ATLANTA, Georgia; COUPEVILLE, Washington; SANDSTONE, Minnesota; RICHMOND, Virginia––Is the humane community really afflicted by more embezzlement lately than ever before? If so, why?
Or are more embezzlers getting caught, sooner?
The ANIMALS 24-7 archives indicate that about one prosecuted case of embezzlement per year involving an animal shelter, sanctuary, sterilization clinic, or animal advocacy organization came to light during the 25 years preceding 2014, but four major cases were before the courts in the first six months of 2014.
That would probably be just the “tip of the iceberg,” since charities typically try to resolve embezzlement cases internally, rather than risk donor confidence by allowing them to come to light. History shows, however, the donors are much more forgiving of embezzlement brought to light and prosecuted than of embezzlement swept under the rug for a time, only to come to light later.
The four current cases illustrate several of the many different ways in which embezzlement can occur: through an executor mishandling an estate, through a staff member mishandling a special fund, through co-mingling of assets by a founder who invested her own money into starting the charity but failed to keep clearly separated accounts, and through faulty bookkeeping for an entire organization.
Former attorney Douglas Saar, 40, is expected to go to trial later in 2014 for allegedly embezzling from the estate of the late Jean Froman. Froman left her estate, of estimated $550,000 value, to the Whidbey Animal Improvement Foundation. WAIF operates the community shelters serving Island County and the city of Oak Harbor, plus cat shelters in Oak Harbor and the town of Freeland.
The Froman bequest would have enabled WAIF to complete a $3.8 million new shelter, for which fundraising, site improvements, and preliminary work have been in progress for nearly 15 years. But WAIF board president Bob Rupp told South Whidbey Record staff reporter Jessie Stensland that the organization now expects to receive only about $140,000.
Wrote Stensland, “Saar allegedly took about $180,000 from the Froman estate, according to Rupp and Cindy Wilbert, the treasurer for WAIF.”
Saar in April 2014 pleaded “not guilty” in Island County Superior Court to four counts of theft in the first degree, one count of theft in the second degree, and nine counts of money laundering.
Saar in June 2013 pleaded guilty to embezzling $99,000 from another estate he represented. “A 60-day sentence was converted to 30 days of electronic home detention and 240 hours of community restitution,” said Stensland.
Boggs Mountain debacle
In Georgia, former Boggs Mountain Humane Shelter director Lowanda “Peanut” Kilby was on May 31, 2014 sentenced to 15 years in prison, followed by 10 years on probation, for 29 counts of theft, plus a violation of the Georgia Racketeer Influence & Corrupt Organizations Act.
“Superior Court Judge Russell ‘Rusty’ Smith also ordered Kilby, 53, to pay $5,050 in restitution to Boggs Mountain, plus a $30,000 fine, and to complete 1,000 hours of community service,” wrote Blake Spurney of the Clayton Tribune. “A special condition of her probation prohibits her from entering a casino. Kilby set up PayPal accounts that deposited more than $10,000 into personal accounts,” summarized Spurney of earlier trial testimony, “and she gambled more than $250,000 between 2010 and July 2012,” when the funding diversions were explosed by employee Lynne Cousins, who took a dossier on Kilby’s activities to WAGA-TV, Fox 5 in Atlanta.
Explained Fox 5 I-Team reporter Randy Travis, “Two years ago, the Boggs Mountain Humane Shelter was considered a shining light in the rescue community. Hundreds of unwanted or difficult pets from across the Southeast were brought to tiny Clayton, Georgia, and [were believed to be] ultimately placed in new homes across the country. Supposedly, if a donor paid at least $100, that would guarantee a dog or cat would not be euthanized. Instead, we discovered the dogs or cats were secretly euthanized anyway, their original owners fooled into thinking they had been adopted.”
More trouble under new name
The Boggs Mountain Humane Shelter closed on October 31, 2012, after donations crashed following the Fox 5 exposé, but re-opened in 2013 as Rabun County Paws 4 Life.
Rabun County Paws 4 Life shelter director Justin Alexander Willis, 34, was in May 2014 arrested after a traffic stop for possession of marijuana and possession and use of drug paraphernalia. The situation became more complicated, Craig Salmon of Sky 104 reported, after Rabun County sheriff’s deputies “met with a victim in reference to an alleged verbal dispute and false imprisonment at the Paws 4 Life Shelter.”
The deputies were told, Salmon continued, that “Willis repeatedly cursed at the victim,” a Paws 4 Life employee, “and at one point locked the door to the room that held himself and the victim and would not let the victim unlock the door. The victim thought those actions were related to Willis’ recent arrest.”
However, Salmon continued, “The victim did not wish to press charges at this time. The word from the Board of Directors of Paws 4 Life is that Willis has been placed on administrative leave.”
Six former employees of the Wildcat Sanctuary in Pine County, Minnesota, on May 6, 2014 “filed a whistleblower lawsuit contending they were fired or forced to resign after they reported illegal activities to the organization’s board of directors,” reported Kevin Giles of the Minneapolis Star Tribune.
Explained Giles, “Five firings and a forced resignation came after employees revealed that executive director Tammy Thies was spending money donated to the nonprofit sanctuary for her house, dogs, and other personal uses, the lawsuit alleges. The suit also alleges that the sanctuary and Thies violated Minnesota wage laws and that plaintiffs were defamed in public statements made by Thies and board members.
