Thomas Nelson, who embezzled about $900,000 from the social service agency he led for more than 20 years, filed for bankruptcy twice in the 1990s and told a close friend years ago that he had a gambling problem.

Don Gean, who runs the York County Shelter Program, said Nelson mentioned the gambling problem early in their personal and professional friendship, which began when Nelson took the top job in the York County Community Action program.

“I knew that he had a bit of a problem with gambling,” Gean said Wednesday. “We had discussions about that, and the end of the discussions was, ‘That’s behind me.’ “

Nelson pleaded guilty in federal court Tuesday to stealing about $900,000 over eight to 10 years from York County Community Action. The social and health services agency, which operates most of the low-income and poverty programs in York County, has an operating budget of about $20 million a year, with most of its money coming from the federal government.

According to documents filed in court, some of the money Nelson took went to pay off credit card bills he racked up at “racetracks and other facilities where gambling is allowed.”

Nelson’s sentencing has been set for Oct. 30. He has agreed to pay $1.2 million in restitution to the Sanford-based agency and $150,000 to the Internal Revenue Service, for failing to report all of his income on his tax forms.

Joseph Goff, the lawyer who represents York County Community Action, said the agency has insurance that protects it from theft and embezzlement and will recover a “substantial” amount of money from that policy.

Gean said Nelson didn’t lead a lavish lifestyle, and any discussion of his personal activities suggested he spent most of his free time with family members.

Nelson has no children, he said.

In the 20 years he knew Nelson, Gean said he never saw anything that indicated the gambling problem had resurfaced, such as a lottery ticket or a racetrack betting slip.

He said money never seemed to be in the forefront of Nelson’s mind. “When you went to lunch with him, it was a toss-up who was going to pay because he never had any money,” Gean said.

Nelson bought an old Volkswagen Beetle from Gean for $1,200, Gean said, and needed several months to pay the full amount.

“If he said he was going somewhere (on a weekend or vacation), it was to visit his family in New Hampshire,” Gean said. “I can’t recall that he ever went off and came back with exotic stories” about what he had done.

Gean described Nelson as “very bright,” and said Nelson told him he went to work for a community services program in New Hampshire right out of high school, rising to assistant director before taking the job at York County Community Action.

He recalls seeing Nelson regularly reading the summary of the Federal Register, which includes arcane rules for new federal programs.

“His commitment to getting services to poor people was unequaled,” Gean said, and the embezzlement “doesn’t fit” with the person he knew.

Court records indicate that Nelson filed for bankruptcy twice. A filing in 1990 was “dismissed for other reasons” after three years. A filing in late 1994 was resolved in April 1995, after a “standard discharge” of the consumer debt he owed.

Records indicating how much Nelson owed were not available Wednesday.

According to documents in the criminal case, Nelson embezzled the money by issuing payments from his agency to a consulting company, which then issued some of the money to Nelson or paid his mortgage.

David Joyce, an assistant U.S. attorney, declined to identify the company or say whether it faces charges.

Nelson also funneled money through the New England County Community Action Association, which stopped operating in 2005.

Nelson was treasurer of the regional association. After York County Community Action’s money was sent to the association, Nelson said, he used it to pay personal expenses, including the credit card bills.

Barbara Crider, who replaced Nelson as the agency’s executive director when he resigned abruptly in February 2010, said the money that Nelson stole didn’t include federal funds used for client services.

She said it was “corporate resources” — reserves or fees that the agency collected

Although services weren’t affected, she said, “it deprived us of the opportunity … to put those funds to a more productive use.”

Crider said she didn’t recall Nelson giving a reason for resigning. She said he cooperated in the transition of the agency’s leadership to her.

York County Community Action became aware of the problem in June 2011, she said, when the U.S. Attorney’s Office said it was investigating Nelson’s activities as executive director.

Federal authorities got involved because the agency kept its money in an account into which federal funds were deposited.

After leaving York County Community Action, Nelson reportedly took over as executive director of Rockingham County Community Action in New Hampshire and continued working there even after agreeing in March to plead guilty to the embezzlement in Maine.

Nelson has been accused of no wrongdoing in New Hampshire. Messages left for officials at the Portsmouth-based agency were not returned Wednesday.

Members of York County Community Action’s board of directors could not be reached Wednesday, or declined to comment.

Donna Deletetsky, the board’s vice president, said her colleagues agreed that all questions should be directed to Crider.

In a statement obtained by Foster’s Daily Democrat of Dover, N.H., the directors said, “Through his actions, YCCAC’s former Executive Director betrayed the trust placed in him by the board, and compromised the organization’s ability to invest in and support initiatives that would have helped our clients.

“Certainly, the organization deeply regrets and shares with the community a sense of anger that those funds were not available for enhancing services to clients,” the statement said.

Nelson, 56, got divorced about 18 months ago and is now living in Berwick, said his lawyer, Jeffrey Silverstein of Bangor. A message left at Nelson’s home was not returned Wednesday, and his cellphone is no longer in service.

Gean said that when he heard in 2010 that Nelson had resigned from York County Community Action, he immediately called him and left a message, to ask him what was going on.

“And I did that maybe 46 more times” and never got a response, Gean said.

“It doesn’t make sense,” he said. “It’s a loss to everybody. Nobody wins in any of this and our whole field looks like we were painted a bad color.”

Staff Writer Edward D. Murphy can be contacted at 791-6465 or at:

emurphy@pressherald.com

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