A Sacramento nonprofit CEO has been charged with stealing $1.4 million from the organization through a fake company.
Richard Alan Abrusci, 45, of South Lake Tahoe, California, has been charged with nine counts of wire fraud, as well as with identity theft and unlawful monetary transactions, after his nonprofit, Goodwill Industries International Inc., detected suspicious activity and commenced an investigation into his actions.
According to its website, Goodwill is a 501(c)(3) organization that operates a chain of retail stores in California and Nevada, helping unemployed people.
According to court documents, Abrusci began working at the nonprofit in 2014. He became the Chief Operating Officer of the organization in 2016, and its president and CEO in 2018.
The charges state that from 2016 through 2021, Mr. Abrusci is alleged to have fraudulently caused the nonprofit organization and one of its subsidiaries to pay approximately $1.4 million to Resolution Arrangement Services (RAS). RAS was just a fake business founded by Mr. Abrusci in 2008. It had a bank account opened by him in his name in that same year.
Mr. Abrusci allegedly used various false documents, such as invoices and purchase orders, to cause Goodwill to pay a total of $1.4 million to RAS. In one instance, Mr. Abrusci is alleged to have forged a letter, making it appear as if it was from a lawyer known to Goodwill’s Chief Financial Officer, persuading the latter to pay $55,000 to RAS for an ongoing lawsuit.
Other payments to RAS were for supposed IT services and for assisting Goodwill in running call centers for the State of California during the COVID-19 pandemic. RAS did not perform most of these services, however.
Goodwill fired Mr. Abrusci in July, 2021. If convicted, he faces a maximum of 32 years in jail and millions of dollars in fines.
Other Cases
Also this month, a California man pleaded guilty to securities and wire fraud, as well as to obstructing a Securities and Exchange Commission (SEC) investigation into his conduct. This was in connection with his scheme to defraud investors by making false and misleading statements about the purported development of a new, blood-based COVID-19 test, leading to millions of dollars in investor losses.
Keith Berman, 70, of Westlake Village in Los Angeles County, California, was the CEO and sole director of Decision Diagnostics Corp., a public medical device company. In internal emails sent before the COVID-19 pandemic, he said that he needed a “new story” to “raise millions.” He had also spent hundred of thousands of dollars of the company’s money on personal expenditures, despite saying he was not enjoying any monetary benefit, according to a DOJ press release.
During 2020, he defrauded investors by stating his company had developed a new test that could detect COVID-19 from a tiny drop of blood taken from a person’s finger. Mr. Berman knew himself that such a test did not exist, but he told investors that the Food and Drug Administration (FDA) was close to granting his “test” an approval for emergency use authorization.
He went even further, creating a fake online profile to promote his test to investors on internet message boards, while at the same time opposing online criticism of it. This had the effect of misleading investors into believing the test was real. He also went online to threaten potential whistleblowers with civil or criminal sanctions.
Mr. Berman then obstructed a Securities & Exchange Commission investigation into his conduct, using another false online identity to direct an investor to write a series of false and threatening letters to the highest levels of SEC management, including the SEC Chairman.
He is scheduled to be sentenced on April 12, 2024, and faces a maximum penalty of 20 years in prison.
Fraud involving taxpayer money is also reported to have been widespread during the COVID-19 pandemic.
The Government Accountability Office (GAO) said in September that hundreds of billions of dollars worth of unemployment insurance (UI) payments handed over during the COVID-19 pandemic are estimated to have been fraudulent.
The GAO estimated that “the amount of fraud in unemployment insurance (UI) programs during the COVID-19 pandemic was likely between $100 billion and $135 billion. This is about 11 percent and 15 percent, respectively, of the total amount of UI benefits paid during the pandemic.”
The watchdog agency also said that “the full extent of UI fraud during the pandemic will likely never be known with certainty.”
The estimate covers the period from April 2020, when the first full month of payments for UI programs began, to May 2023, which marked the end of the COVID-19 public health emergency.