“The suit comes just weeks after a Minnesota attorney general’s report confirmed Thies had spent thousands of dollars in sanctuary funds for personal use despite earlier public denials by board members Gail Plewacki, Peggy Callahan, and Sue Schmitt,” Giles continued.
In April 2014, according to Paul Walsh of the Star Tribune, the Wildcat Sanctuary board agreed in a settlement with the Minnesota state attorney general’s office to “hire an independent outside party for the next two years to monitor its business practices,” and Thies agreed to repay “all of the donations she misused for an array of personal items, services and taxes for her house, which is on the facility’s property. The largest reimbursements cover $4,900 for four years of cellphone service and $3,200 in propane to heat her home. She also had the sanctuary pay for her husband’s sky diving lessons.”
The Wildcat Sanctuary, opened in 1999 with 10 cats on 10 acres, “now is home to more than 100 lions, tigers, cougars, bobcats, and a host of other exotic species on 37 acres,” Walsh wrote. “The sanctuary has an annual budget of about $850,000, which includes staff salaries and the care and feeding of the wild cats.”
Operation Catnip of Richmond
In Richmond, Virginia, reported Bill McKelway of the Richmond Times-Dispatch, new board members of Operation Catnip of Richmond took allegations of financial wrongdoing to the New Kent Sheriff’s Office on March 29, 2014.
“The next day,” McKelway wrote, “Henrico County resident MaryBeth Andre was in jail on three counts of embezzlement, in a scheme that authorities believe reached nearly $20,000 over two years. New Kent Commonwealth’s Attorney J. Linwood Gregory stressed Tuesday that the investigation continues.”
Added McKelway, “Andre, 50, now released on bond, has held money-handling responsibilities at a major Richmond architectural firm and more recently as a fractional accounting manager at a finance firm. She is out of work and declined to comment when a reporter visited her bungalow-style home, valued at $117,500.”
Wills, Reitnauer, Brookwell & Ullrich
While more alleged embezzlement from animal charities appears to be before courts around the U.S. simultaneously than at any previous time on record, none of the current cases are even close in magnitude to the largest of previous decades.
David Wills, hired in 1972 to head the New Hampshire Humane Society, reportedly left in 1978 just before the board discovered that funds were missing. No one was ever charged over the missing money. Wills next was executive director at the Michigan Humane Society, 1979-1989, but resigned when the board began inquiring into the disappearance of $1.6 million. Bookkeeper Denise Hopkins was eventually convicted of embezzling $56,000 of the missing sum.
Wills next founded the National Society for Animal Protection, but dissolved it to become director of investigations for the Humane Society of the U.S.. Longtime Michigan Humane Society volunteer and employee Sandra LeBost of Royal Oak, Michigan, in June 1995 won a $42,500 judgement against Wills for nonrepayment of loans he solicited in connection with starting NSAP, but was never able to collect the money.
In August 1995, three HSUS employees sued Wills for alleged sexual harassment and embezzling. Suspended by HSUS soon afterward, Wills was fired in November 1995. Wills countersued the HSUS employees who sued him. Those cases were settled out of court in mid-1998.
In June 1999 Wills pleaded guilty to one count of embezzling $18,900 from HSUS between 1990 and mid-1995; agreed to pay restitution of $67,800 to HSUS; and accepted a six-month jail sentence. HSUS and the State of Maryland agreed to drop six other counts of embezzlement, alleging thefts of $84,128.
While the Wills prosecution was underway, Travis County judge Suzanne Covington in October 1997 ordered Texas Exotic Feline Foundation cofounder Gene Reitnauer to forfeit her home on the sanctuary grounds in Boyd, Texas, in partial payment of almost $1.8 million in punitive damages and costs of prosecution assessed against her by a jury trial. The jury ruled that Reitnauer, 48, unjustly enriched herself by spending $323,000 on permanent improvements to her personal property, including a swimming pool, and improperly used more than $121,000 in donations to TEFF for personal purposes including mortgage payments and income tax liens.
Reitnauer, who started TEFF in 1984 with her former husband Robert Reitnauer, held that the improvements were all for the benefit of the 64 big cats in her care.
Former SPCA/Los Angeles controller, vice president, and chief financial offier Kenneth Brookwell in May 2004 plea-bargained a two-year prison term for embezzling $940,000 from SPCA/LA between 1997 and 2002. Brookwell agreed to make restitution of nearly $500,000 to SPCA/LA, and to pay $138,000 to the California Franchise Tax Board for not reporting more than $730,000 in embezzled income on his tax returns.
The Wills, Reitnauer, and Brookwell cases, the largest before the courts in U.S. humane history, were much smaller combined than the multi-national Wolfgang Ullrich case. Ullrich, 58, head of the 230,000-member German animal welfare society Deutsches Tierhilfswerk from 1994 to 1999, was in April 2003 sentenced to 12 years in prison for embezzling $28 million, much of it donated to help animals in Romania.
Reported Reuters, “Thai police first arrested Ullrich, who ran a restaurant in the resort of Pattaya, after investigating him for tax evasion. Subsequent probes into his finances uncovered a front company Ullrich had set up in Switzerland, into which he channeled donations from animal lovers.”