champion of Children" in a City Hall ceremony.Among the auditors' findings is that Fiszer allegedly withdrew cashier's checks totaling nearly $1.1 million from school accounts between July 1, 2007, and Sept. 30, 2009."The former principal claimed that funds deposited into his personal Ameritrade account were not withdrawn, but were deposited and repeatedly lost," the auditors wrote, apparently as a result of unsuccessful investments.One cost questioned by auditors was $62,247 paid to a company called Burgundy Bunny for science enrichment for fourth- and fifth-graders over a six-week period. "We performed an Internet search to verify the validity of the vendor," auditors wrote. "We noted that the address and phone number were invalid. The address shows as a vacant lot. In addition, the business entity name does not exist."Auditors also allege that the principal paid a former teacher — who at some point married the principal — $129,450 for services as a grant writer, although a company was already being paid for grant writing.The audit included a harsh assessment of the oversight by the charter's governing board and the outside company that provided accounting services.Handling the audit became complicated because the school system's interim inspector general is a member of the board of directors of the charter's founding organization. Jess Womack is board secretary of New Economics for Women, whose acronym, NEW, is part of the school's name. Womack, a retired L.A. Unified attorney, recently rejoined the school system as inspector general. Womack recused himself from dealing with this audit, district officials confirmed. The charter has a board of directors separate from New Economics, but there's overlap: Cervantes is executive director of New Economics and Loyola Marymount University Assistant Dean Marta Sanchez serves on both boards. A second NEW Academy operates near downtown. The Los Angeles County district attorney's office said it hasn't yet received the audit for review for potential prosecution.The school becomes the second San Fernando Valley charter school facing allegations of impropriety. The founders of Ivy Academia face felony charges related to co-mingling private and public accounts. They have denied wrongdoing.

Former PTO officer in West Virginia now faces charges

The former vice president of a school's parent-teacher organization is charged with credit card fraud, identity theft and embezzling money from the PTO. According to a complaint filed in Kanawha County Magistrate Court on Monday, Sarah Elizabeth Harless, 33, of Elkview, allegedly took more than $13,000 from the Pinch Elementary PTO's accounts.Harless was arrested and released Aug. 16 on $1,000 bond. She was charged with one count of embezzlement, four counts of credit card fraud and two counts of identity theft.
Though Harless was elected vice president of the organization, she took over as treasurer around Nov. 1 after elected treasurer Polly Stuart could not maintain her duties due to "personal reasons," the complaint said."I think she just had a lot of things on her plate," Pinch Elementary Principal Elizabeth Moore said of Stuart.According to the complaint, Harless then served as treasurer until mid-April, when members discovered she had embezzled money from its Chase Bank and United Bank accounts. Harless also used the PTO's CitiBusiness account to make "fraudulent purchases for her personal benefit." Harless used her issued card and then-PTO president Kristi Rhule's card to make more than $8,000 in purchases, according to the complaint.The complaint states the vice president also opened a fraudulent business account with Capital One on behalf of Stuart and the Pinch PTO without anyone's permission. She used this credit card to make more than $900 in fraudulent personal purchases, the complaint said.Harless admitted in May to using money from the United Bank, Chase Bank and CitiBusiness accounts to make personal purchases, including paying her utility.She said she used the CitiBusiness card in January, the complaint said, and used funds from the United Bank account to make payments on the CitiBusiness card.Harless also admitted she failed to pay several vendors that had provided services to the Pinch PTO and verified she opened the Capital One account and used it for personal purchases, the complaint said.Moore said she couldn't comment on the embezzlement charges because the Kanawha Sheriff's Department is still investigating. "We've been working with the law enforcement with this and will continue to work with them," she said.Kristi Rhule, who served as PTO president at the time of the alleged embezzlement, said she hopes the case against Harless doesn't affect the high level of community involvement Pinch Elementary has, or deter parents from supporting the organization in the future.Harless has not worked with the PTO since approximately April 15, she said."As a nonprofit organization, every penny counts, so when embezzlement occurs it makes for a tough time," she said.

