A federal judge Monday approved an agreement to restore some of the money believed to have been embezzled by the founder of a Maine charity who committed suicide while under investigation for fraud.
At the time of his death on Feb. 27, Marcel “Marc” Badeau, chairman of the Gorham-based nonprofit Operation Tribute, was accused of siphoning off hundreds of thousands of dollars that he told donors was intended for holiday gifts for the children of military families.
Under terms of the agreement approved by U.S. District Judge John A. Woodcock Jr., Badeau’s widow, Margherita Badeau, paid $41,000 to retain the couple’s house at 41 Dewayns Way in Gorham, which her husband bought in part with $138,000 in stolen money, according to court records.
GOVERNMENT CASE RESOLVED
The judge also ordered that nearly $34,000 in cash and bank accounts controlled by the Badeaus be forfeited and more than $10,000 in a bank account in Operation Tribute’s name be returned to the charity.
The order does not automatically put the $41,000 and $34,000 into Operation Tribute’s coffers for charitable donations, but allows the organization to petition the federal government to have the forfeited money returned, court records say.
Margherita Badeau was never charged criminally in the fraud investigation conducted by the FBI, which began last year.
Her attorney, Peter DeTroy, said Monday’s decree effectively resolves the government case.
“This was a product of a negotiation with the government and with Operation Tribute, and she’s just pleased for herself and for the organization that they can put this behind them,” DeTroy said.
Richard Berne, the attorney for Operation Tribute and its board members, said the settlement does not guarantee the charity’s survival, since the organization depended on an executive director to run its day-to-day operations.
“It depends on whether they recruit an executive director capable of managing the charity effectively going forward. Alternatively, they will contribute the funds to a charity with a similar mindset,” Berne said.
The court filings indicate the Badeaus used donated money for themselves, including more than $230,000 in cash, $138,000 in mortgage payments, more than $25,000 for personal cars, nearly $24,000 for one of their children’s college tuition, and more than $7,000 at New Hampshire state liquor stores.
An affidavit filed by FBI Agent Richard Pires Jr. accused the Badeaus of using a side company, Top Shelf Collectibles, as the purchasing agent awarded a contract by Operation Tribute to acquire toys, books and other gifts for children. Of the $1.14 million raised by Operation Tribute from 2009 to July 2014, the charitable organization paid about 93 percent to Top Shelf Collectibles, the affidavit said.
In total, the Badeaus used $740,325 of that money to pay credit card bills, which included purchases of toys and gifts for the charity alongside personal expenses, according to the affidavit.
The FBI first applied for a search warrant of the Badeaus’ home on Dec. 18, and Marcel Badeau knew he faced the possibility of federal prison time when he killed himself.
EARLIER INVESTIGATION
Marcel Badeau was targeted in a similar FBI investigation in Massachusetts in 1998, when he was the chief financial officer of Cambridge Trust Co. and diverted about $670,000 of the company’s money to himself through false bank entries. He was convicted and sentenced in 1999 to serve 18 months in federal prison, long before he started Operation Tribute, Pires said in the affidavit. Assistant U.S. Attorney Donald Clark, who prosecuted the forfeiture proceeding, declined to comment on the case.
Operation Tribute’s federal tax form 990 for 2012, the most recent year available, lists Marc Badeau as the organization’s founder and chairman. The organization listed revenues of $476,771 for that year, and expenses of $463,740 for the “acquisition and distribution of gifts to the children of military families during the holidays.” None of the officers or board members received a salary, according to the form.
Scott Dolan can be contacted at 791-6304 or at:
Twitter: scottddolan
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