Wednesday, July 22, 2009

PA Non-Profit, Victim of Fraud, Seeks Restitution Whilst Facing Possible Revocation of its Corporate Franchise

The sentencing of Ruth Arnao, former aide and longtime friend of convicted ex-State Senator Vincent J. Fumo, brings limited closure to a sordid tale of petty theft from a Pennsylvania non-profit.  Arnao, once the head of Citizens’ Alliance for Better Neighborhoods, was found guilty of conspiring to defraud the nonprofit by getting it to pay for hundreds of personal and consumer services.  She was sentenced to serve 12 months and 1 day behind bars while Fumo got 55 months.

Meanwhile the state Attorney General’s Office took the first step toward dissolving Citizens’ Alliance in April, filing a civil complaint seeking revocation of its corporate franchise.  The non-profit has issued a statement casting itself as a victim of Fumo and Arnao’s fraud scheme.  According to the Philadelphia Inquirer, in the victim impact statement submitted last week just prior to Fumo's sentencing, Citizens’ Alliance said that it wanted restitution, including the $2.1 million it had contributed to Arnao’s defense.  The report stated that the non-profit’s reputation had been “damaged irreparably as a result of its constant associations with the illegal activities of the defendants.”  It also said that in addition to having to discontinue many of its programs and discharge employees, the reputation of its board of directors had been harmed. 

As for the financial loss, Assistant U.S. Attorneys John J. Pease and Robert A. Zauzmer contended that as a result of Fumo and Arnao’s fraud, which included purchases of tools, expensive paint, farm equipment and cars,  the non-profit suffered $1.7 million in losses, not including the money spent on lawyers.

SS

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