Nonprofit Newswire | Sordid Scam Stops Construction on Catholic School

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April 1, 2010; Telegram & Gazette | This is my second newswire in two days about a fundraising scam. In both instances the legal system is moving hard against the perpetrators (alleged in this case) but this one is a good lesson for those doing capital projects.

In Worcester, Mass., Michael Hilady, a so-called professional fundraiser has been charged with bilking nuns out of $370,000 based on promises that he had lined up a fictitious donor named “Arthur” that was prepared to contribute between $3 million and $14 million. School representatives had actually accompanied Hilady to Florida a few times to dine with the donor but these in-person meets were always cancelled at the last moment.

Based on Hilady’s promises the nuns began their work and racked up $3 million dollars in construction costs before it became obvious that there was no money and evidently no Arthur. Hilady was located by investigators at a Comfort Inn in Rhode Island with a woman not his wife. Attorney General Martha Coakley said investigators concluded that Mr. Hlady spent some of the money paid him from Venerini Academy on adult entertainment, personal expenses and travel. “It was in-person entertainment and we are still investigating that piece of it also,” Coakley said. When asked if it involved escorts, she said, “Something like that.”  Hilady is being held on $250,000 bail.—Ruth McCambridge