The following Democrat & Chronicle story illustrates how easy, with no oversight, a nonprofit executive can siphon money for personal purposes. Certainly it is unfair to place all the blame for multiple financial bad behavior on the board's lack of oversight but hey, if not them, who then? After all it is noteworthy that a board that used to meet monthly moved meeting to once a year. And, who knows what actually transpired at board meetings. For sure it was not a review of the financials as it is clear that even a minimal review would have illustrated wrongdoing. But the best I can do is summarize what is clearly a story well executed by the Will Cleveland at the Democrat & Chronicle.
George Moses trial: Nonprofit board's lack of oversight led to fraud, say prosecutors
To cover $3,377 in expenses in 2018, George Moses asked for and received a reimbursement check from the nonprofit he ran, North East Area Development Corporation.
During Moses' public corruption trial in U.S. District Court in Rochester, which finished its first week Friday, prosecutors said Moses requested the money to cover expenses not typically associated with the business: a $792.60 dentist bill for his three children, prescriptions, napkins, mail-order teas, essential oils, eye care for his youngest son, pineapple spears.
Moses, the former executive director of NEAD and chairman of the Rochester Housing Authority, is accused of stealing nearly $200,000 in taxpayer money. He faces 32 wire and tax fraud charges in his current federal trial.
His former assistant Shirley Boone began testifying Thursday, resumed Friday and is expected to continue into next week. Defense lawyers will then get a chance to cross-examine Boone.
Through questioning from Assistant U.S. Attorney Richard Resnick, Boone was shown receipts, bank and credit card statements, timeshare contracts, checks, and other financial documents to establish how often and how much Moses took money intended for the two nonprofits.
Boone, who has already pleaded guilty to conspiracy to defraud for bilking the state out of $45,000, began to lay the foundation for the fraud she helped perpetrate at the behest of her former boss, prosecutors said.
As a condition of her plea agreement, Boone promised to testify against Moses. Resnick said Boone’s testimony would be the longest of the trial, which is expected to last up to two months.
Boone worked for Moses at both NEAD and the Rochester Housing Charities from late 2011 to 2019, when she was ensnared in the investigation. As one of the few employees of the Webster Avenue-based nonprofit, she worked closely with Moses, first serving as his executive assistant and then becoming chief of staff for NEAD.
Boone stated the NEAD board of directors was mainly hands-off and provided no oversight. She said the board went from meeting monthly to just once per year.
The timeshare and the pizza franchise
In 2014, Moses bought a timeshare in Orlando, Florida, for $20.895.03 using money from NEAD accounts, prosecutors said.
Records show that Moses used money from Freedom Community Enterprise Inc. a for-profit NEAD subsidiary, for the purchase of the three-bedroom timeshare from Westgate Resorts.
In an email from Boone to Moses showing his upcoming work calendar, the schedule includes a "franchise meeting" in Orlando from April 8 to April 16, 2014. But Resnick showed records that indicated the trip to Orlando was really a vacation, paid for months in advance through a series a NEAD-authorized payments.
Defense attorneys earlier said Moses wanted to try to expand the NEAD "brand" and hoped to replicate a pizza operation established by Freedom Community Enterprise in Florida.
Resnick introduced minutes from a NEAD board meeting on April 22, 2014, where Moses never said he purchased the timeshare despite discussing financial matters during the gathering. A former NEAD bookkeeper raised concerns in a December 2014 email that Moses used funds from Freedom Community Enterprise to buy the timeshare.
Evidence showed Moses indicated he wanted Boone to help him work with Florida officials to transfer ownership of the property from himself to Freedom Community Enterprise because he intended to use the location to set up a pizzeria franchise through a partnership with local chain Salvatore's. Moses is accused of intending to open five of the franchises at different Westgate resort properties by 2016.
Through Freedom Community Enterprises, NEAD ran a store, café, and pizzeria called Speedy Slice. The pizzeria was operated through a partnership with Salvatore’s, and Salvatore "Soccer Sam" Fantauzzo, the founder of the chain, is expected to testify later in the trial.
The business has since closed.
The only employees were Moses’ relatives, including his children and his brother. The bookkeepers at the nonprofit from 2016 to 2019 were his sister and mother-in-law.
Boone said they worked as part-time independent contractors so they wouldn’t have to be included in payroll records. Resnick presented checks from NEAD signed by Moses made out to his relatives.
Through Boone's testimony and a parade of documents, Resnick showed the April 2014 trip to Florida was the first of many. That included a 2016 "exotic Eastern Caribbean" Carnival cruise out of Miami, where Moses allegedly paid for a $336.08 dinner in the Bahamas with the Freedom Community Enterprise credit card.
The fake construction company
In order to bilk the Dormitory Authority of the State of New York, or DASNY, Boone admitted she fabricated documents and created a fake paper trail from a nonexistent construction company, Freedom Community Enterprises.
Freedom Community, however, does not do construction work and did no repairs for NEAD. Using a template she said was provided by Moses, Boone created fake documentation for a proposal to submit to DASNY.
Moses told Boone the money was needed to make payroll, but they told the state authority that is was needed to complete roofing repairs on some NEAD-owned properties.
She admitted she knew what she was doing was wrong. But when she confronted Moses about her concerns, he reportedly said, "This is how business gets done."
When Resnick asked Boone why she just didn’t walk away, Boone said she was close to retirement and wanted to remain employed until then.
The trial resumes Monday and is scheduled to last up to another seven weeks.
Contact Will Cleveland at [email protected]. Follow him on Twitter @willcleveland13. Thanks to our subscribers for supporting quality local journalism. If you aren’t a subscriber, please consider a digital subscription.