Legal Newswire – New York Charity Director Charged With Defrauding Charity – US Attorney Announcement

LawFuel Legal Announcement Service – MICHAEL J. GARCIA, United States Attorney for the
Southern District of New York, and RONALD J. VERROCHIO,
Inspector-in-Charge of the New York Office of the United States
Postal Inspection Service (“USPIS”), announced today the charges
against THOMAS M. KELLY, the former Executive Director of
Community for Education Foundation (“CEF”), a New York based
charity, in connection with two schemes to defraud CEF of over
$90,000. According to the Complaint unsealed today in Manhattan
federal court:

CEF is a non-profit corporation that was founded in
1992. CEF’s purpose is to assist children ages five to 18 years
with the development of life management skills like the ability
to communicate effectively, set goals, and make decisions. To do
this, CEF provides curriculum materials, training, and support to
public schools throughout the United States.

KELLY was employed as CEF’s Executive Director from
2005 until he was fired on or about March 31, 2008. As Executive
Director, KELLY was responsible for CEF’s day-to-day management,
including supervision of its finances and the sales of its
educational products and services to school districts nationwide.
KELLY reported to CEF’s founder and Chairman of the Board (the
“Founder”) and to CEF’s Board of Directors (the “Board”).

KELLY engaged in two schemes to defraud CEF out of over
$90,000. As a part of the first scheme, KELLY established an
entity known as “Downtown Jersey City Scholarship Fund” (“DJCSF”)
which he falsely represented was a part of CEF. KELLY then used
DJCSF to solicit and receive donations totaling approximately
$52,481 that KELLY deposited into a bank account that he opened
in the name of “Community for Education Foundation/Downtown JC
Scholarship Fund” (the “DJCSF Account”). KELLY then diverted
much of the donated money to his personal use.

The second scheme involved the diversion by KELLY of
approximately $53,100 that a public school district outside of
New York State (the “School District”) paid to CEF for certain
educational materials. In October 2007, the School District
placed an order for CEF’s curriculum materials to use in schools
within School District. KELLY never reported the School
District’s order to the Founder and the Board, but instead
provided the School District with instructions to wire payment
into the DJCSF Account he controlled rather than to CEF’s
legitimate checking account. In January 2008, the School
District wired approximately $44,100 into the DJCSF Account. In
addition, KELLY deposited a $9,000 check sent by the School
District into the DJCSF Account.

A total of approximately $117,159 was deposited into
the DJCSF Account. Of this amount, KELLY withdrew approximately
$46,500 in checks made payable to himself and diverted an
additional approximately $45,000 by issuing a check to an

KELLY is charged with one count of mail fraud and one
count of wire fraud. KELLY, 51, a resident of Jersey City, New
Jersey, faces a total maximum sentence of 40 years’ imprisonment
if convicted.

KELLY surrendered to the USPIS this morning and will be
presented later today in Manhattan federal court before United
States Magistrate Judge GABRIEL W. GORENSTEIN.
Mr. GARCIA praised the work of the USPIS and said the
investigation is continuing.

This case is being prosecuted by the Office’s Major
Crimes Unit. Assistant United States Attorney JOSEPH P.
FACCIPONTI is in charge of the prosecution.
The charges contained in the Complaint are merely
accusations and the defendant is presumed innocent unless and
until proven guilty.
08-240 ###

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