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Post date: June 14 2012

A.G. Schneiderman Announces Conviction Of Embezzler Who Stole State Funds Meant To Care For Mentally Disabled

CEO Admits To Stealing $600K From Taxpayers For His Own Personal Use

Schneiderman: Too Often, Officials Of New York Charities Behave As If The Organization Is Their Personal Piggy-Bank

NEW YORK – Attorney General Eric T. Schneiderman announced today the felony conviction of Seibert Phillips, former Chief Executive Officer of Evelyn Douglin Center for Serving People in Need (EDC) for stealing over $600,000 from the charity. Phillips, originally a resident of Brooklyn, was arrested yesterday and charged with one count of Grand Larceny in the Second Degree. Today, he pled guilty as charged before Judge Alexander Jeong in Brooklyn Supreme Court.

“Far too often, officials of charities behave as if the organization they serve is a personal piggy bank,” said Attorney General Schneiderman. “Here, not only were funds diverted from care for the beneficiaries, but those funds came from our taxpayers. This is unacceptable, and our office will continue to investigate these abuses of trust wherever they exist.”

Evelyn Douglin Center is a Medicaid-funded corporation which provides care and services to mentally disabled New York City residents. Among other things, it operates supportive and supervised alternative housing and provides residential habilitation and day habilitation programs for those in need. EDC is reimbursed in part by the New York State Medicaid program. Over a five year period, while Chief Executive of EDC, which he founded in 1999, Phillips secretly diverted over $600,000 in Medicaid checks made payable to EDC into a fraudulent account he opened in the corporation’s name. Phillips thereafter used this account for himself, funding frequent personal travel, cars and even his dog trainers. EDC’s Board of Directors was unaware of the secret account and cooperated in the investigation leading to Phillips’s arrest and conviction.

Phillips’s arrest and conviction arises out of the Attorney General’s prior investigation of EDC which concluded last year with a $5 million settlement. Medicaid rules required EDC to draft and maintain daily reports detailing the specific services it provided to Medicaid recipients. The investigation uncovered that, for a five year period ending in 2009, EDC altogether failed to create many of the records. As part of its settlement agreement, EDC also agreed to reconstitute its Board of Directors and to retain a monitor for five years to ensure its compliance with all applicable Medicaid rules and regulations.

Phillips’s secret account came to light during an Attorney General investigation of EDC. Phillips pled guilty today to Grand Larceny in the Second Degree, a class C Felony which carries a maximum penalty of five to fifteen years in state prison. Under the terms of his plea agreement, Phillips will be sentenced to five years of probation, pay back restitution totaling $445,000 to EDC, and perform 500 hours of community service. He will be sentenced on August 7, 2012.

This case was handled by Special Assistant Attorney General Twan V. Bounds, under the supervision of Deputy Regional Director Christopher Shaw and Special Deputy Attorney General Monica Hickey-Martin, Director of the Medicaid Fraud Control Unit. Also assigned were Special Auditor Investigator Dorota Gogolowski, under the supervision of Supervising Special Auditor Investigator Emmanuel Archer,and Senior Special Investigator Joseph Scalogna and Special Investigator Diana Castiblanco.