Tales of the Ethically Challenged: The Quiet Embezzler

Digital embezzlement

August 3, 2012; Source: SeacoastOnline

Try this scenario: You’ve been on the job as the executive director of your current agency for just under two years. At your previous job in a nearby state, you happened to attract the attention of federal prosecutors who tagged you for having embezzled almost $1 million meant for poor families (not your own pockets). Your schemes included paying $413,000 of the nonprofit’s funds to a consulting firm that shuttled the money back to you personally. Another part of the embezzlement was having your nonprofit transfer $400,000 to a nonprofit that was really out of business—except for your role as the organization’s treasurer—and the money also ended up in your pockets. The evidence was pretty solid, so four months ago, you pled guilty to embezzlement of those and other funds—and for not paying taxes on your embezzled income—and as part of the plea, you agreed to reimburse the nonprofit $1.1 million and pay the IRS another $150,000. Maybe you thought you could dodge the problem forever—but certainly when the feds dragged you into U.S. District Court, the gig was up, right?

In March, Thomas Nelson signed an agreement to plead guilty to embezzling moneys from York County Community Action in Maine between 2005 and 2009. However…Nelson reportedly decided not to tell his current employer, Rockingham Community Action (RCA) in Portsmouth, N.H., about the charges of embezzlement or the guilty plea. In fact, Rockingham Community Action officials didn’t learn about the embezzlement or the guilty plea until last week when the U.S. Attorney for Maine issued a statement.

There are a couple problems here. First, one would think that the U.S. Attorney’s Office would have notified RCA about the investigation of Nelson at some point before the plea agreement was filed in court. Next, if Nelson was so clearly functioning at a level significantly below professional nonprofit probity, one would imagine that something—anything—would have surfaced in the review of Nelson undertaken by Southern New Hampshire Services, which oversees RCA, before he was hired for the Portsmouth job.

But there is something about Nelson to be said. Under what personal calculus would Nelson let RCA swing in the wind, only to find out about the embezzlement four months after he actually signed the papers admitting guilt? If you somehow found yourself in this position, wouldn’t you tell your new organization and find a way of politely resigning?—Rick Cohen