Harlem Nonprofit Head Stole $630K To Fund Tropical Vacations: DA

EAST HARLEM, NY — The longtime head of two Harlem nonprofit organizations is facing charges for diverting more than $630,000 of money that was supposed to help New Yorkers struggling with substance abuse and HIV/AIDS into personal accounts to pay for lavish tropical vacations, Manhattan District Attorney Cyrus Vance announced Wednesday.

Reginald Williams, 67, was indicted Wednesday on multiple counts of grand larceny for leading a scheme that funneled money from the Addicts Rehabilitation Center Foundation and the Addicts Rehabilitation Center Fund into accounts he controlled, prosecutors said. Two accomplices — 42-year-old Naomi Barrera and 74-year-old Bennie Hadnott — were also charged for aiding Williams in his schemes. Both the ARC Fund and Foundation were taxpayer-funded nonprofits, prosecutors said.

Williams used his position as president and CEO of the ARC Fund and the chairman of the board of the ARC Foundation to steal hundreds of thousands of dollars from the organizations through multiple different schemes since 2010.

One of the schemes involved funneling money through Hadnott's company Tondah Consulting Group, prosecutors said. Williams hired the consulting group to provide financial services to ARC for $40,000 per year. Hadnott would then kick back 25% of the fee to Williams by transferring it to a shell company in his control, prosecutors said. The scheme lasted five years and netted Williams $54,000, prosecutors said.

Williams would also steal directly from the nonprofits he was tasked with running, prosecutors said. With the aid of Barrera, who served as the president and CEO of the ARC Foundation, Williams diverted $135,000 to his personal bank account after the nonprofits received bridge loans and an influx of cash from the sale of an affordable housing property, prosecutors said. Barrera made $35,000 in the scheme.

The CEO would also filed exorbitant reimbursement requests for expenses that he claimed were business related such as personal $100,000 for vacations to the Bahamas, Jamaica, and the Dominican Republic and $170,000 to cover various bar and restaurant tabs.

"These defendants shamelessly stole from publicly funded organizations dedicated to helping vulnerable New Yorkers. Even while their organizations struggled financially – failing to meet contractual obligations and even furloughing employees without pay – these defendants continued to drain the coffers for their personal gain," Vance said in a statement.