Ex-Nonprofit Controller Charged With Embezzlement
November 20, 2014 The NonProfit Times
The former controller of a medical nonprofit has been charged with embezzling more than $1.8 million of the organization’s funds for personal use, according to the a formal complaint filed by federal prosecutors in New York City.
Karen Almeddine, also known as Karen Dean, served as the controller of the Hereditary Disease Foundation (HDF) from September 2005 until her resignation in January 2014. According to a statement released by HDF, the alleged embezzlement was discovered several months ago when the foundation’s current controller discovered “what appeared to be fraudulent transactions” by Dean. After an investigation and a forensic audit by an outside legal counsel, the $1.8 million loss was confirmed.
“The Foundation’s professionally-managed endowment was never in jeopardy,” read the statement released by HDF. “The internal investigation furthermore determined that although the theft was substantial only a small amount of grant monies committed before 2014 was compromised.” The statement further added the organization has conducted a review of its financial procedures and has “implemented additional controls to prevent such an incident from reoccurring in the future.”
A call to HDF CEO Jonathan Guest for further comment was not immediately returned.
“As alleged, Karen Alameddine not only embezzled almost $2 million and evaded taxes, she did so by ripping off the non-profit organization she worked for – an organization dedicated to finding cures for serious diseases – and she did so when she was supposed to be responsible for its finances,” said Manhattan U.S. Attorney Preet Bharara.
The complaint filed by prosecutors details in great lengths the allegations against Dean. It alleges that from 2008 through early 2014, Dean diverted funds to her personal bank account. She managed to hide the alleged fraud by disguising QuickBooks entries to make transfers to her personal bank account appear as if they were transfers made to grant recipients. Finally, she further sought to disguise the fraud by inventing a fictitious accounting firm named “Davis & Greene,” purportedly based in Washington, D.C., which was purported by Dean to prepare certain tax returns for HDF for the 2012 and 2013 tax years.
Dean was arrested in Boston Tuesday and was presented yesterday before United States Magistrate Judge Judith Gail Dein in Boston federal court. Should she be convicted, she faces up to 25 years in prison.