Accountant Accused of Stealing Nearly $780,000 from Harvard Hillel
Man who helped manage organization's finances indicted late last week for alleged multi-year fraud
July 07, 2009
Harvard Hillel was the victim of an alleged fraud scheme that, according to a statement issued Monday by the Massachusetts Attorney General's Office, robbed the Jewish student organization of nearly $780,000 between 2003 and 2008.
William O'Brien, a Hillel accountant contracted from New England financial management firm Insource Services, is accused of having "stolen significant sums of money through fraud" after Hillel discovered financial reporting irregularities in early 2008, according to a letter sent on Monday to the organization's student community from Hillel President and Director Bernard Steinberg and Chair of the Board of Directors Robert Beal. They wrote that Hillel immediately terminated the Insource contract after discovering the irregularities and has worked with the state Attorney General's office for over a year to investigate the parties responsible.
The statement released on Monday by the Attorney General's Office said that O'Brien, a 58-year-old resident of Framingham, Mass., allegedly stole nearly $780,000 for personal use while working as a contracted financial manager for a non-profit religious organization affiliated with a local university. A Middlesex Grand Jury charged him late last week with forgery, uttering, 11 counts of larceny over $250, 2 counts of larceny by continuous scheme, and 5 counts of failure to file income tax returns, according to the release.
Uttering refers to the use or circulation of bills or documents known to be counterfeit with the intent to defraud.
Melissa Monahan, a spokeswoman contracted by Hillel to handle press inquiries about the fraud, confirmed that the organization cited in the Attorney General's release referred to Harvard Hillel. She said that there was "no delay in [Hillel's] taking the appropriate course of action" upon discovery of the irregularities, and that Hillel immediately hired legal counsel to explore possible responses. Lawyers had advised Hillel not to make the discoveries known to the public until now in order to avoid compromising the Attorney General's investigation, she said.
Hillel had $8.2 million in net assets as of June 30, 2007, according to its most recent publicly available tax filings. That year, Hillel took in nearly $3 million in total revenue while fielding nearly $2 million in expenses.
Monahan said that Hillel has "not been forced to curtail programs or services as a result of this fraud," and that there are no plans to do so at this point in time "due to the fraud or due to the economic crisis."
Harry J. Pierre, a spokesman for the Attorney General's Office, said that O'Brien, who prepared and documented bill payments for the non-profit organization but did not have signatory power over writing checks, allegedly diverted money from the organization's banking account to his own personal account. Pierre said that the organization had used an American Express corporate credit card to pay various expenses, and that the organization's director became aware of the irregularities when American Express called and notified him that the organization's account would be closed due to missed bill payments.
Pierre said that the Attorney General's Office was notified of the fraud by Hillel in Oct. 2008 and began its investigation that month. According to the press release, investigators uncovered a second fraud scheme in which O'Brien allegedly wrote and deposited checks from the organization into another account he had created, money that he then used for personal expenses such as tickets for trips and sporting events.
Insource had been contracted by Hillel in 2000 to handle its accounting and bill paying duties, and O'Brien was hired by Insource in 2003 to oversee those day to day financial tasks, the release stated.
At this time, O'Brien has been indicted but not arrested, Pierre said, adding that O'Brien will be arraigned in Middlesex Superior Court at a to-be-determined date. There, he will appear before a judge to face charges and enter a plea of guilty or not guilty. Pierre said that the Attorney General's Office has not yet received any communications from an attorney representing O'Brien.
According to Pierre, O'Brien faces a maximum penalty of 13 felonies, each carrying a maximum sentence of five years in state prison, along with five misdemeanors, each carrying a maximum sentence of 2.5 years in a house of corrections. While the sentence could aggregate to nearly 80 years of jail time, Pierre said a judge will ultimately determine how the sentences are distributed.
The announcement follows months of rumors that Hillel was facing financial difficulties. When asked in January about such rumors, Steinberg vehemently denied that the organization was facing fiscal hardships beyond those caused by the economic downturn, saying that "there is no story" and that discussions about the rumors and Hillel's finances were "totally inappropriate."
Steinberg did not respond to requests for comment left at his home and Hillel office on Monday evening and Tuesday morning.
In their letter sent on Monday, Steinberg and Beal added that Hillel's attorneys are continuing to press civil suits to recover the stolen amounts and that a team of financial experts has been commissioned by Hillel to review the organization's financial procedures and protocols.
"With this guidance, we have strengthened our business processes, internal controls and oversight of all financial transactions in order to safeguard the assets of the organization and prevent similar situations from occurring in the future," they wrote.
Monahan and Pierre declined to say if any money has been recovered thus far, citing the ongoing investigation and legal actions.
The alleged Hillel fraud is not the first time that money has been embezzled at Harvard in recent years. Between 2000 and 2001, two undergraduate officers at the Hasty Pudding Theatricals stole almost $100,000 from the organization, and between 1988 and 1994, a financial officer at Harvard Magazine, the University's alumni publication, embezzled $190,000.
