Former Nonprofit Execs Plead Guilty to Embezzling Millions

August 17, 2017 by · Leave a Comment 

Three former executives of a once highly respected nonprofit group that provided counseling, job-training and placement to the homeless, unemployed and victims of domestic violence pleaded guilty Tuesday to embezzling millions of dollars from the organization that received varying amounts of financial support over the years from the city and county of Los Angeles.

Sophia Esparza, 65, the former CEO of the Chicana Service Action Center, faces the stiffest penalties under a plea deal with prosecutors. She pleaded guilty to five counts of misappropriating public funds, four counts of embezzlement, two counts of preparing false documentary evidence and one count of filing a false tax return.

Prosecutors said she operated the nearly five-decade-old nonprofit with a bogus board of directors and used embezzled funds for items such as luxury apartments, sports cars, a yacht cruise and season tickets to the Dodgers and Clippers. She is facing six years in prison when she is sentenced Oct. 25.

Meanwhile, Silvia Gutierrez, 71, the former chief financial officer for the group, pleaded guilty to six counts of embezzlement, four counts of misappropriation of public funds and two counts of preparing false documentary evidence. Thomas Baiz, 62, a former vice president of the nonprofit, pleaded guilty to three counts of embezzlement, two counts of misappropriation of public funds and one count of conspiracy to misappropriate public funds.

All three former executives were charged in 2015.

Chicana Service Action Center

A fourth defendant, former employee Michael Lorenzo Tompkins, was charged earlier this year and pleaded no contest to one count of embezzlement, according to the District Attorney’s Office.

Collectively, the four defendants will be ordered to pay $9 million to the Los Angeles County Department of Public Social Services and Community Senior Services, and $1.4  million to the city’s Economic and Workforce Development Department.

Esparza will also have to pay $103,000 to the state Franchise Tax Board, prosecutors said.

Gutierrez is expected to receive a four-year suspended sentence and spend a year on house arrest and five years on probation when she is sentenced Oct. 25. Baiz is facing a three-year suspended sentence, one year in jail and five years probation, along with 500 hours of community service.

Tompkins is facing three years in prison. Baiz and Tompkins are scheduled to be sentenced Oct. 26.

According to prosecutors, Gutierrez used embezzled funds to for personal bonuses, life insurance and personal expenses, while Baiz used the money for loans, vehicles and meals.

In the 1970s, the Chicana Service Action Center empowered women who “had not yet found our voice,” former supervisor Gloria Molina said in 2013, hoping to get her then board colleagues to continue contracting with the nonprofit after it was defunded over billing irregularities, which was said to have been corrected, and all monies owed to the County repaid.

“If they disappear, so will the empowerment of many, many young women,” Molina said at the time. Her motion failed to get a second and died without a vote.

Despite the county’s action, the City of Los Angeles continued to contract with the center for job placement and training services.

In January of this year, Los Angeles City Controller Ron Galperin issued a report strongly criticizing Economic and Workforce Development Department officials for failing to report the questionable activities involving the nonprofit, and for failing to provide adequate oversight going as far back as 2010. The city, which had contracted with the Chicana Service Action Center for over 25 years, awarded the center a new contract in 2014 to operate its WorkSource Center in Boyle Heights, one of 17 such centers in the city.

The charges shocked and saddened many in the community who had long held the organization in high esteem for its pioneering work to empower Latinas.

A 2015 editorial in this newspaper, called the then allegations “particularly devastating news to the women still alive who decades ago struggled mightily to get the organization off the ground so it could help empower Latinas by giving them job training and other resources as a way out of poverty and sometimes an escape from domestic abuse.”

Multiple readers responded with equal consternation, recounting how years earlier they had benefitted from services offered at the center.

EGP staff writers contributed to this story.

 

Chicana Service Action Center: So Disappointing If It’s All True

July 9, 2015 by · 2 Comments 

Reports Wednesday that administrators at a venerable charitable organization have strayed far from the organization’s mission to help the disenfranchised in Latino neighborhoods are hard to take.

Top executives of the Chicana Service Action Center are being accused by Los Angeles County prosecutors of embezzling taxpayer funds through a billing scam that allegedly allowed them to skim off more than $8.5 million to enrich themselves with fancy homes, cars, expensive trips, and other luxuries.

This is particularly devastating news to the women still alive who decades ago struggled mightily to get the organization off the ground so it could help empower Latinas by giving them job training and other resources as a way out of poverty and sometimes an escape from domestic abuse.

Francisca Flores, Chicana Action Service Action Center’s first Executive Director (not the president or CEO), was a dedicated leader who did without and lived in a small apartment on Mott Street in East Los Angeles so that other women would have a chance at a better life. The same can be said for the assistant director, who lived in an apartment in the San Fernando Valley, as well as  and many of the organization’s Latina board of directors who were deeply dedicated to the mission of helping women to help themselves and heir families.

Over the years, some of our nonprofit community based organizations have expanded and gained greater expertise, becoming large organizations with multi-million dollar budgets. Many of them are doing important and good work, helping people who have few resources to help themselves.

Sadly, however, today we see a growing trend in nonprofit community groups of blurring the lines between the needs of the community and the personal needs and egos of the organization’s staff and high powered boards of directors. The lines between investor owned corporations and public benefit community-based corporations and organizations have been clouded by the quest for personal power and financial gain and public image.

We’ve observed too many of our new generation of community leaders turn from being selfless to being selfish, which may be the case at the Chicana Service Action Center.

We have all heard of nonprofit executives and others who serve the public say they are entitled to big salaries and perks comparable to those in the private sector: We say, then go work in private industry.

We deeply hope, whether the allegations are proved true or not, that other charitable organizations and community groups will see this as a warning not to lose their sense of mission and dedication to community, or to become blinded by the profligate ways that access to large amounts of money can inspire.

Don’t get us wrong, we fully understand that this is not a phenomena unique to Latinos, but at this Hispanic, family-owned publication, it just hurts more.

 

Update: Corrected Francisco Flores to Francisca Flores.

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