Wednesday, June 19, 2013
By Ann S. Kim email@example.com
PORTLAND - The former head of a York County nonprofit that provides services to low-income residents admitted in federal court Tuesday to embezzling $900,000 from the agency and using stolen funds to pay off gambling debts, his mortgage and other personal expenses.
Thomas Nelson, 56, of Alfred pleaded guilty to embezzlement from a federally funded organization, conspiracy, six counts of tax evasion and two counts of signing a false tax return.
He faces imprisonment of up to 10 years for the embezzlement, five years each for the conspiracy and tax evasion charges and three years each for the false tax returns he signed.
The date of his sentencing hearing has not yet been set.
Nelson agreed to pay restitution of $1.2 million to the York County Community Action Corp. and $150,000 to the Internal Revenue Service as part of his plea agreement. He also agreed that he would not appeal any sentence of up to 30 months.
Nelson was executive director of the Sanford-based social service agency for 21 years, until he left in February 2010.
From 2005 to 2009, Nelson arranged overpayments to an unnamed consulting company that provided him with kickbacks, according to a document submitted by Assistant U.S. Attorney David Joyce.
From 2004 to 2010, he diverted agency money to a defunct nonprofit for which he had been treasurer, the document said.
Until recently, Nelson was executive director of Rockingham Community Action in New Hampshire.
Nelson offered only brief responses to procedural questions from U.S. District Judge Nancy Torresen. He declined to comment to a reporter.
His lawyer, Jeffrey Silverstein, said after the hearing that Nelson was not using the money to buy luxury items or take big trips but would not elaborate further.
"He will be accepting responsibility in a public way" at his sentencing, Silverstein said.
Nelson had been treasurer of the New England Community Action Association, a nonprofit organization that has not been active since at least 2005. He transferred money from the York County agency to the defunct organization and used the funds to pay his mortgage and credit card bills. Many of the charges were from racetracks and other gambling spots not named in the government document.
According to the document, Nelson told federal investigators last year that he avoided diverting federal money the York County agency had received because he knew government funds are subject to greater scrutiny. He recorded the payments from the York County Community Action Corp. to the defunct nonprofit as donations, consulting or other expenses and sometimes forged an employee signature on checks.
The government document also provided some details about the conspiracy. Nelson transferred $413,000 to "Consulting Company A" over a four-year period, but only one invoice for $8,700 was ever submitted, in 2006.
The company paid at least $21,808 of Nelson's personal expenses, sometimes with checks made out to Nelson and his mortgage servicer within days of the company receiving agency funds.
In the courtroom were Barbara Crider, executive director of York County Community Action Corp., and Joe Groff, a lawyer for the agency. They gave reporters a statement that said upon learning that Nelson was under investigation, the agency's board of directors reviewed its financial oversight practices and added safeguards.
The organization said no charges are expected against any of its other employees, past or present, and that it has been cooperating with investigators.
"The board is very disappointed. The board shares the disappointment I'm sure the community feels," Crider said after the proceeding. "The focus is absolutely on moving forward."
Groff said he hopes insurance will cover a substantial portion of the losses.
The agency serves poor populations through heating assistance, Head Start, health-care and other services.
Staff Writer Ann S. Kim can be contacted at 791-6383 or at: