A.G. Schneiderman & State Comptroller DiNapoli Announce Arrest Of Not-for-profit Executive In Five-year Public Corruption Scheme
Ongoing Criminal Investigation Shows More Than $85K In Taxpayer Dollars Stolen From Charity Linked To Former State Senator Shirley Huntley
Schneiderman & DiNapoli: Our Investigation Will Crack Down On Public Officials And Charity Bosses Who Stole Funds Intended To Serve The Public
NEW YORK – Attorney General Eric T. Schneiderman and Comptroller Thomas P. DiNapoli today announced the arrest of a nonprofit executive accused of pocketing tens of thousands of dollars in taxpayer funds intended for public services in New York City. The joint investigation conducted by the Office of the Attorney General and the State Comptroller’s office revealed that Van R. Holmes -- the president of the Young Leaders Institute, Inc. -- stole more than $85,000 by creating dozens of false records and forged documents which he filed with State and City agencies in order to obtain public money.
The joint investigation by the Offices of the Attorney General and State Comptroller, with the assistance of the New York City Department of Investigation, is looking into the funds directed by former New York State Senator Shirley Huntley and others to charities like the Young Leaders Institute.
Mr. Holmes was arrested and arraigned in Queens County Court today. The complaint charges Holmes with Grand Larceny in the Second Degree, Grand Larceny in the Third Degree, Forgery in the Second Degree, Falsifying Business Records in the First Degree, and Offering a False Instrument for Filing in the First Degree. The maximum penalty for the top count charged in the complaint is up to 15 years in prison.
“Van Holmes pocketed tens of thousands of State and City taxpayer dollars meant to help low-income students and their families,” said Attorney General Schneiderman. “The men and women elected to public office and put in charge of public service organizations have a special responsibility to protect the public interest. Working together with Comptroller DiNapoli, we intend to use every tool in our arsenal to crack down on anyone who abuses the public trust.”
“My office has found far too many instances where public money is abused for personal use,” Comptroller DiNapoli said. “Taxpayer dollars meant to create a better future for New York teens at the Young Leaders Institute were instead used to purchase men’s wear, car repairs, and theater tickets. It’s shameful. My office will continue to work hand in hand with Attorney General Schneiderman to ensure that those who betray the public’s trust are punished and that those efforts yield results.”
“Thousands of City dollars earmarked for schoolchildren were misdirected to a nonprofit executive who double-dipped and padded the bills, according to the criminal complaint,” said DOI Commissioner Rose Gill Hearn. “We joined forces with our State partners to coordinate the investigation of allegations of fraud in an organization that received State and City discretionary allocations and to take action to root out fraud where it is found.”
The complaint accuses Holmes of engaging in a fraudulent scheme to steal member item funds and city discretionary awards. From 2007 to 2010, Holmes obtained three member item grants sponsored by former New York State Senator Shirley Huntley. He created dozens of false record which he submitted to the State in support of his fraudulent claims for reimbursement. He received a total of approximately $80,000 from the State, roughly $77,000 of which he stole.
For example, the defendant created false invoices and payment records to make it appear as though he took 50 youths on a two day and two night trip to a retreat center. No such trip occurred and the defendant pocketed the funds instead.
The defendant also fraudulently claimed that he spent a $70,000 member item grant on a “Youth Enterprise/Learn to Earn/Leadership Program.” The defendant claimed that this program offered youths aged 14 to 19 the opportunity to go on trips to Wall Street and Albany, to receive mentoring and training in “job readiness and running their own business,” and to participate in a “stipend program funded by State Senator Shirley Huntley,” among other things.
As alleged in the complaint, however, the program never took place. Instead, the defendant submitted falsified records for purchases he never made, including the alleged purchase of a dozen laptop computers. Furthermore, the defendant submitted records of payments he claimed to have made to consultants of the grant program, but which he actually made to employees of his afterschool programs and summer camps in Queens – programs for which the defendant charged parents a fee.
In 2011 and 2012, the defendant received five discretionary awards from City Council Members. As a result of these awards, the defendant entered two contracts with the Department of Youth and Community Development, the city agency that administered the grants. The defendant received approximately $30,000 as a result of these discretionary grants, of which he stole over $11,000. As with the state member item thefts, the defendant created false business records and forged documents in order to support his fraudulent requests for reimbursement from the City.
For example, in 2011, the defendant put on a “Saturday Academy” for school children. While the Young Leaders Institute did provide this program, the defendant forged employee personnel records and tax forms and altered nearly every timesheet submitted to the City for reimbursement in order to inflate the hours of his employees and conceal the fact that he was not paying payroll taxes. The defendant stole over $4,000 in this manner.
In 2012, the defendant provided an afterschool program in Queens that was supposed to be funded by the discretionary awards. The defendant was prohibited from charging a fee for participation in the program, but he continued to charge parents the regular fee, even encouraging parents to pay him cash whenever possible. The defendant also submitted fraudulent claims for reimbursement to the City, including payments he allegedly made to himself and to another employee that were not related to the afterschool program. The defendant stole over $7,000 in this manner.
Individual disbursements of public funds are not themselves evidence of any wrongdoing, and it would be inappropriate to presume that any particular public official has engaged in misconduct simply by directing funds to a non-profit. The subject of this particular case was Mr. Holmes’ theft of tens of thousands of dollars of public funds from the Young Leaders Institute.
Prosecuting the case are Senior Counsel Emily Bradford and Assistant Attorney General Jerrold Steigman, with assistance from Senior Litigation Counsel Gary Fishman, under the supervision of Public Integrity Deputy Bureau Chief Stacy Aronowitz, Chief William E. Schaeffer, and Executive Deputy Attorney General for Criminal Justice Kelly Donovan. The Investigation was handled by Investigator Gerard Matheson and Investigative Analyst Brian Selfon of the Investigations Bureau, Supervising Forensic Auditor Edward Keegan, and Analyst KerryAnn Rodriguez. New York City's Department of Youth & Community Development also cooperated and assisted with the investigation.
The joint investigation was conducted by the Comptroller’s Bureau of State Expenditures and Legal Services Division’s Investigations Unit.
Chanterelle Sung, Ivette Morales, and Kerasha Campbell of the Nonprofit Vendor Unit of the New York City Department of Investigation assisted with the investigation.
Anyone with additional information on this matter or any other public corruption is encouraged to contact the Attorney General’s Office at 1-800-996-4630 or the Comptroller’s office by dialing the toll-free fraud hotline at 1-888-672-4555; filing a complaint online at email@example.com; or mailing a complaint to: Office of the State Comptroller Investigations Unit, 110 State Street, 14th floor, Albany, NY 12236.