Former Virginia Baptist Church Worker Charged with Embezzlement

The former financial administrator of a Virginia Baptist congregation has been arrested on charges that she embezzled nearly $300,000 in church funds over the course of more than six years. Police say Michele M. Roberts, 61, stole $287,678 from King's Grant Baptist Church in Virginia Beach, Va., between October 2004 and March of this year. Though not a member of the church, Roberts worked 12 years as financial administrator before resigning in May with the explanation that it was time to move on to the next phase of her life. King's Grant Pastor Skip Wallace said Roberts knew the congregation's system and hid her trail well. Nobody had any idea the money was missing until the new financial administrator happened upon it three weeks ago. "We were trying to find out where we could do a better job of stewardship, and she found some irregularities in our books," he said. Church leaders reported the alleged theft to the economic-crimes unit of the Virginia Beach Police Department Aug. 4. Roberts was arrested Aug. 9 in Fredericksburg, Va., and transported to the Virginia Beach Correctional Center, where she was held without bond. As financial administrator, Roberts handled duties including payroll, accounts receivable and accounts payable. Bank statements indicate she made checks payable to herself and provided false financial statements to the church treasurer. Wallace said members of the church who know Roberts well are still in shock. Due to her long tenure, she had a high trust level with church leaders, including Wallace, who worked for four years as the church's minister of education before assuming the pastor position in 2007. Organized in 1965, the 550-member church is affiliated with the Norfolk Baptist Association, Baptist General Association of Virginia, the state and national Cooperative Baptist Fellowship and the Southern Baptist Convention. "This is a great congregation and we believe that we will be stronger as a result of this," Wallace said. He cited Romans 8:28, which in the Holman Christian Standard Bible says: "We know that all things work together for the good of those who love God: those who are called according to His purpose."

Mt. Holly, North Carolina Church looks to move on after embezzlement scandal

Mount Holly's Way of the Cross Baptist Church held its first Sunday service this weekend since the former members accused of embezzling hundreds of thousands of dollars appeared in court."It's about like starting all over. God's given us a new beginning," Way of the Cross pastor, the Rev. Bobby Meeks, said.The church’s former treasurer and secretary, Alan and Linda Roland, appeared in a Gaston County courtroom last week. Over the years, detectives say they embezzled more than $360,000 from the church bank account."We found out we didn't have but $1,700, and it was a shock to all of us," said Meeks.Church leaders had very little to say about the case Sunday except that the focus was on the worship service, one in which Meeks talked about forgiveness."I talked to them and just said, ‘just try to love each other and bring unity back in the church,’" he said.Meeks says his congregation is already in the process of replenishing the money that was taken. He says the ladies of the church raised more than $2,000 through several yard sales and they plan to hold other fundraisers to restore the church account.

Bishop: No one took money from church accounts in Biloxi, Mississippi

The leader of the Biloxi Catholic Diocese said Thursday there's no truth to rumors that a local pastor embezzled church funds.Bishop Roger Morin recently met with some members of the Vietnamese Martyrs Catholic Church who have been very outspoken about their concerns. They claim Father James Chau Pham moved hundreds of thousands of dollars in church money to secret accounts, and stopped giving quarterly financial reports.On Thursday, Bishop Morin issued the following statement: "While there had not been a clear understanding of existing directives and there have been some mistakes made due to unacceptable procedures, it does not appear that anyone intended to divert funds for personal use. While the pastor was not provided all of the information concerning funds on deposit in various bank accounts, no one took money from the church accounts. There is no proof of theft by embezzlement or otherwise."Bishop Morin said all of the parish's funds are now kept in accounts held in the name of Vietnamese Martyrs Church. And that Father Pham is the authorized signatory on all existing accounts.In May, parishioners marched in protest in front of the church wearing shirts that read "Hear Our Cries." The protest was even covered by the Saigon Broadcasting Television Network, which broadcasts Vietnamese language television and radio programming throughout the U.S. and Canada.