June Q. Wu contributed to the reporting of this article.
—Staff writer Peter F. Zhu can be reached at pzhu@fas.harvard.edu.
William O'Brien, a Hillel accountant contracted from New England financial management firm Insource Services, is accused of having "stolen significant sums of money through fraud" after Hillel discovered financial reporting irregularities in early 2008, according to a letter sent on Monday to the organization's student community from Hillel President and Director Bernard Steinberg and Chair of the Board of Directors Robert Beal. They wrote that Hillel immediately terminated the Insource contract after discovering the irregularities and has worked with the state Attorney General's office for over a year to investigate the parties responsible.
The statement released on Monday by the Attorney General's Office said that O'Brien, a 58-year-old resident of Framingham, Mass., allegedly stole nearly $780,000 for personal use while working as a contracted financial manager for a non-profit religious organization affiliated with a local university. A Middlesex Grand Jury charged him late last week with forgery, uttering, 11 counts of larceny over $250, 2 counts of larceny by continuous scheme, and 5 counts of failure to file income tax returns, according to the release.
Uttering refers to the use or circulation of bills or documents known to be counterfeit with the intent to defraud.
Melissa Monahan, a spokeswoman contracted by Hillel to handle press inquiries about the fraud, confirmed that the organization cited in the Attorney General's release referred to Harvard Hillel. She said that there was "no delay in [Hillel's] taking the appropriate course of action" upon discovery of the irregularities, and that Hillel immediately hired legal counsel to explore possible responses. Lawyers had advised Hillel not to make the discoveries known to the public until now in order to avoid compromising the Attorney General's investigation, she said.
Hillel had $8.2 million in net assets as of June 30, 2007, according to its most recent publicly available tax filings. That year, Hillel took in nearly $3 million in total revenue while fielding nearly $2 million in expenses.
Monahan said that Hillel has "not been forced to curtail programs or services as a result of this fraud," and that there are no plans to do so at this point in time "due to the fraud or due to the economic crisis."
Harry J. Pierre, a spokesman for the Attorney General's Office, said that O'Brien, who prepared and documented bill payments for the non-profit organization but did not have signatory power over writing checks, allegedly diverted money from the organization's banking account to his own personal account. Pierre said that the organization had used an American Express corporate credit card to pay various expenses, and that the organization's director became aware of the irregularities when American Express called and notified him that the organization's account would be closed due to missed bill payments.
Pierre said that the Attorney General's Office was notified of the fraud by Hillel in Oct. 2008 and began its investigation that month. According to the press release, investigators uncovered a second fraud scheme in which O'Brien allegedly wrote and deposited checks from the organization into another account he had created, money that he then used for personal expenses such as tickets for trips and sporting events.
Insource had been contracted by Hillel in 2000 to handle its accounting and bill paying duties, and O'Brien was hired by Insource in 2003 to oversee those day to day financial tasks, the release stated.
At this time, O'Brien has been indicted but not arrested, Pierre said, adding that O'Brien will be arraigned in Middlesex Superior Court at a to-be-determined date. There, he will appear before a judge to face charges and enter a plea of guilty or not guilty. Pierre said that the Attorney General's Office has not yet received any communications from an attorney representing O'Brien.
According to Pierre, O'Brien faces a maximum penalty of 13 felonies, each carrying a maximum sentence of five years in state prison, along with five misdemeanors, each carrying a maximum sentence of 2.5 years in a house of corrections. While the sentence could aggregate to nearly 80 years of jail time, Pierre said a judge will ultimately determine how the sentences are distributed.
The announcement follows months of rumors that Hillel was facing financial difficulties. When asked in January about such rumors, Steinberg vehemently denied that the organization was facing fiscal hardships beyond those caused by the economic downturn, saying that "there is no story" and that discussions about the rumors and Hillel's finances were "totally inappropriate."
Steinberg did not respond to requests for comment left at his home and Hillel office on Monday evening and Tuesday morning.
In their letter sent on Monday, Steinberg and Beal added that Hillel's attorneys are continuing to press civil suits to recover the stolen amounts and that a team of financial experts has been commissioned by Hillel to review the organization's financial procedures and protocols.
"With this guidance, we have strengthened our business processes, internal controls and oversight of all financial transactions in order to safeguard the assets of the organization and prevent similar situations from occurring in the future," they wrote.
Monahan and Pierre declined to say if any money has been recovered thus far, citing the ongoing investigation and legal actions.
The alleged Hillel fraud is not the first time that money has been embezzled at Harvard in recent years. Between 2000 and 2001, two undergraduate officers at the Hasty Pudding Theatricals stole almost $100,000 from the organization, and between 1988 and 1994, a financial officer at Harvard Magazine, the University's alumni publication, embezzled $190,000.
June Q. Wu contributed to the reporting of this article.
—Staff writer Peter F. Zhu can be reached at pzhu@fas.harvard.edu.
