Trustee Spent $490K On Travel, Personal Litigation
May 21, 2018 NPT Staff
A Manhattan foundation trustee has agreed to pay $550,000 in restitution after using foundation dollars for personal travel and entertainment and to settle personal litigation.
David Richenthal, son of Richenthal Foundation founder Arthur Richenthal, was reportedly reimbursed $240,000 by the foundation for costs that were primarily made up of personal expenses, including personal travel, according to a report by Acting New York Attorney General Barbara Underwood. The foundation, which supports nonprofit theater groups, also made a $250,000 grant to settle a litigious matter between Richenthal and a former romantic partner.
“When someone uses their position to enrich themselves, it’s not just an abuse of trust — it’s an abuse of the law,” Underwood said in a statement. “We will continue to pursue wrongdoing, protect charitable assets, and — as in this case — work with organizations that respond quickly and seriously to address misconduct.”
A spokesperson for the foundation declined to comment.
The attorney general investigation found that the misappropriation of foundation funds was made possible, in part, by a lack of internal foundation controls and a failure by fellow trustees to oversee Richenthal’s use of assets. As part of a settlement, foundation leadership has agreed to reforms including trustee training, adoption of new control policies, and a reordering of its board to include five members, at least two of which must be independent trustees, according to regulators.
As part of the settlement, Richenthal has agreed to pay an additional $150,000 on top of the $400,000 he had paid back during the investigation. He is further barred from any direct access to foundation assets or from serving as a director, officer, or other fiduciary role for any nonprofit operating in New York.
The foundation reported book value of assets totaling just shy of $11.4 million on its 2016 Internal Revenue Service Form 990-PF, the most recent date publicly available. That sum was down from $12.5 million in 2015, $12.2 million in 2014, and just shy of $12.9 million in 2013. The foundation reported expenses and distributions exceeding revenue by $1.06 million in 2016, $760,000 in 2015, and $813,000 in 2014. Of the $3.64 million in expenses and distributions reported during that time, $1.98 million were categorized as operating and administrative expenses and $1.65 million were categorized as contributions.