Police search home of pastor whose church was set on fire in Vinton, Virginia

e pastor of a Vinton church who police suspect set fire to his church last year may have been trying to cover up an embezzlement, according to a search warrant filed Thursday.No one has been charged in the March 10, 2009, arson that caused $100,000 in damage to New Beginning Baptist Church in the 600 block of Vale Avenue Northeast. The pastor, the Rev. Tony Eugene St. Clair, was found lying injured outside the church and smelled strongly of gasoline, according to a search warrant filed last year. A Virginia State Police investigator wrote in a search warrant filed Thursday in Roanoke Circuit Court that a financial ledger that St. Clair gave to police is incomplete. Several check stubs are whited-out, the search warrant said, and other stubs have no writing on them to show the purpose or amount of the check or to whom the check was written. And records of deposits and the account balance is incomplete, the search warrant said."One motive for the fire would be an attempt to cover up embezzlement of funds from the church," the search warrant said.Tony St. Clair's wife, Kathleen St. Clair, was the church's treasurer when the fire happened and remains in that position, according to the document.State police officers and at least one investigator with the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives searched the St. Clairs' Southeast Roanoke house on Thursday afternoon. They were looking for credit cards, bank statements, checks, receipts, invoices, cellphones, computers and more, according to the search warrant. It was unclear what they seized.The St. Clairs stood outside the one-story house with two state police officers. Tony St. Clair walked to the back of the house without commenting when a reporter approached.State police Sgt. Frank Parries said the St. Clairs told him they did not want to be interviewed.No one affiliated with the church could be reached Thursday. A neighbor said last year that the congregation was small, with just six or seven cars parked in the lot for Sunday services.

Lebanon, Oregon woman indicted on embezzlement charges

A Linn County grand jury has indicted Molly Louise Marteney of Lebanon on multiple embezzlement charges that are alleged to have occurred while she worked at the First Assembly of God in Lebanon.Marteney’s indictment lists 10 charges but does not indicate how much money was allegedly stolen, saying only that it exceeds $10,000.The indictment refers to a “theft of an equity line of credit secured by deed of trust” from property belonging to the church, at Seventh Avenue and West Oak Street.Interim Pastor Ted Boatsman said this morning, “One’s never prepared for something like this, and sometimes it comes from the person you would least expect.”He said Marteney has had a number of jobs at the church over the last 15 years, including treasurer and bookkeeper. She also is a church member.Boatsman said the church is cooperating with the investigation and has opened all of its records to authorities.The offenses are alleged to have occurred during seven time periods starting on April 24, 2006, and concluding on March 3, 2009.he charges are: three counts of first-degree aggravated theft; three counts of misapplication of entrusted funds; three counts of falsifying business records; and one count of first-degree forgery.The theft and forgery charges are felonies, and the remaining ones are misdemeanors.Marteney, 60, was indicted on July 22, and a warrant was issued for her arrest. She was booked at the Linn County Jail last Thursday afternoon and was released after posting a security amount of $5,000.She is scheduled to be arraigned at 1:15 p.m. Wednesday, Aug. 18, in Linn County Circuit Court. The Department of Justice did the investigation involving a possible mortgage fraud,” said District Attorney Jason Carlile. “The DOJ will be the special prosecutors in the case.” Marteney has hired Forrest Reid of Albany to represent her.He said Monday, “I’ve met with her for quite some time now, but I was just retained this morning. We were discussing the situation prior to today because she didn’t know if she would be charged or not.”

