Thursday, December 29, 2011

Devolution Into A Sad Charity Fraud

by Gary Snyder

Over an 11-year period, Linda Duffy, a former longtime Saugus (MA) Library employee, allegedly stole more than $800,000. Duffy worked at the library; she was "entrusted with a progressively broader range of administrative tasks" and "actively sought to control certain aspects of the library's affairs, for example, handling incoming mail and processing donations by library patrons.” Instead, Federal documents allege, Duffy began depositing checks into the decoy account in November 2004 bearing memo lines such as, "library fees" or, in the case of donations, "Memory of [person's name]."

That same month, she wrote checks from the decoy account to her personal account at Eastern Bank and used the money to purchase jewelry, and pay off dental bills, car repairs, furniture and pay her home mortgage. Prosecutors allege she put a substantial portion of the money into an Eastern Bank account belonging to Duffy's daughter. Much of the funds Duffy used came from charitable donations, including $143,535 from January 2008 to January 2011 sent by Comerica Bank, as trustee for a charitable trust holding an account there. The statements from Comerica were sent directly to Duffy at the library, the court document states. Duffy also allegedly intercepted numerous donations from the GE Foundation between 2004 and 2011, and, according to the document, deceived the foundation into matching funds for donations that never actually occurred. In addition, the document states that Duffy or an accomplice also asked GE to match multiple donations allegedly made by Duffy's mother-in-law, who is the widow of a former GE employee on about 15 occasions between 2007 and 2010. 

In total, the GE Foundation sent the library more than $450,000 in matching funds, nearly all of which were sent in response to made-up library donations.

The scandal at the public library also prompted selectmen to move against the Library Board of Trustees, as many in town wondered how they could not have known what Duffy was allegedly doing. 

The Board of Selectmen voted unanimously last week to draft a letter to the Library Board of Trustees asking for their resignation. 

"We find ourselves in an unfortunate situation and we do appreciate the volunteers," said selectman Chairman Scott Crabtree last week. "With these situations everyone puts their time and energy into this, unfortunately, based on the findings, the board felt this was an appropriate action to restore the public confidence and trust." 

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, ,, Responsive Philanthropy Magazine, New York Times...and many more • Nonprofits: On the Brink (iUniverse, 2006)
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