August 23, 2010; Source: News-Press | If you are a nonprofit operating in Fort Meyers, Fla. and you have something you don’t want the public to know, watch out for Melanie Payne, investigative reporter for the New-Press. In a column in Monday’s paper, Payne reveals how the Fort Meyers Rotary Club hushed up the fact a former director embezzled $235,000 two years ago from its trust fund.
Payne writes that the Rotary promised to stay quiet about the theft and not press criminal charges if Philip C. Bennett agreed to pay back the money. He did. However, Payne adds, that unlike the Rotary she’s going public with the disclosure because she’s not bound by any agreement to keep mum. She also writes, “Moreover, I think that this type of slap-on-the-wrist, we-know-you-made-a-mistake, let’s-forgive-and-forget way of handling theft does a disservice to the community, makes nonprofits targets for crooks, and sends the message that if you steal from a nonprofit, you can get away with it.”
Adding insult to injury, in its 2009 tax filing, which the newspaper has posted online, the Rotary said, “During the year, the organization became aware of the fact that a former officer/director had an unauthorized use of corporate assets in the amount of $235,000.” Again, rather than coming clean, the group reported the missing funds as a $235,000 loan.
Bennett, a certified public account whose firm provides forensic accounting and fraud examinations, refused to discuss the matter with the reporter. He simply said, “You are asking about a painful and unfortunate incident that occurred more than two years ago. The situation was resolved to everyone’s satisfaction. It is a personal matter that I do not wish to discuss publicly.”
Rotary board members say the decision not to press charges was unanimous. Their rationale? According to board president Bill Bellville, “It was to close a chapter and move on.” One expert Payne consulted for her article, Chicago attorney Jack Siegel, who works with charities, said while he understands why the group wanted to avoid embarrassment, he points to a double standard at play. “No one has any problem throwing a bank robber in jail. Just because they do it with a pen doesn’t make it any less serious.”—Bruce Trachtenberg