Bemidji, Minnesota woman charged with church embezzlement

A 45-year-old rural Bemidji woman has been charged in Beltrami County District Court with felony theft by swindle of more than $107,000 from First Presbyterian Church in Bemidji.Her next court appearance is scheduled for Tuesday, Aug. 10.According to the criminal complaint:
Eileen Mary Branch worked for First Presbyterian Church for more than three years. Among her duties were processing and payment of bills owed by the church through the church’s checking account at First National Bank Bemidji.In late 2008, Branch allegedly began embezzling church funds. Canceled checks were no longer returned to the church with the monthly checking account statement issued by the bank. Branch would write out checks to herself or to pay her own bills. She would enter the name of a trades person, supplier or government entity in the church’s check register as the payee for the check, which she had made out to herself. When the monthly bank statement was sent to the church, Branch would alter it to correspond to the payees she had falsely noted on the check register.For example, Branch wrote checks to federal and state revenue authorities as employment taxes on salaries paid to church employees, but would then make those checks payable to herself.Branch’s alleged embezzlement continued throughout 2009 and into 2010. Her scheme was detected when legitimate creditors of the church, such as plumbing contractors, began complaining to church officers that they hadn’t been paid for the work they performed months earlier for the church.A church officer went to First National Bank to examine microfilm copies of the church’s checks. Checks noted as payable to the church’s legitimate creditors had been made out to Branch and cashed by her.Bemidji Police investigators located Branch who, according to the complaint, said she had stolen the money to pay off personal and family debts.

