Former Hale House Director Pleads Guilty To Felony Charges Involving The Misappropriation Of Charitable Funds

State Attorney General Spitzer today announced that Lorraine Hale and her husband Jesse DeVore have pled guilty to the felony charges of Grand Larceny in the Fourth Degree and Attempted Forgery in the Second Degree, respectively, stemming from indictments that charged Hale with stealing in excess of $700,000 from Hale House Foundation, Inc. and DeVore with the theft of Hale House funds and falsifying business records.

The charges each constitute a Class E Felony. The guilty pleas were entered this morning before the Honorable Herbert Altman of the New York State Supreme Court. Sentencing is scheduled for October 24th.

Lorraine Hale admitted that while serving as Executive Director of the charity from 1996 through 2001, she wrongfully used thousands of dollars that belonged to Hale House for personal and non-charitable expenses. Hale diverted money raised under the well-respected Hale House name into an off-the-books checking account that she maintained at the Carver Federal Savings Bank.

Jesse DeVore admitted that while he was an employee of Hale House from 1996 through 2001, he assisted in establishing a secret bank account at Carver Federal Savings by using the false name of Jason Brown, under which he claimed to be the Treasurer of Hale House. DeVore then co-signed checks drawn on that account using the name Jason Brown. He then participated in diverting charitable funds for his personal use.

The Attorney General began civil forfeiture proceedings to recover the nearly $1 million obtained by Lorraine Hale and Jesse DeVore through their crimes. As part of their guilty pleas, the defendants have agreed to turn over approximately $118,000 worth of assets to Hale House, all of which had been seized in the forfeiture proceedings, and have judgments entered against them for balance of the stolen funds.

The judgment which will be entered against Lorraine Hale in the amount of $769,687 includes $488,650 - the cash value of a life insurance policy belonging to Hale House that Hale appropriated for personal use, and $281,036 in funds donated by the public to Hale House that she deposited into a secret bank account. The judgement against Jesse DeVore will be entered in the amount of $281,036 - the amount of misappropriated funds deposited into the Carver Savings account. Both defendants have agreed to file financial affidavits with the Attorney General's office regarding the amount of their assets, to determine whether further restitution to Hale House can be made.

"In bringing this case, we merely followed the evidence. Our concern has always been for the children under the care of Hale House. Money meant for children in desperate need of care should never have been used for personal benefit," AG Spitzer said. "We are working toward our twin goals of obtaining restitution for Hale House and restoring confidence to the donating public, so that this well-regarded charity can once again fulfill its mission."

The matter is being handled by Assistant Attorneys General Vincent J. O'Reilly and Lynn Goodman of the Criminal Division; Supervising Investigator Georgia Nurse and Forensic Accountant/Investigator Lester Dier of the Investigations Bureau; and Assistant Attorneys General Marla G. Simpson and Charles H. Smith III and Principal Accountant Lori Balaklaw of the AG's Charities Bureau.
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