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Post date: October 31 2013

A.G. Schneiderman Secures $240k From Head Of Brooklyn Pre-school, Settling Charges Of Self-dealing

Silvia Kuper Required To Make Full Restitution, Resign Her Position As Head Of Non-Profit School And Accepts Bar Against Any Future Service As Director Or Officer Of A New York Nonprofit

Schneiderman: My Office Has Zero Tolerance For Nonprofit Executives Who Abuse Their Position For Personal Gain

NEW YORK - Attorney General Eric T. Schneiderman today announced that his office has obtained a $240,000 agreement to resolve its investigation into self-dealing by Silvia Kuper, the Executive Director and a member of the board of directors of Therapy and Learning Center, Inc.  The Attorney General’s investigation into the Brooklyn not-for-profit corporation, which provides pre-school and early intervention services for special needs and non-special needs children, found that Kuper used $220,000 in school funds to pay for online personal counseling services and exorbitant leases on a series of luxury Audi A-8 sedans registered in her name. The total amount to be paid by Kuper includes full restitution of the $220,000 in improper charges and $20,ooo to defray the costs of the Attorney General's investigation. 

“It’s sad any time my office finds evidence of self-dealing by those who work in and lead New York’s important not-for-profit sector organizations. But charging personal expenses on the backs of children, particularly those with disabilities, is beyond the pale,” Attorney General Schneiderman said. “Ms. Kuper will be required to repay hundreds of thousands in charitable dollars she stole for herself, and she’ll be permanently barred from running any New York charity – whether a school or any other organization that serves New Yorkers.”

The settlement requires Kuper, 53, of Manhattan, to resign her positions as the Executive Director and a board member of TLC, which enrolls approximately 140 students and employs 75 staff members, and bars her from any future service as an officer or director of any New York not-for-profit organization. Pursuant to the settlement, TLC will reconstitute its board of directors and, in coordination with the State Department of Education, adopt additional governance reforms and strengthen its internal controls.  

Attorney General Schneiderman’s Charities Bureau found that, from 2007 to 2010, Kuper, who oversaw the charity’s finances, used TLC’s corporate American Express card to charge over $130,000 in fees at several websites that provided her with personal counseling services which had no legitimate business purpose. With her knowledge, these services were paid for from the organization’s checking account. 

The investigation also determined that, between 2007 and 2012, Kuper leased a series of Audi A8 4.2 Quattro sedans in her name and made lease payments of approximately $1,300 per month, all with organization funds. Although Kuper was authorized to lease a car by TLC’s board, she abused that authority by leasing an unreasonably expensive car entirely inappropriate for the head of a state-funded not-for-profit preschool – and to the detriment of the school. The leases resulted in the wasting of $90,000 in the pre-school’s funds. 

By engaging in this conduct, the investigation found, Kuper misused her position as an officer and director of TLC to benefit herself at the expense of the organization, breached her fiduciary duties to TLC, and violated New York State law by failing to properly administer charitable assets. 

Under the $240,000 settlement, Kuper will pay $220,000 in restitution and $20,000 to defray the costs of the Attorney General’s investigation.  Of the restitution fund, $77,000 will be held in escrow pending a determination by the State and City Departments of Education whether either agency was overbilled by TLC as a result of Kuper’s improper expenditures.  

The investigation of this matter was conducted by Assistant Attorney General Michael Torrisi under the supervision of Charities Bureau Enforcement Section Chief David Nachman, Executive Deputy Attorney General for Social Justice Alvin Bragg and First Deputy for Affirmative Litigation Janet Sabel.

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