The ACORN Embezzlement

We’ve all heard about the $1 million embezzlement a ACORN funds byWade Rathke’s brother (Dale). I will still never understand how this man is not in jail – even more now.

I never paid too much attention to the details of the embezzlement. Then yesterday “the memo” was released. Matthew Vadum has been exhaustively covering details of the ongoing ACORN scandal:

The advice from Elizabeth Kingsley of Harmon, Curran, Spielberg Eisenberg LLP came in the form of an eerily prophetic legal memo to ACORN dated June 19, 2008, the day before ACORN’s national board fired disgraced founder Wade Rathke.

If you have a few minutes the article ACORN’s Prophetic Lawyer is a worthy read.

This embezzlement was not just a run of the mill crook stealing corporate funds (our money for the most part).  This money was stolen from pension plans, ACORN Beneficial Association, or ABA and the ACORN Fund, a similar discretionary health care fund.

Minutes from a meeting ACORN held in Los Angeles last summer reveal a group then on the brink of financial collapse. “Currently owe over $800k to IRS,” the minutes note. “Haven’t paid medical bills of over $300k. We are essentially ‘broke’ nationally and lots of offices are struggling.”

If all of the money was paid back, why did they not have the money to pay medical bills? ACORN Fund, apparently had advanced a large amount of money to ACORN so the fund didn’t have the money to pay the medical bills.

There is the appearance, at least, that money was taken out of (or not paid back to) a fund established to cover employee health care costs in order to cover the cash shortfall caused by the embezzlement.

At least $215,000 of the embezzled funds were never paid back – “ABA decided to write this debt off as a gift to ACORN”. Of course ABA didn’t decide to write off this debt – Wade Rathke did.

This is the group that’s supposed to ‘protect’ employees right?

This is the group that pickets those evil rich people that ‘steal’ money from the poor? All the while the rich Rathke’s are stealing from truly poor people.

Interesting tidbit from last week:

Joel John Morris, of Bend was sentenced Monday by U.S. District Judge Michael W. Mosman to 24 months in prison to be followed by 36 months of supervised release. Morris pled guilty in May 2009 to one count of Embezzlement from an Employee Benefit Plan.

In all, Morris made eight illegal withdrawals from the pension plan totaling $269,000.

“Mr. Morris’ theft of his own employees’ retirement funds was unconscionable,” said Kent S. Robinson, the Acting United States Attorney for the District of Oregon. “This case should send a message that prison is waiting for any corporate executive who illegally raids the company’s pension plan.”

This investigation was conducted by the U.S. Department of Labor – Employee Benefits Security Administration and was prosecuted by Assistant U.S. Attorney Craig J. Gabriel.

Really……………so where is the jail time for the Rathke brothers? Where’s the justice for the ACORN employees that are victims of this crime?

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5 Comments

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5 responses to “The ACORN Embezzlement

  1. gloucesterontheditch

    There is embezzlement but there is also the character of fiduciary breach of trust. The lawyer just retained from Boston, the former Massachusetts AG, will be tidying these matters as best he can to protect the officers, directors and culpable conspirators from the characterization of the Rathke’s malfeasances.

    Pension funds, Insurance funds, IRS Trust fund withholdings, and various types of other funds take on meaning with explicit specificity and attendant remedy for wrong doing.

    There are penalties ranging as high as 300% for certain occupations who violate fiduciary, confidentiality and privilege engagements or responsibilities. Lawyers who misuse trust money are probably the most woefully punished.

    Accountants don’t fare too well for intentional wrong doing.

    I am reminded of liberal gadfly Geraldine Ferraro’s husband’s fiduciary embezzlement from client trust funds to finance Ms. Ferraro’s election campaign. The liberal establishment was quick to absolve that fiduciary breach on the basis that Ferraro had replaced the money he took with a Note Payable to repay the ‘loan.’ He even repaid the pilfered money–probably as a result of Mrs. Ferraro’s rise to prominence amongst the liberati. It is not possible for a lawyer to borrow or comingle client trust funds. He should have gone to prison. She too.

    There is no dispute or even doubt that criminal acts have occured across the ACORN expanse. Many of those misappropriations have non criminal remedies but some will require prison sentences in addition to restitution.

    The documents that Matt Vadum has launched have been around for awhile and are suspect. It concerns me that they have been widely purported and how that will impact the proceedings from a prosecutorial stand point.

    I would absolutely love to be a part of the audit and investigation of these outfits but my best guess is that Justice will do their part, IRS will do theirs, Treasury will do theirs and the various U.S. Attorneys will be administrative facilitators.

    What is needed, somewhere, is a pugnacious, scrap yard dog of a prosecutor to slurp from carnage of Rathke and his very intimate cadre of conspirators.

    All together, more good news for Friday and the start of a nippy fall weekend. It won’t be nearly so chilly in hell were ACORN and its creeps will surely find their way.

    • speakmymindblog

      It’s funny you bring up fiduciary – I didn’t think anyone knew that word anymore…………In my ‘real’ life of real estate – I’m always amazed when I bring up fiduciary in a meeting and then have to explain what it means!

      You have alot more faith in the system than I do. You’re right, this information has been floating around for over a year now. More importantly than how it will impact the investigation – why wasn’t there already an investigation?

      Clearly, the damning information in circulation regarding ACORN is much worse than a fake pimp and prostitute………….

      • gloucesterontheditch

        In an earlier life, I spent a short time as controller for a real estate brokerage, property management firm in the metro DC area. Real property transactions can become very detailed with intricacy and administration but suffice to say that comingling funds was a matter of severe gravity.

        In Maryland, firms were subject random audits and inspections of escrow accounts and a violation was treated severely–the broker or realtor’s license was removed from the wall and business was ended, instantly.

        At one point, the end point of my involvement with the firm, I was ordered to certify, as a fiduciary, a court required receivorship statement on a property in Dallas which I had never seen nor audited any financial records. I declined to sign them until I had at least seen the bank statements! But, they would hear none of that I and left that employment the way it began, fired with enthusiasm 🙂

        FWIW, I see comingling violations all the time though lawyers tend to be more cautious than some with trust funds.

        ACORN has evidently comingled every manner of funds in every manner imaginable. AG Holder has been requested to commence a RICO investigation by Sen. David Vitter, R-La, another adulterous hyprocrite still in elected office.

        Whoever Cara was ought to have enough volition to make a case for asking anyone to following a link to whatever propaganda site will ‘open your mind.’

        Rainy and ugly in communist occupied Massachusetts.

  2. Most likely you will not approve this comment, but it does not hurt to try… Open up your mind and see the big picture…
    I Work For ACORN – http://tdaait.wordpress.com/2009/10/01/i-work-for-acorn/

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