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Post date: August 25 2004

Settlement With Foundation Requires Repayment Of $400,000

Attorney General Spitzer today announced that the president of the James S. Adams Foundation had entered into an agreement with his office under which he has repaid to the foundation more than $400,000 as a result of conduct violating New York's Not-for-Profit Corporation Law. The money is to be distributed to charities which were recipients of prior grants from the foundation, except for $4,000 in penalties incurred for late filing of financial reports.

The Attorney General's investigation determined that between June of 1996 and August of 2003, Peter W. Adams, foundation's sole director and officer, improperly transferred money from the foundation to himself and to a business which he owned.

"We will not tolerate the raiding of charitable assets by those who are entrusted with their safe-keeping", Spitzer said. "My office seeks to protect those who are beneficiaries of charitable funds. The resolution of this case illustrates what we do on a day-to-day basis to see that charities in New York receive what is due them. This case should send a message to fiduciaries of charities that they will be held accountable for the charitable assets committed to their charge."

In addition to the repayment to the foundation, Adams has agreed to bring all reports of the Foundation up to date and then to dissolve the foundation, paying over all assets remaining in the Foundation proportionally to prior grant recipients. Adams also has agreed that he will not act in the future as an officer, director or trustee of any New York charity.

The investigation was handled in the Attorney General's Charities Bureau by Assistant Attorney General Andrew P. Davis and Lori Balaklaw, Principal Accountant, under the direction of Assistant Attorney General Robert Pigott and William Josephson, the former bureau Chief.