Pilferers prey on the faithful. Too much trust makes church embezzlement common

Delaware worshippers often speak of going to church to become better people, but this spring Christians got a wholly unexpected lesson in lying and theft.In May, at St. John's Methodist Church in Seaford, secretary Penny L. Kimbrough was arrested and charged with unlawfully writing checks to herself and getting a credit card by using the church's name.That same month at Christ Church Christiana Hundred, Shannon G. Tuso, an administrative assistant, was arrested for taking money from the Greenville Episcopal church, after being convicted of embezzling from a bank three years earlier.And at First Presbyterian Church of Newark, there is ongoing frustration over Carol H. Lind, a former administrator, treasurer and a respected choir member. She pleaded guilty to theft in a plea bargain in July 2009, but her restitution hearing has yet to be held in Superior Court.As a result, some members of the church have difficulties moving on, not knowing if the congregation will receive any of the missing $60,095 revealed in a forensic audit, said the Rev. Steve Brundage, the pastor.People have been hoping for "a public accounting of what, if anything, she will repay," he said. "My judgment is some people need that to get to forgiveness."The issue of church embezzlement extends beyond Delaware and is so pervasive that one management expert fears it could be the next big scandal in America's churches."The issue needs the attention of churches," said Charles Zech, director of Villanova University's center for the study of church management. "They're so trusting, they fail to put in business protections that keep them from being taken advantage of."A Villanova survey of Catholic dioceses in 2006 found that financial officers were almost as worried about parish fraud as suits over sexual abuse."We found an enormous amount of concern by those who watch over church funds," Zech said. On a question about embezzlement, 85 percent of responding churches said they had been victimized.But it's not just churches that need accounting protection. In Delaware, bonds of trust have been broken because of embezzlements across all strata of society -- banks, government, supermarkets, volunteer fire companies, law firms, beauty salons and churches.It's a crime of opportunity by people who present themselves as the best folks in the world, then take advantage of the trust they have earned, said U.S. Attorney David Weiss. With access to finances and little oversight, they begin to help themselves to money because of greed, addiction or financial pressures. Take Bernard Nowakowski. He slipped a check into his pocket as he left work one day at United Electric Supply near New Castle and was able to cash it. That led him to take more as he needed it to feed his gambling addiction. After nine years and 350 stolen checks, he'd taken $500,000.
When he was caught, he said he was relieved and sobbed in court, apologizing "for all the hurt I've caused."
FBI crime statistics show that Delaware has one of the highest per-capita rates of embezzlement.For instance, there were 291 reported embezzlements in Delaware in 2007 when the state had a population of 864,764, according to the FBI. In California, a state whose population is 42 times that of Delaware, there were 2,333 similar crimes that year. I am unaware of anything unique to Delaware that makes us more susceptible to this type of crime," said Weiss. But without question, embezzlement is a "substantial problem" in Delaware, he said. In recent months, some high-profile embezzlements were resolved in Delaware:
• William Hitch, head of finance, stealing $151,000 from the Laurel School District
• Stephen Sassi, an accountant, stealing $1.5 million from two doctor clients
   Wendy Davis, a bookkeeper, stealing $170,000 from a law firm where she had worked for 24 years
   Cynthia Declet, a business manager, taking $287,744 from a small computer consulting business.
Sentences in these cases ranged from probation for Hitch to three years in prison for Sassi.
And while the courts do their best to see money is repaid, full restitution is rare, Weiss said.
Usually, the money is spent on luxury items -- like trips, meals or hotel stays -- or addictions such as gambling and drugs, Weiss said.
Nowakowski, who worked at United Electric Supply, plowed the $500,000 he stole into slot machines in Atlantic City, Dover Downs and Delaware Park, sometimes playing 24 hours a day
Now, four years after his conviction and two years after he left prison, Nowakowski sends the company a $100 check every month.
Frankly, it would take an eternity to pay off [what he owes] completely," said Gene Bruni, company president.People attending the nation's 300,000 churches are among the most vulnerable.
They come to meet good people, not to wonder who's going to rip them off after worship, said Chris Falkenberg, a former Secret Service agent who runs the private firm, Insite Security.In this setting, people let down their guard believing they are among holy and consecrated folks, said the Rev. Doug Gerdts, senior pastor of First & Central Presbyterian Church and treasurer of his denomination's regional governing body, New Castle Presbytery."We also have some unbelievably pathetic accounting systems and nonexistent controls," Gerdts said. "It's not unusual to have one person in charge of everything and keeping records in their home and reporting to the congregation."  In the vast majority of churches, there is too much trust," said Villanova's Zech. "No one would think a minister or priest or selfless volunteer would embezzle and so they tend not to put in routine financial controls."He said he was surprised by the results of his survey sent to 174 Catholic dioceses that happened to include a question on embezzlement. Among those responding, 85 percent said that they'd had such a theft in the last five years."The Conference of Bishops has provided good guidance on preventing the problem, but not enough dioceses are taking precautions," Zech said.Only three percent of dioceses were conducting an annual audit of parishes, while 21 percent said they never did the audits and 28 percent said they conduct an audit when a priest leaves a parish.If a discrepancy was found, would they prosecute? Zech said he doesn't know, given that one of the worst things a church can do is attract bad publicity.He said it's because of lax oversight that there are scandals like the one involving the Rev. Kevin Gray. He's the Waterbury, Conn., priest charged in July with stealing $1.3 million from Sacred Heart parish over seven years to pay for hotels, meals, clothing and male escorts.In January 2009, there was an arrest in the Diocese of Wilmington.Kenneth Hanbury, a 