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[MM Curator Summary]: Wafa Abboud used her non-profit to steal $1.4M by hiding monthly “consulting” payments to herself.
Defendant and Co-Conspirators Used Multiple Schemes to Steal Over $1 Million from Non-Profit Agency Devoted to Assisting Developmentally Disabled Youth, Spending the Funds on Luxury Items
Earlier today, at the federal courthouse in Brooklyn, Senior United States District Judge Edward R. Korman sentenced Wafa Abboud to a term of imprisonment of 33 months. As part of the sentence, Judge Korman also ordered Abboud to forfeit $836,000 and pay $1,415,000 in restitution to Human First, Inc. (Human First), the nonprofit agency that Abboud led for more than five years. Abboud was convicted following a two-week jury trial in July 2019 of theft from programs receiving federal funds, bank fraud, and conspiracies to commit those crimes.
Breon Peace, United States Attorney for the Eastern District of New York, announced the sentence.
“Stealing taxpayer money earmarked for developmentally disabled youth to pay for vacations, cosmetic surgery, and luxurious vacations is shameful,” stated United States Attorney Peace. “Today, the defendant has been held accountable for betraying the most vulnerable among us whom she was entrusted to serve and treating the non-profit organization bank accounts as though they were her own.”
Mr. Peace thanked the Federal Bureau of Investigation, New York Field Office, for its investigative work on the case.
From January 2011 until her termination on May 27, 2016, Abboud was the Executive Director of Human First, a non-profit corporation that provided services to individuals with autism and other developmental disabilities. In that capacity, Abboud exercised nearly complete control over the charity’s finances. During Abboud’s tenure, Human First received tens of millions of dollars annually from the New York State Office for People with Development Disabilities, which is funded in significant part by the Medicaid program. The money was disbursed to Human First to support its mission of providing residential, rehabilitative, and other services to developmentally disabled youth.
Abboud entered into an agreement with co-defendant Marcelle Bailey whereby Abboud caused Human First to pay Bailey’s company MPB Management Services LLC (MPB) approximately $16,000 per month in purported “consulting” fees. Bailey deposited approximately half of each monthly disbursement into bank accounts that were controlled by Abboud, who used the money to fund a lavish lifestyle, including expensive international vacations, visits to luxury spas and high-end beauty salons and restaurants, and elective cosmetic surgeries. Abboud also withdrew approximately $120,000 from the accounts in cash and wired tens of thousands of dollars in the account overseas. In total, Abboud stole approximately $420,000 between May 2011 and February 2016 through the MPB embezzlement scheme.
Abboud also conspired with co-defendant Rami Taha to steal over $400,000 through a scheme in which Abboud deliberately issued overpayments to contractors performing work on Human First properties with the knowledge that the overpayment would be kicked back to her. The overpayments were disguised through the use of inflated invoices submitted to Human First, and the payments to Abboud were hidden by transferring the funds through a number of sham bank accounts before ultimately depositing them into accounts controlled by Abboud. Abboud used the stolen money to finance the down payment and renovation of her residence. To conceal the true source of the funds, Abboud lied to her mortgage lender, falsely claiming that the funds were a settlement payment she had received for damage caused to her previous home.
Bailey pleaded guilty to embezzlement and bank fraud in December 2017 and was sentenced by Judge Korman in August 2021 to 33 months in prison. Taha pleaded guilty in May 2019 to embezzlement. A fourth defendant, Arkadiusz Swiechowicz, pleaded guilty to obstruction of justice in September 2018. Taha and Swiechowicz are awaiting sentencing.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Robert Polemeni and Turner Buford are in charge of the prosecution. Assistant United States Attorney Tanisha Payne of the Office’s Asset Recovery Section is handling forfeiture matters in the case.
E.D.N.Y. Docket No. 16-CR-396 (ERK)