Lorraine Hale And Husband Indicted For Stealing Hale House Funds

Attorney General Spitzer today announced the indictments of Lorraine Hale and her husband Jesse DeVore for stealing in excess of $700,000 from the Hale House Foundation, a New York City charity once acclaimed for its work with the children of drug-addicted mothers.
The indictment alleges among other things that Hale and DeVore diverted funds to an off-the-books checking account at a bank and cashed in a Hale House insurance policy.

Nearly $250,000 in charitable money was withdrawn by Hale for personal use from a secret checking account that was never disclosed on any official Hale House Foundation record. The theft was perpetrated in part by a series of checks forged by DeVore. In addition, Hale converted a life insurance policy a "key person" insurance plan owned by Hale House for her and her husband's personal expenses. The cash value of the proceeds of the policy was slightly more than $488,000.

The indictments are the culmination of an investigation that began in August 2000 by the Attorney General's Office into the financial management of the charitable assets of Hale House.

In a 70-count indictment, Hale and DeVore were charged with one count of Grand Larceny in the Second Degree. Hale was charged with three counts of Offering a False Instrument for Filing in the First Degree concerning tax document filings relating to the existence of the undisclosed account for the fiscal years 1997, 1998 and 1999. In that same indictment, DeVore was charged with 20 counts of Falsifying Business Records in the First Degree, 20 counts of Forgery in the Second Degree, 20 counts of Criminal Possession of a Forged Instrument in the Second Degree and six counts of Criminal Possession of Stolen Property all relating to the theft of money from Hale House Foundation.

In a separate indictment, Hale was charged with Grand Larceny in the Second Degree for cashing in the life insurance policy owned by Hale House on her life and moving the money to her private bank account. Hale was also charged with one count of Offering a False Instrument for Filing in the First Degree relating to a tax filing for the fiscal year 1995.

Hale and DeVore were arraigned by Justice Arlene Goldberg in Part 70 of the New York County Supreme Court. The defendants were released on their own recognizance. The charges are mere accusations and the defendants are presumed innocent until proven otherwise by a court of law.

In conjunction with the criminal action, the Attorney General has also commenced today a civil forfeiture action seeking the recovery of more than $1 million, the amount alleged to have been obtained by Hale as a result of her crimes. Money raised under the well-respected Hale House name to fulfill its mission of caring for children born addicted to illegal drugs and/or afflicted with AIDS was instead used to pay Hale's property taxes, to install a Jacuzzi in her home, to pay her brother's legal expenses and to fund her husband's theatrical production.

The Attorney General has obtained a court order seizing the assets of Hale and DeVore. The Attorney General intends to return funds recovered in the civil action to the Hale House charities.

The Attorney General thanked the new Board of Directors of Hale House for their full cooperation.
The indictment alleges among other things that Hale and DeVore diverted funds to an off-the-books checking account at a bank and cashed in a Hale House insurance policy.

Nearly $250,000 in charitable money was withdrawn by Hale for personal use from a secret checking account that was never disclosed on any official Hale House Foundation record. The theft was perpetrated in part by a series of checks forged by DeVore. In addition, Hale converted a life insurance policy a "key person" insurance plan owned by Hale House for her and her husband's personal expenses. The cash value of the proceeds of the policy was slightly more than $488,000.

The indictments are the culmination of an investigation that began in August 2000 by the Attorney General's Office into the financial management of the charitable assets of Hale House.

In a 70-count indictment, Hale and DeVore were charged with one count of Grand Larceny in the Second Degree. Hale was charged with three counts of Offering a False Instrument for Filing in the First Degree concerning tax document filings relating to the existence of the undisclosed account for the fiscal years 1997, 1998 and 1999. In that same indictment, DeVore was charged with 20 counts of Falsifying Business Records in the First Degree, 20 counts of Forgery in the Second Degree, 20 counts of Criminal Possession of a Forged Instrument in the Second Degree and six counts of Criminal Possession of Stolen Property all relating to the theft of money from Hale House Foundation.

In a separate indictment, Hale was charged with Grand Larceny in the Second Degree for cashing in the life insurance policy owned by Hale House on her life and moving the money to her private bank account. Hale was also charged with one count of Offering a False Instrument for Filing in the First Degree relating to a tax filing for the fiscal year 1995.

Hale and DeVore were arraigned by Justice Arlene Goldberg in Part 70 of the New York County Supreme Court. The defendants were released on their own recognizance. The charges are mere accusations and the defendants are presumed innocent until proven otherwise by a court of law.

In conjunction with the criminal action, the Attorney General has also commenced today a civil forfeiture action seeking the recovery of more than $1 million, the amount alleged to have been obtained by Hale as a result of her crimes. Money raised under the well-respected Hale House name to fulfill its mission of caring for children born addicted to illegal drugs and/or afflicted with AIDS was instead used to pay Hale's property taxes, to install a Jacuzzi in her home, to pay her brother's legal expenses and to fund her husband's theatrical production.

The Attorney General has obtained a court order seizing the assets of Hale and DeVore. The Attorney General intends to return funds recovered in the civil action to the Hale House charities.

The Attorney General thanked the new Board of Directors of Hale House for their full cooperation.

The matter is being handled by Assistant Attorneys General Vincent J. O'Reilly of the Criminal Prosecutions Bureau and Lynn Goodman of the Criminal Division; Supervising Investigator Georgia Nurse and Forensic Accountant/Investigator Lester Dier of the Investigations Bureau; along with Section Chief Marla G. Simpson, Assistant Attorney General Charles H. Smith III and Principal Accountant Lori Balaklaw of the AG's Charities Bureau. The Attorney General also thanked the New York State Police for their assistance in this investigation.
sitemap Intergov foil PressOffice RegionalOffices SolicitorGeneral AppealsandOpinions ConvictionBureau CrimPros OCTF MFCU PublicIntegrityInvestigations TaxpayerProtection Antitrust ConsumerFrauds Internet InvestorProtectionRealEstateFinance CharitiesCivilRightsEnvironmentHealthCareLaborTobaccoCivilRecoveriesClaims Litigation RealPropertySOMB BudgetLegalRecruitmentHuman Resources Bureau