By Andrew Coen
District Attorney Kathleen Rice and Comptroller Howard Weitzman announced at a Sept . 20 press conference in Mineola the results of an investigation and financial audit into the Five Towns Community Center on the same day that a grand jury indicted the agency's former bookkeeper, Anthony Savage, in connection with a check-cashing scheme that resulted in more than $50,000 in losses to the community center.
Savage, 41, of The Bronx, was charged with second-degree grand larceny, three counts of first-degree falsifying business records and first-degree scheme to defraud. With the announcement of the indictment by Rice, Weitzman released his office's audit of the Five Towns Community Center, detailing what he described as "lax oversight," "inadequate internal controls" and a "failure to report missing funds to the authorities." He said even though the community center, located on Lawrence Avenue in North Lawrence, is a private, non-profit organization, it was important for his office to conduct the audit because the agency receives county, state and federal funding. Other findings in Weitzman's audit included a lack of accountability for donations and a deficiency in the segregation of duties.
Officials at the community center released a lengthy statement after the audit results were announced, stating that they have been proactive since learning of a theft of $2,200, allegedly by Savage, and that the former employee returned the money. Jonathan Davis, the agency's executive director, said that during the county's audit they discovered that $6,000 had been stolen, and on Feb. 20 the community center's comptroller, Joseph Randazzo, discovered that additional government funds had been taken.
After Randazzo's discovery, the center decided to hire an independent forensic accounting firm, Armao, Costa And Ricciardi. "They were asked to investigate and document the theft and to also analyze our internal control systems and make recommendations to insure that such an event can never occur again," said Davis of the auditing firm. "The center's response was taken before county action was taken."
According to Weitzman, the community center initially launched an internal investigation that resulted in an employee returning a small amount of money, but the audit showed financial discrepancies of $7,000. Community center officials then hired a forensic auditor to investigate additional accounts and uncovered potential thefts from other sources amounting to more than $50,000.
The case was then referred to the Nassau County Police Department's Crimes Against Property Squad and the district attorney's office, which launched an investigation into the center's accounts confirming $51, 741.85 in losses.
"Organizations such as the Five Towns Community Center and school districts ... cannot police themselves," said Rice during the press conference. "They need to report any activity that they feel is suspicious."
Weitzman said the community center cooperated with his office during the audit but only after being questioned about the missing funds. He added that the center should have reported the situation to authorities right away rather than handle it internally.
"They chose to sweep the problem under the rug rather than have it fully investigated," said Weitzman during the press conference.
Community center officials strongly denied that they were lax in their response to the theft. "We have worked with the police and DA's office since January 2006 to fully prosecute the bookkeeper and his cohorts in the scheme," said Davis.
The other community center employee, Brigette Barker, 35, of Hempstead, was arrested in May and charged with third-degree grand larceny, to which she later pleaded guilty. She is scheduled to be sentenced Oct. 27, when she faces a
maximum of seven years in prison. Additional accomplices are still being sought in connection with the check-cashing scheme, according to Rice.
Weitzman said his office will work with the county attorney to recoup all funds owed to the county. He said the audit showed that from January 2003 to July 2005, the community center offered services under seven contracts with Nassau County, including drug counseling and programs for seniors and youth. In 2004, about $962,000 of the agency's $3.3 million budget was funded by the county.
Officials from the DA's office said it is alleged that from February 2004 to February 2005, Savage, managing the "AIDS Program" for the center, created at least 61 fraudulent checks drawn on the general accounts payable line to individuals appearing as outside consultants for the program. Law enforcement officials said it is alleged that these individuals, currently under investigation, cashed the checks and then split the proceeds with Savage, who faces a maximum of 15 years in prison if convicted.
Davis said that since the audit, the center has put in place a series of internal controls to prevent such a theft from occurring again.
Savage's attorney, Steven Gaitman, could not be reached for comment.
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