60-year-old deacon, was charged by Maryland State Police with embezzling more than $30,000 from Our Mother of Sorrows Parish in Centreville, Md., where he was the bookkeeper."Any time you have money, there is going to be temptation, even though there are good people in our parishes," said Bob Krebs, a spokesman for the Diocese of Wilmington.In the diocese, each parish is required to have a financial council for oversight and to advise the pastor. And parish financial statements are reviewed each year at the diocesan level, said Krebs.A diocesan auditor visits a parish every two years to go over the books. That's also done when a pastor leaves a parish. The policy has been in place at least a decade, Krebs said. Zech worries that embezzlements could be the next big crisis for the American Catholic church. In his survey, almost 34 percent of financial officers said their biggest fear was the lack of financial controls at the parish level.Zech hates to say that churches are vulnerable because that "sounds like blaming the victim." Nevertheless, he said, embezzlement is a crime of opportunity and churches should make it harder for people to find that opportunity.No one has to convince the 220 worshippers at Newark's First Presbyterian Church of the need for oversight. The memory of the last three years is too fresh. A certified accounting firm, Wilmington's Jeter & Associates, showed that from January 2007 to December 2008, Carol Lind wrote at least 35 unauthorized checks that made their way to her bank.Lind, now in her 60s, was hired in the early 1990s as an office administrator and apparently did well under supervision, said Tom D. Runnels, a longtime member.We're a loving congregation and that made us casual about our finances," Runnels said.The church had problems finding leadership and went through a period when pastors and interim pastors were there only a few years. During that period, financial oversight waned.
The role of treasurer, which had been a volunteer role, was shifted to Lind. By 2000, she took care of vendor payments, processed payroll, monitored cash accounts, and prepared reports on the financial state of the church.She had control of the checkbook and wrote her own checks.You could say it's a testament to faith that organizations run as badly as ours exist at all," Runnels said.If Lind needed extra money, it wasn't apparent. She drove a Mercedes, owned a home in Chester County, wore suits from Talbot's and the occasional mink.She began to funnel extra paychecks into her accounts as early as January 2007, said David Berkebile, president of the trustees.She covered the theft using a color copier that she'd contracted for at church. When statements from Bank of America and Wilmington Trust came in, she made her own versions using the copier and filled in new balances. (She also kept the original statements neatly stacked in a locked desk.)At first, church leaders did not know what was amiss -- only that it was impossible to get a detailed report for the annual budget meeting in the winter of 2007. Members of the finance committee say they went 14 months without proper accounting."She always said she was working on getting people the records and our interim pastor would back her up, saying she had a lot to do," Runnels said.The theft fully came to light in the fall of 2008, when a church elder was visiting one of the banks and learned that an account, which should have had $60,000, was $10,000 in the red, Gerdts said.Gerdts got involved as treasurer of New Castle Presbytery, offering assistance in paying for a forensic audit. He also noted a reluctance to press charges.
Gerdts said reporting the crime was a way to show the seriousness of the offense, a way to pursue repayment and a way for leaders to rebuild trust with the congregation, given that members felt let down by elders who had let this happen.So the church commissioned a full audit and used it to report her to the Newark police in early 2009. And the slow process of healing began with elders holding a series of meetings in which they admitted their failures. They also developed monetary reforms, Gerdts said.Now a team of three oversees the check writing, five teams of people take turns counting the Sunday collection and another team oversees accounting. There also is an annual report and review of finances for the whole congregation, Brundage said.It didn't hurt that when the embezzlement came to light, the congregation was interviewing a candidate to be pastor. It was Brundage, who had served 30 years in ministry. He said he wasn't scared by the controversy, and came in February 2009."Theology is empty unless we trust that God is with us in the tough times," Brundage said.Initially, the crime's exposure led to a decline in membership and giving, Gerdts said. But the congregation bounced back."They've worked hard to re-establish trust," he said.Today, positions that were previously vacant -- such as a part-time Christian educator and worship leader -- have been filled and the payroll is about where it was when Lind left, because much of the giving has been restored."I think our church is as strong as ever," said Runnels, a member since 1977.But part of the Lind case is frustrating to members of the congregation because it's in legal limbo and because of the lack of media attention.In July 2009, Lind pleaded guilty to theft in Superior Court and was sentenced to two years in prison, though that was suspended for a year of probation, Runnels said.He said church members agreed to the sentencing because they were under the impression that Judge John A. Parkins ordered a plan for restitution to be completed within 90 days. A plan has yet to be presented in court."I have people come into my office and say they're stuck wanting to know how come nothing is happening," Brundage said. "I understand why they feel let down."Frustrated, the church posted an open letter on its website in April asking that Deputy Attorney General Kevin Carroll give the case priority.Carroll wrote back to say the case "was overlooked as counsel caseload increased dramatically" but that he was seeking to have the Lind restitution hearing placed on the court calendar."Is she able to pay?" said Bradley Manning, a public defender who represents Lind. "I can't answer that question. I know she and her husband are having financial difficulties.
"All I know is that she admitted her guilt and there is an agreement she will pay."Berkebile, a trustee, says church members would like the legal end to be settled because it feels unfinished.A lot of people don't expect to get much back but they'd be comforted if Lind apologized, he said."I think even if she started paying 50 cents a month, some people could stop thinking about it," he said. "But some will never heal."