SANFORD, Maine (NEWS CENTER) -- On Tuesday, the former Chief Executive Officer of the York County Community Action Corporation, Thomas Nelson, pled guilty in U-S District Court to an elaborate scheme which defrauded the nonprofit agency of nearly a million dollars.
Nelson admitted to federal investigators that he had been diverting money from the agency for 8 to 10 years, and used the embezzled funds to pay his mortgage, credit card balances and for extensive gambling debts.
While questions remain unanswered about how he was able to defraud the agency for so long, many people in the nonprofit community are concerned that his actions could have a chilling effect on other organizations that rely on the public's support, and trust, to help others.
"These things happen in all sectors of our economy, criminals perpetrate crimes, and when it happens to the nonprofit sector, I think we all feel violated," stated Brenda Peluso, director of public policy for the Maine Association of Nonprofits. "It really breaks the public's trust when something like this happens."
"We are glad that it was caught and stopped, and we hope there are some great lessons to be learned, you know, how to prevent this stuff in the future."
"We hope that the public doesn't lose trust in the sector over situations like this because, I believe, they are atypical," added Peluso. "The nonprofit sector is one of the most transparent sectors in our economy. There is a lot of financial and public reporting required. The fact that this can still happen shows that there are people out there who have a lot of energy and willingness to perpetrate these crimes and we have to stay vigilant."
Rick McCarthy, a senior advisor with the Maine Community Action Association which works with the 10 Community Action Programs in the state, says all of the community action programs have checks and balances in place to prevent and detect fraud. He says members met Wednesday for a regularly scheduled board meeting and discussed their protocols in light of the situation and will research if they need to make additional changes to prevent fraud in the future.
According to the current executive director of the York County Community Action Corporation, Barbara Crider, Nelson was held in high regard, but according to court documents, Nelson had an addiction to gambling which may have led him to start stealing from the agency.
The extent of the fraud, which according to Nelson's statement to federal investigators lasted 8 to 10 years and involved the embezzlement of hundreds of thousands of dollars, is staggering.
In a statement sent to NEWS CENTER by Barbara Crider, the investigation into York County Community Action Corporation was "thorough and exhaustive" and no other charges have been filed against former or current employees. Crider also says the agency is "troubled and saddened" by the news that Nelson misappropriated funds. She goes on to say Nelson "betrayed the trust placed in him by the board" and "compromised the organization's ability to invest in and support initiatives that would have helped our clients."
Thomas Nelson faces up to 10 years in prison and hundreds of thousands of dollars in fines after pleading guilty to charges including conspiracy, embezzlement from a federally funded program and tax evasion. As part of his plea agreement Nelson has agreed to pay $1.2 million dollars in restitution to the York County Community Action Corporation and 150-thousand dollars to the IRS. He is scheduled to be sentenced on November 7th.