LawFuel.com – 14 August, 2009 – PREET BHARARA, the United States Attorney for the Southern District of New York, and ROSE GILL HEARN, the
Commissioner of the New York City Department of Investigation
(“DOI”), announced that STAY THOMPSON, a/k/a “Stay Daniels,” was
found guilty yesterday evening of conspiring to commit mail fraud
and money laundering after an eight-day trial before United
States District Judge PETER K. LEISURE in Manhattan federal
court. The charges relate to a scheme to obtain more than
$100,000 worth of adoption subsidy payments from New York City to
care for needy children who did not in fact exist.
According to the Indictment and Complaint previously
filed in this case, as well as evidence presented at trial:
The Administration for Children’s Services (“ACS”) is
the New York City agency responsible for providing services to
needy children and their families. Among other things, ACS
administers payments to not-for-profit agencies that find and
provide child care subsidies to foster parents. ACS administers
approximately $42 million in monthly payments to not-for-profit
foster care agencies.
Concord Family Services, Inc. (“Concord”) was a notfor-
profit foster care agency that, from 1990 through 2008, was
paid by ACS to provide foster care services to needy children in
New York City. STAY THOMPSON was the fiscal director at Concord
and was responsible for, among other things, managing Concord’s
financial cash flow and interacting with the ACS to ensure
Concord’s proper funding. Subsequent to THOMPSON’s arrest in
this case, ACS stopped providing any foster services through
Concord.
Adoption Subsidy Scheme:
Since 2002 through his arrest in July 2008, NIGEL
OSARENKHOE, the Adoption Subsidy Supervisor at ACS, used his
position to authorize adoption subsidy payments to be made to coconspirators posing as adoptive parents who in fact did not adopt
any children (the “Adoption Subsidy Scheme”). An adoption
subsidy is a monthly payment mandated by New York State law to be
made for the care, maintenance, and medical needs of a child who
fits the definition of handicapped or hard-to-place. From
September 23, 2002, through April 4, 2006, OSARENKHOE caused
approximately $266,629 in fraudulent checks payable to his wife
to be mailed to OSARENKHOE’s prior residence.
Beginning in 2005, and continuing through her arrest in
this case, STAY THOMPSON received adoption subsidy payments
arranged by OSARENKHOE to care for four children who did not
exist. From December 20, 2005 through August 1, 2007, OSARENKHOE
fraudulently caused approximately $145,845 in adoption subsidy
payments to be mailed to THOMPSON. THOMPSON shared the monies
with OSARENKHOE and LETHEM DUNCAN, another ACS supervisor who had
introduced THOMPSON to OSARENKHOE.
THOMPSON was found guilty of mail fraud in connection
with her receipt of the adoption subsidy checks, and money
laundering in connection with her deposit of those monies into a
bank account at the Municipal Credit Union. The jury did not
reach a verdict on an embezzlement conspiracy charge.
THOMPSON, 44, faces a statutory maximum sentence of 30
years in prison and is scheduled to be sentenced on a later date.
Judge LEISURE ordered that THOMPSON’s bail be revoked and
remanded her into the custody of the United States Marshal
Service.
Five other individuals have previously been charged and
pleaded guilty in connection with this scheme. LETHEM DUNCAN
pleaded guilty on July 31, 2008, and NIGEL OSARENKHOE pleaded
guilty on January 20, 2009, to related charges.
As part of the fraudulent adoption subsidies for nonexistent
children scheme, TAMMY MOORE and OLETHA RHODES each
pleaded guilty to conspiracy to commit mail fraud on July 30,
2009, and July 31, 2009, respectively. BRENDA TOWE pleaded
guilty to mail fraud on August 6, 2009.
“Stay Thompson used her position to satisfy her own
greed by lying to the City and enriching herself with money
intended for children most in need,” said United States Attorney
PREET BHARARA. “Yesterday’s guilty verdict has exposed Thompson’s deceit for what it was – unscrupulous crime for which the jury has brought her to justice. I would like to thank the New York City Department of Investigation for their outstanding work on this case.”
DOI Commissioner ROSE GILL HEARN said, “This defendant
defrauded the City and betrayed its vulnerable children. She
participated in a scam to rake public funds into her pocketbook
by faking adoptions. The jury has called her to account. DOI
was pleased to work with the U.S. Attorney’s Office for the
Southern District of New York in this investigation, which has
already resulted in successful prosecutions of five other
defendants connected to this scheme.”
The prosecution is being handled by the Office’s Public
Corruption Unit. Assistant United States Attorneys DANIEL L.
STEIN and WILLIAM J. HARRINGTON are in charge of the prosecution.
