A Kansas foster care provider with locations in six states is facing calls to have its public contracts terminated following the recent federal indictment of two of its former executives in an alleged $10 million fraud scheme dating back to 2018.
Leaders of Saint Francis Ministries, a faith-based 501(c)(3) nonprofit headquartered in Salina, Kansas, said via a statement that they have been cooperating with authorities for two years, since the officials were put on leave and an investigation began into their activities.
The indictment unsealed recently accuses former CEO Robert Nelson Smith, an ordained Episcopal priest, of using the nonprofit’s credit cards for “personal, unauthorized expenditures,” according to an announcement from the U.S. Department of Justice (DoJ).
Smith also is accused of conspiring with former Chief Information Officer William Whymark to hire a company owned by Whymark to perform technology upgrades for the nonprofit and later approving allegedly “fraudulent, overinflated invoices” submitted by the firm, according to information from the DoJ.
Smith, 50, of Salina, Kansas, has since been charged with one count of conspiracy to commit wire fraud, 15 counts of wire fraud, and one count of money laundering.
Whymark, 50, of Mount Kisco, New York, was charged with one count of conspiracy to commit wire fraud, 10 counts of wire fraud, and three counts of money laundering.
The FBI is continuing to investigate the case, according to officials.
The indictments, coming on the heels of published reports detailing alleged mismanagement and substandard care to children in the nonprofit’s custody, have led lawmakers in Kansas and Nebraska to call for ending their states’ contracts with the organization.
Four other states – Arkansas, Mississippi, Oklahoma, and Texas – also contract with the organization for foster care.
Saint Francis Ministries released a statement to The NonProfit Times saying it has “cooperated both collaboratively and transparently with authorities since the beginning of the investigation” and has “participated in numerous audits, reviews, and in-depth investigations of our financial records.”
The organization — which serves more than 10,000 children and employs nearly 1,600 people — also has installed new leadership with new controls in place, said an organizational spokesman.
“Every one of Saint Francis’ employees feel hurt by what occurred,” he said. “However, we also know that one or two people do not define or reflect an organization. We remain committed to the care and safety of children and families. The excellent work we have done for 77 years continues to guide us.”
Smith’s attorney, Lance Sandage, didn’t immediately reply to a phone message from The NonProfit Times. Whymark’s attorney could not immediately be determined.
SFM reported total revenues of $153 million, and a loss of $4.2 million on its most recent federal Form 990, which is for Fiscal Year 2019. Smith was paid $305,000 during 2019, the Form 990 shows. In 2018, Whymark’s salary was $164,000 as chief information officer.
Both are expected back in court Dec. 14, according to court officials. Each charges carries up to 20 years in prison and a $250,000 fine.
