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Investigations

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Maine Man Sentenced for Embezzlement from a Federally Funded Program

On May 21, 2013, Thomas Nelson, former Chief Executive Officer, York County Community Action Corporation (YCCAC), was sentenced in United States District Court, Portland, Maine, to 30 months of incarceration, 36 months of supervised release, and ordered to pay $1,345,793.95 in restitution for conspiracy and embezzlement from a federally funded program, and tax evasion. Some of the embezzled monies were funded through the American Recovery and Reinvestment Act (ARRA).

YCCAC provides social service, health, educational, and transportation-related assistance to York County individuals and families living in poverty. From 2006 to 2010, YCCAC received in excess of $30,000,000 in federal funds to be used for those purposes, including approximately $7 million in Federal Transit Administration (FTA) grants. Some of the FTA grants, including those for the rural transit assistance program and urban transit assistance program, were authorized by ARRA.

The investigation disclosed that that from 2004 to 2010, Nelson embezzled approximately $900,000 from YCCAC. He diverted $413,000 to a consulting company that submitted only one invoice for $8,700. In exchange for the fraudulent payments, the consulting company kicked cash back to Nelson and paid more than $20,000 of Nelson's personal expenses, including his home mortgage. He also diverted more than $400,000 to a defunct non-profit entity, New England Community Action Agency (NECAA), and recorded those payments as donations or consulting expenses. After transferring these funds to NECAA, Nelson used more than $300,000 to pay personal credit card bills and his home mortgage, and to gamble, failing to report over $400,000 in embezzled income to the Internal Revenue Service (IRS). He also prepared and signed NECAA tax returns which suggested the agency had revenue and assets, when, in fact, it did not.

We investigated this case with the IRS, as well as the OIGs for the Departments of Health and Human Services, Housing and Urban Development, and Agriculture.